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Deutsche Bank in spotlight over FBME transfers; UK faces '20 years of low rates'

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Deutsche Bank in spotlight over FBME transfers; UK faces '20 years of low rates'

* At least three foreign financial institutions, including Deutsche Bank AG, breached regulations requiring them to identify the people behind money transfers from a Cypriot bank notorious for catering to high-risk clients, in a practice that helped FBME Bank to launder money before authorities closed it down, documents obtained by S&P Global Market Intelligence show.

UK AND IRELAND

* Interest rates in the U.K. are likely to stay low for at least another 20 years, outgoing Bank of England policymaker Ian McCafferty told The Guardian in an interview.

* U.K.-based Nationwide Building Society reported statutory after-tax profit of £210 million for the quarter ended June 30, down from £240 million in the same period in 2017. The firm's net interest margin slipped to 1.28% from 1.35%.

* The U.K. Financial Conduct Authority informed bank executives that it is open to lenders using a "broad range of legal entity structures or booking models" as they expand their presence in the EU after Brexit, as long as the FCA oversees them.

* Standard Life Aberdeen PLC will repurchase up to a maximum of £175 million of its ordinary shares between Aug. 9 and Nov. 21.

* Irish Life Group Ltd. completed the acquisition of a strategic stake in Irish independent financial consultancy Invesco Ltd. for an undisclosed sum.

* U.S.-based CPI Card Group Inc. completed the sale of its U.K. business to London-based private equity firm SEA Equity Ltd.

GERMANY, SWITZERLAND AND AUSTRIA

* Germany's financial regulator BaFin is preparing itself for a rising number of troubled banks in the coming years, amid weakening economic growth, growing volumes of bad loans, sustained low interest rates and shrinking profitability, the body's executive director for banking supervision, Raimund Röseler, told Wirtschaftswoche. It has created a special division to support financially-stricken banks.

* Daniel Senn, formerly the lead auditor for Julius Bär Gruppe AG at KMPG Switzerland, has been convicted of insider trading by Switzerland's federal criminal court, Neue Zürcher Zeitung wrote. The conviction relates to an undisclosed takeover bid. Senn has previously been accused of insider trading in connection with Julius Bär's interest in acquiring what was then Bank Sarasin & Cie AG in 2011.

SPAIN AND PORTUGAL

* Portugal's central bank has tightened existing regulations on minimum service bank accounts, obliging the country's banks to tell customers they can switch to the lower-cost accounts, Público and Dinheiro Vivo reported. The maximum annual charge for a minimum banking services account is far less than that for normal deposit accounts. The new rules take effect immediately.

ITALY AND GREECE

* Unipol Gruppo SpA reported first-half consolidated net profit attributable to owners of the parent of €481.7 million, compared to the year-ago loss of €488.6 million. The result included a capital gain of €309 million from the sale of the group's investment in Popolare Vita SpA.

* NPLs held by Italian banks fell 26.1% in the month to June, following a 10% contraction in May, reflecting some high volume securitizations totaling €32 billion, MF reported, citing Bank of Italy data. Reuters also covered.

* An association of small investors in Banca Carige SpA filed a motion with the court to ask for clarity after a recent wave of resignations of board members, MF wrote. Il Sole 24 Ore also covered.

* A Florence court of appeal cancelled a fine that market watchdog Consob had imposed on some former managers of Nuova Banca dell’Etruria e del Lazio SpA, saying the regulator had already been aware of some of the most important documents detailing the state of the bank's financial health, La Repubblica wrote. Il Sole 24 Ore also covered.

* Credito Emiliano SpA is interested in growing through acquisitions, Il Sole 24 Ore reported, citing an executive.

NORDIC COUNTRIES

* Norway's SpareBank 1 SMN has forecast stable growth in the country's residential property market in the second half of 2018, and expects the demand for home loans to remain strong, Dagens Næringsliv reported. The past 12 months have been a nervous time for home loan lenders in Norway, with house prices declining following a long period of sustained price growth.

EASTERN EUROPE

* Russia's VTB Bank (PJSC) is involved in negotiations for the acquisition of several banks, Vedomosti reported, citing an executive who did not name any potential targets. The newspaper also said VTB's management wants to recommend earmarking 50% of 2018 IFRS net earnings for dividend payments, and that VTB raised its forecast for the 2018 consolidated net profit to 170 billion rubles.

* Russia called the latest round of U.S. sanctions illegal and said it was mulling retaliatory measures, Reuters reported. The U.S. State Department plans to impose the sanctions by the end of August after determining that Russia was responsible for the poisoning of former agent Sergei Skripal, which Moscow denies.

* OTP Bank Nyrt. reported second-quarter unaudited consolidated IFRS net comprehensive income attributable to equity holders of 115.37 billion Hungarian forints, up 91% from 60.54 billion forints in the prior-year period.

* The ECB is concerned about the exposure of Europe's biggest banks to Turkey — particularly Banco Bilbao Vizcaya Argentaria SA, BNP Paribas SA and UniCredit SpA — in light of the Turkish lira's recent fall, insiders told the Financial Times, although the regulator reportedly does not yet see the situation as critical.

* French banks are looking for opportunities in Poland after the failure of the merger between Bank Pekao SA and Alior Bank SA, with Crédit Agricole Group and BNP Paribas both looking to grow their business in the country, Les Echos reported.

* The Russian central bank said it wants to change the approach of local insurers into investment activities and proposed to remove restrictions on their investments into corporate, government and municipal bonds. The regulator also proposed to limit investments by insurance companies into securities issued by a single entity or a group of affiliated entities to 10% of insurance reserves, and wants insurers to invest less into real estate.

* Russia's Vnesheconombank launched a procedure to merge its unit Globex Bank into Sviaz Bank, also controlled by VEB, news agency Prime reported. VEB's former head Sergey Gorkov said in April that the merger could be completed in 2018, and the merged lender could be sold by 2020.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Aussie banks to fix anti-fraud controls; Vietnam to limit foreign bank licenses

Middle East & Africa: Gulf states making progress in Bahrain aid talks; United Arab Bank downgraded

Latin America: Banco do Brasil's Q2 profit rises almost 20%; Intercorp's profit falls

North America: House plans FHFA oversight hearing; LendingClub faces Massachusetts AG scrutiny

Global Insurance: AMA wants CVS/Aetna blocked; fresh Icahn salvo; UK's Prudential keeping Asia biz

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Belgium's KBC raises net interest income guidance on Czech rate hikes: Belgian firm KBC Group is raising its guidance for full-year net interest income on the back of a series of interest rate hikes in one of its key markets, the Czech Republic.

L&G CEO defends company culture following complaints about asset management arm: CEO Nigel Wilson said L&G's culture is "positive" and "supportive" after several employees complained to the U.K. Financial Conduct Authority about alleged compliance and risk failures at its asset management unit.

RBI ready for new acquisitions, may consider higher dividends, CEO says: Austrian bank RBI would be interested in new acquisitions after it completes the sale of its Polish business towards the end of the year, CEO Johann Strobl said.

Ben Meggeson, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Praxilla Trabattoni and Helen Popper contributed to this report.

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