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Credit Suisse to bolster Swiss unit; Allianz's Brazil deal; hiring freeze at AIB

* Michel Barnier, the EU's chief Brexit negotiator, said the bloc is ready to analyze "realistic" Brexit proposals but insisted that the pending Brexit deal struck with Theresa May, Boris Johnson's predecessor as U.K. prime minister, is the "best deal possible." Johnson, meanwhile, cautioned the public over the prospect of a swift deal with Brussels despite some progress made. Johnson also warned that the U.K. will not fully pay the £39 billion divorce bill in the event of a no-deal Brexit on Oct. 31, according to the Financial Times.

* Adam Farkas, executive director of the European Banking Authority, is in advanced talks to become head of the Association for Financial Markets in Europe, which leads the investment banking industry's lobbying effort across the bloc, Sky News wrote. Farkas' appointment could be finalized as early as this week, according to sources.

UK AND IRELAND

* Bank of England Governor Mark Carney proposed the creation of a new virtual reserve currency backed by central banks around the world to replace the dominant U.S. dollar and ease the impact of its movements on smaller economies.

* A British High Court judge ordered Lloyds Banking Group PLC to reveal details of its insolvency agreement with accountancy firm BDO, following allegations that the lender's relationship with insolvency practitioners may have damaged the position of other creditors, The Times reported.

* HSBC Holdings PLC eliminated its merger advisory teams in Japan and Australia by shedding about 10 roles, insiders told Bloomberg News.

* The staff of Schroders Personal Wealth, the joint venture between Lloyds Banking Group and Schroders PLC, have complained about the IT problems hampering the technology platform, which has opened to a limited number of customers earlier this year, according to the FT.

* Laura Mason, CEO of Legal & General Group PLC's institutional retirement business, told Reuters the British insurer is planning to launch a new product for pension schemes that are unable to afford insurance that requires to be paid in full. Mason said the company is already discussing the product with regulators and customers but did not set a time frame for its launch.

* Link Fund Solutions, the authorized administrator of Neil Woodford's suspended flagship £3.7 billion LF Woodford Equity Income Fund, said it decided to continue the suspension of the fund in the interests of all investors until early December. Separately, Link Fund Solutions said it will cut the valuation of Woodford Capital Patient Trust's stake in IH Holdings, a unit of technology firm Industrial Heat, Reuters reported.

* AIB Group PLC has temporarily suspended hiring and promotion at the Irish lender in an attempt to manage its rising costs, The Times reported. In July, the group reported a 6% increase in first half operating expenses, with personnel costs as the main driver.

* Permanent TSB Group Holdings PLC is evaluating a plan to shut down several of its 79 branches as part of its branch closure program for 2020, The Irish Independent reported. The Irish lender is understood to be in the initial planning stages of the program.

GERMANY, SWITZERLAND AND AUSTRIA

* Credit Suisse Group AG is planning to invest a sum in the high three-digit million range in its client business, especially in digitalization, by 2021-end as part of a restructuring program for its Swiss universal bank division. The lender noted that its investment banking unit will be managed as a separate business in the future and it will also launch a direct banking business that focuses exclusively on retail and commercial clients, which use core banking products.

* Germany's Deutsche Bank AG and Switzerland's UBS Group AG were involved in discussions as recently as mid-June about potential ways to combine their businesses, including a partnership of their investment banking operations, insiders told The Wall Street Journal. The deal reportedly never materialized as the two lenders failed to sort out complex issues, such as allocating finances to the joint venture.

* Deutsche Bank put on hold the planned relocation of the headquarters of its subsidiary Deutsche Postbank AG in Bonn for cost-saving reasons and owing to a further downsizing of the unit, Der Spiegel wrote. Süddeutsche Zeitung also reported that the planned move will be reconsidered.

* Some investors in UBS' investment strategy, Yield Enhancement Strategy, have filed arbitration claims after allegedly losing money in the program, according to The Wall Street Journal. The program, which was pitched as low-risk, reportedly generated at least $60 million in losses for customers, triggering more than 24 customer complaints.

* UBS appointed Huw van Steenis as chair of its sustainable finance committee and head of investor relations, effective Sept. 2. Van Steenis previously served as senior adviser to Bank of England Governor Mark Carney.

* The Federal Association of German Banks has hit back against a proposal by Markus Söder, minister-president of Bavaria, to ban passing the costs of negative interest rates to retail depositors, saying such a move could ultimately result in "dangerous instability" on financial markets, the FT wrote.

* Allianz Group's Brazilian subsidiary, Allianz Seguros SA, agreed to acquire local insurance firm Sul América SA's automobile and other property & casualty operations for 3.0 billion reais.

FRANCE AND BENELUX

* Dutch lender ING Groep NV has amassed a mortgage book worth A$50 billion in Australia since launching in the country 20 years ago, following an expansion of its digital-only model in recent years that has rolled out more products and attracted a record number of customers, the FT reported.

* ASR Nederland NV's first-half operating result grew 21% to €459 million from €380 million a year ago. The Dutch insurer's gross written premiums expanded 3.0% on a yearly basis to €2.58 billion.

* Banque Degroof Petercam SA CEO Philippe Masset has resigned, to be replaced by board member and head of macro research Bruno Colmant. Masset's resignation came after the Belgian central bank's audit found a serious breach of anti-money laundering rules at the investment bank, De Tijd noted.

SPAIN AND PORTUGAL

* Credito Fondiario SpA General Manager Iacopo De Francisco told Il Sole 24 Ore that the group aims to reach a binding agreement with Banca IFIS SpA on the creation of a bad loan investment and servicing partnership by September-end after signing a nonbinding accord earlier this month. De Francisco added that Credito Fondiario is examining the possibility of an initial public offering of its shares in 2020 and is open to deals with other players besides IFIS in the bad loan sector.

* Competition to become the bancassurance partner of Spanish bank Banco Bilbao Vizcaya Argentaria SA in a deal worth between €1.5 billion to €2.0 billion has essentially narrowed down to Italy's Generali and Germany's Allianz, Corriere della Sera wrote.

* The Portuguese government has selected investors to present binding offers for the acquisition of local lender Caixa Geral de Depósitos SA's shares in Brazilian unit Banco Caixa Geral Brasil SA. The sale process is part of Caixa Geral's state-backed recapitalization plan.

ITALY AND GREECE

* Italy’s 5-Star Movement and the center-left Democratic Party are struggling to overcome a logjam over who could lead the country's new government, according to Reuters. President Sergio Mattarella has said he wants to see signs of real progress before opening a new round of political consultations tomorrow.

NORDIC COUNTRIES

* Sweden's Financial Supervisory Authority said it aims to publish the conclusions of its money laundering probe against Swedbank AB (publ) and Skandinaviska Enskilda Banken AB in the Baltics no later than the beginning of 2020. The regulator pushed back its publication deadline due to the "considerable amount of material" it is reviewing as part of the investigations.

* Boris Fomin, former chairman of Russian lender Promsberbank, told Berlingske Business that money from criminal activities was laundered through Danske Bank A/S' Estonian branch. Fomin, who is serving a prison sentence, said the money came from illegal enrichment, fictitious activities or bribes, as well as proceeds from other forms of crime.

* The Danish Financial Supervisory Authority warned of higher money laundering and terrorist financing risks at Coop Bank and ordered the online bank to revise its risk assessments and anti-money laundering policies, Børsen reported.

* Denmark's Business Minister Simon Kollerup maintained that local banks must pay a special tax to ensure that its staff can retire in a "dignified" way, Berlingske Business wrote. The government wants the financial sector to pay 1.5 billion Danish kroner in extra taxes.

EASTERN EUROPE

* Moody's affirmed Lithuania's A3 long-term issuer and senior unsecured ratings and revised the outlook on the country to positive from stable.

* The Russian finance ministry has allowed local microfinance companies not to disclose information about their shareholders if they are subject to foreign sanctions, news agency Prime reported.

* A Slovenian appellate court upheld an earlier court ruling ordering Abanka d.d. to repay two holders of subordinated bonds scrapped during Slovenia's bank rescue in 2013 and 2014, with the decision raising prospects for more bondholders to be compensated for their investments lost in the overhaul, Reuters reported.

* Polish financially troubled lender Idea Bank SA wants to adjust its sales network to its new business model, with plans to close and reduce the size of some of its branches, Parkiet reported. The lender hopes the changes will significantly reduce monthly expenditure on its branch network and intends to complete the restructuring process at the beginning of 2020.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: RBA chief warns of global political shock; India to inject cash into banks again

Middle East & Africa: FAB denies Qatari regulator's allegations; Fitch, S&P act on Lebanon

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Challenger banks face onslaught from bigger rivals as Brexit sours prospects: New banks that sprang up in the wake of the financial crisis have won millions of customers, but long-established rivals have maintained an iron grip on the fundamentals of the banking sector.

Deza Mones, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.