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Standard Life to take Elevate; retail banking buoys SocGen in Q1; capital concerns at 5 Danish banks

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


Standard Life to take Elevate; retail banking buoys SocGen in Q1; capital concerns at 5 Danish banks

Bankssettle ISDAfix lawsuit: Barclays Plc, Credit Suisse Group AG, and wereamong seven global banks that agreed to pay a combined $324 million to settle aprivate U.S. lawsuit alleging that they conspired to manipulate interest ratebenchmark ISDAfix from 2009 to 2012, Reuters reports.Under the settlement, Credit Suisse, Deutsche Bank and RBS will pay $50 millioneach, while Barclays will pay $30 million. Bloomberg News also reports.

UKAND IRELAND

Standard Life to take AXA's Elevate: Standard Life Plc unit agreed to acquire all of the issued share capital of AXAPortfolio Services Ltd., which trades as Elevate, from unit . The acquisition isexpected to boost Standard Life's assets under administration to £36.4 billionat March-end.

* Direct LineInsurance Group Plc this morning reported first-quarter grosswritten premiums from ongoing operations of £777.8 million, up from £746.5million in the year-ago quarter. Gross written premiumsin its motor insurance business increased to £360.7 million from £326.4 millionin the first quarter of 2015.

* Barclays is now allowing certain customers to take up mortgageloans without any deposit, The Guardianreports.The move, considered the latest sign of a return to riskier lending, makes Barclaysthe first bank in the U.K. since the financial crisis to offer a mortgageequivalent to 100% of a property's value without a deposit, accordingto the Financial Times.

* Harry Harrison, former head of U.S. dollar rates trading atBarclays, told a London court yesterday that he had no knowledge of anyattempts to rig LIBOR at the bank or any other firms, accordingto Bloomberg News. Harrison, who now oversees the bank's noncore assets,said any requests to revise the benchmark rate would have been "veryinappropriate."

* To meet new global total loss-absorbing capacity rules needs to issueup to $30 billion of new debt and replace $51 billion of debt that is due to matureby 2018-end, IFR reports.Group Finance Director Iain Mackay said the bank will be "prettybusy" over the next three years ensuring that it meets the TLACrequirement.

* Challenger banks outperformed the big five banks in the U.K. lastyear, the Financial Times writes,citing an analysis by advisory firm KPMG. Aldermore Group Plc, Metro Bank Plc, Shawbrook Group Plc and other smaller banks saw theirROE increase to 17% last year from 15.8% in 2014, while the largest challengerbanks delivered a 9.5% ROE in 2015, up from 8.8% in 2014. The five big highstreet banks posted a 4.6% ROE in 2015, compared to 2.8% a year ago. City A.M. also reports.

GERMANY,SWITZERLAND AND AUSTRIA

ErsteQ1 profit rises YOY: Erste Group Bank AG today reported a year-over-year increasein first-quarter net profit attributable to owners of the parent to €274.7million from €225.8 million. Net interest income was €1.09 billion, compared tothe year-ago €1.10 billion.

* Credit Suisse sold for approximately $1.27 billion part of itsdistressed credit portfolio to TSSP, the global credit and special situationsplatform of TPG. The deal will reduce the lender's overall distressed creditexposure by $1.24 billion. As part of the transaction, the bank will take acharge of about $100 million, most of which will be reflected in itsfirst-quarter results, in addition to the previously announced $99 million ofwrite-downs related to the overall distressed portfolio.

* Shareholderadvisory group ISS recommended that Deutsche Bank shareholders vote for a special audit to find out whether management breachedits duties in dealing withthe bank's legal and regulatory entanglements, Reuters reports. ISSsaid the sudden resignationof Georg Thoma, the supervisoryboard member in charge of internalinvestigations, "raise[d]significant doubts about the supervisory board's ability to investigate potentialwrongdoing by its own members, which highlights a conflict of interest."

* Austria's Financial Market Authority instructedMeinl Bank AG todismiss former CEO Peter Weinzierl from his post on the supervisory boardwithin eight weeks due to his "personal unreliability," Der Standard reports. Meinl Bank has four weeks to appeal the request. Weinzierl stepped downas CEO in December after being accused by the FMA of violating regulations,including not doing enough to prevent money laundering.

* DZ BankAG acquired a 25% stake inreceivables auction platform TrustBills GmbH. The stake in the Hamburg startupmarks the cooperative bank's first strategic investment in a fintech company inthe corporate customer business. TrustBills is an electronic marketplace for sellinginternational receivables of companies to institutional investors.

* MunichRe will issue a $100 million catastrophe bond through newlyregistered Irish special purpose vehicle Queen Street XII Re dac, Artemis reports.The bond carries an attachment probability of 3.53% and an expected loss of2.71%.

*UBS Group AG is set torevamp its wealthmanagement business in an effort to cut costs, Reuters reports. Wealthmanagement head Jürg Zeltner said in a memo to staff that the new structure, which isscheduled to gointo effect July 1, willprovide the bank greater consistency and standardization.

* Deutsche Börse AG intends to keep its derivativestrading and settlement operations in Frankfurt even after a planned merger withLondon Stock Exchange GroupPlc is completed, Reuters reports.Deutsche Börse CEO Carsten Kengeter said the combined entity will need amainstay in the euro area.

*Julius Bär Gruppe AG appointed Angela Bow head of emergingAsia. Basedin Hong Kong, shewill lead efforts to strengthen the bank's wealth management franchisein the Philippine and Thai markets. Bow joins Julius Bär from Credit Suisse.

* Zurich Switzerland appointed René Harlacher chief underwriting officer, effective Aug. 1. Harlacherjoins the division from AXA-Winterthur.

FRANCEAND BENELUX

Retailbanking buoys SocGen Q1 result: Société Générale SA today reported group net incomeof €924 million for the first quarter, up from €868 million a year ago.Adjusted for noneconomic items, namely the revaluation of own financialliabilities and debt value adjustments, group net income amounted to €829million, compared to €833 million a year ago. SocGen attributed the performanceto the "substantial growth" in its retail banking operations.

* AXA yesterday reported a 1% year-over-year increasein first-quarter total revenues to €31.8 billion. Net inflows at the life andsavings business amounted to €3.0 billion, compared to €3.9 billion in theyear-ago period.

* AEGONNV agreed to acquire BlackRock Inc.'s U.K. defined contribution platformand administration business to strengthen its position in the British workplace savingsmarket. The Dutch insurer will acquire approximately £12 billion of assets andsome 350,000 customers, creating a £30 billion platform-based workplace savingsbusiness.

* Beginning June, French regulator AMF and prudentialsupervisor ACPR will create a common unit dedicated to fintech startups, Les Echos writes.At the same time, an advisory forum will be set up to facilitate the dialoguebetween regulators and fintech firms.

* BNP ParibasFortis SA plans to move the international payments department fromBrussels to Lisbon, De Tijd writes.Approximately 55 jobs will be lost in Brussels.

SPAINAND PORTUGAL

Bancopopular-e tocease banking services: Bancopopular-eSAU — a venture between Banco Popular Español SA and U.S. private equity fundVärde Partners — will stop providing banking services from May 23. Bancopopular-ewill continue to run its credit card and traditional deposit accountsbusinesses, while the current accounts of its 2.5 million clients will pass onto Banco Popular Español, Cinco Días writes.

* The PortugueseAuthority for Working Conditions is following closely the situation of some 100Novo Banco SAemployees who have lost access to internal systems after receiving a letterexempting them from coming to work, Públicoreports. Jornal de Negócios adds that the bank plans to dismiss them by the end ofMay.

* During theParliamentary Inquiry Commission into the resolution of , Miguel Barbosa, CEO of Oitante — the asset management vehicleset up by Banco de Portugal to absorb Banif's toxic assets — said he isnegotiating the sale of €426 million of assets forno more than 5% of their original price, at €24million, Económico says, adding that Oitante's Workers' Committee hasrequested formal explanations at a May 6 meeting. Barbosa added that once themerger between Banif and BancoSantander Totta SA is completed, 400 employees might be dismissed.

ITALYAND GREECE

VenetoBanca sees no need of Atlante help: Chairman PierluigiBolla said he does not expect that Italian bank bailout fund Atlante will beneeded to back Veneto Banca's imminent €1 billion capital increase, Reuters writes.Bolla also said the ECB has informed Veneto Banca that it will evaluate theindependence of members of the bank's next board and ensure they were notassociated with past management shortfalls, MFreports.

* Banca IFISSpA purchased a portfolio of more than €1 billion in nonperformingloans from a company involved in factoring and NPL management, MF says.The portfolio is 64% composed of consumer credit loans and 36% of credit cardloans.

* UniCreditSpA said 78% of shareholders opted for a scrip dividend payment on2015 earnings, with the issuance of new shares for the same to boost its commonequity Tier 1 ratio by 14 basis points, Reuters writes.

NORDICCOUNTRIES

Capitalconcerns at 5 Danish banks: Five Danish banks — ,Den Jyske Sparekasse,Suduroyar Sparikassi, Alm. BrandBank A/S and ØstjydskBank A/S — areat risk of needing to raise fresh capital, Børsenreports,citing an analysis by research firm BankResearch.

*The Norwegian Consumer Council might expand its planned lawsuit against DNB NORNorge to include DNBASA funds Avanse Norge (I) and DNB Norge (I). The suit seeks todetermine if customers of the funds are entitled to compensation for the feesthey have paid over the years, E24 writes.

* SvenskaHandelsbanken AB (publ) is considering closing its Copenhagen equity tradingoperations, FinansWatch reports.Handelsbanken plans to move the Copenhagen sales team to London, but will keepthe analysts in Copenhagen.

* Danske BankA/S enteredinto a 10-year agreement with IT company NNIT to build a new data center, Berlingske Business reports.The size of the deal has not been disclosed, other than that it will run to the"hundreds of millions of Danish kroner."

* Some of Sweden's mortgage banksare rejecting up to 25% of loan applications amid concerns about the growingprivate debt in the country, Bloomberg News reports. SBAB Bank AB (publ) expects new lending growth to slowdown in the coming years because of stricter lending criteria and tougherregulatory requirements.

EASTERNEUROPE

Polishmobile company plans insurance sales: Polish mobile network Plus plans to developthe sale of insurance products via mobile phones, Puls Biznesu reports. The mobileoperator will cooperate on the project with Benefia, a company controlled byVIG Poland, which will provide it with insurance products and requiredtechnologies.

* Heta AssetResolution AG's Bulgarian arm is offloading a nonperforming loanportfolio with total exposure of up to €130 million and accrued interest of upto €37 million, SEENews reports.The portfolio will be sold in tranches, with bidders getting the chance totender for part or all of the assets.

* Ownersof Russia's National Real Estate Development Company acquired a 55.5% stake inRuskobank, Vedomosti reports, estimating the value of the holding at about400 million Russian rubles.

* Russia'sDeposit Insurance Agency announced another tender to select an investor toparticipate in a financial recovery plan for National Bank TRUST PJSC, Kommersant reports, citing the bank's financial report for 2015.

* TheRussian central bank plans to simplify the procedure for disclosure ofinformation on holders of depositary receipts, which is expected to facilitatethe voting process for foreign investors and help with the formation of aquorum at shareholder meetings, Vedomostireports.

*Russian auditors made a number of comments on annual reports published recentlyby Russia's six major banks, pointing to issues with the quality of informationdisclosed to them by the lenders and noncompliance with the requirements of theRussian central bank, Kommersant writes.

INOTHER PARTS OF THE WORLD

* Changyong Rhee, director of the IMF's Asia-Pacificdepartment, estimates that China's capital outflow would keep increasing in2016, with the majority from Chinese enterprises repaying overseas corporatedebts, Caixin reports. The IMFalso estimates that the country's economic growth will be 6.5% in 2016 and 6.2%in 2017, thanks to strong stimulus measures and credit policies applied in 2016.

* Brazil's Finance Ministry said it will increase the IOFfinancial tax, a levy on the purchase of foreign currencies in cash, to 1.1%from 0.38%, Reuters reports.The ministry also raised the IOF tax on buyback operations made among financialinstitutions and their units to 1% per day from zero previously.

* Argentine casino magnate Cristóbal López's businessconglomerate, GrupoIndalo, is selling Providencia Compañía Argentina de Seguros SA, formerlyknown as Generali Argentina, just six months after agreeing to it from Italian insurerGenerali, La Nación reports.

* Millennium Atlântico,the new bank that resulted from the merger of andBanco Millennium AngolaSA, launched in Luanda, Angola. Dinheiro Vivo writes thatMillennium BCP CEO NunoManuel da Silva Amado said shareholders expect the bank to be listed on thestock markets in Angola and Europe by 2019.

NOWFEATURED ON S&P GLOBAL MARKET INTELLIGENCE

TLAC costs toweigh on HSBC's NIM as issuance of compliant debt grows: HSBC maytake a hit to net interest income of as much as $800 million from expensive newTLAC-eligible debt it is issuing.

Weak marketsnot 'new normal,' says UBS CEO: Extremely weak markets hit UBSduring the first quarter, but CEO Sergio Ermotti denied that this is "thenew normal."

Commerzbankrebuts dividend-stripping allegations: Having failed to meetanalysts' expectations for its first-quarter earnings, the CFO of the Germanlender said it will be challenging to achieve the full-year net profit postedin 2015.

Falling costof risk helps BNP Paribas Q1 net profit beat expectations: A steepfall in BNP Paribas' provisions helped its first-quarter profit beat analysts'expectations despite soft revenues. But the outlook for its investment bankingbusiness in 2016 remains uncertain.

Xana Kakoty, Ed Meza,Stephanie Salti, Praxilla Trabattoni, Heather O'Brian, Beata Fojcik, KeesPijnappels, Esben Svendsen, Mariana Aldano, Thanasis Kakalis and Ali Kayalarcontributed to this report.

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