* As expected, U.K. lawmakers rejected Prime Minister Theresa May's proposed Brexit deal in a 432-202 vote, giving May until early next week to come up with another plan. May faces another confidence vote today as Labour Party leader Jeremy Corbyn, who wants to force early elections, proposed a no-confidence motion against the government.
* Meanwhile, a number of EU leaders, including European Commission President Jean-Claude Juncker and European Council President Donald Tusk, expressed disappointment over the U.K. lawmakers' decision, Reuters reported. Juncker warned that the U.K. was running out of time to secure an exit agreement and that the commission will step up its preparations for a no-deal Brexit.
* Most banks operating in the U.K. identified macroeconomic uncertainty as their biggest concern rather than Brexit, according to a survey by the Confederation of British Industry and PricewaterhouseCoopers.
UK AND IRELAND
* U.K. Financial Conduct Authority Chair Charles Randell said the regulator does not have any plans for further retail bank reforms and is looking to focus on the roll out of existing open banking regulations to strengthen competition before launching new ones, Reuters reported.
* U.K. FCA CEO Andrew Bailey confirmed that the regulator has dropped a criminal investigation into Credit Suisse Group AG over the Swiss lender's alleged involvement in a scandal in Mozambique, Reuters reported. Bailey noted the FCA is still probing the bank and individuals for any breach of conduct rules.
* London-based State Street Global Advisors Ltd. CEO Cyrus Taraporevala urged boards to examine their companies' corporate cultures, the latest signal that governance issues remain top of mind for the world's largest asset managers.
* A London court trial against three former Barclays PLC traders began yesterday, with the prosecution alleging the bankers of conspiring to rig the euro interbank offered rate to gain unfair advantage in large financial trades, the Financial Times reported. Carlo Palombo, Sisse Bohart and Colin Bermingham have all pleaded not guilty to charges against them.
GERMANY, SWITZERLAND AND AUSTRIA
* Deutsche Bank AG CEO Christian Sewing said the German lender has started another internal probe into its role in the money laundering scandal surrounding Danske Bank A/S' Estonian branch, the FT wrote. Deutsche served as a correspondent bank for the branch between 2007 and 2015.
* Germany plans to extend the contract of central bank chief Jens Weidmann by an additional eight years when it expires at April-end, insiders told Bloomberg News.
* Felix Hufeld, president of German financial watchdog Bafin, said more than 45 financial institutions were re-establishing or significantly strengthening their presence in Germany as a result of the U.K.'s planned exit from the EU, Handelsblatt reported.
* Smaller German banks are looking to sell their shares in struggling online payment service Paydirekt GmbH, whose shareholders include Deutsche Bank AG, Commerzbank AG, German Savings Banks and smaller "pool banks," Handelsblatt reported. ING-DiBa AG and other pool banks, including BNP Paribas SA's Consorsbank and UniCredit Bank AG, cancelled their shares effective December 2019 and are in discussion with Deutsche Bank and Commerzbank to buy them.
* Banque Cramer & Cie SA acquired Lugano-based external asset manager A.M.&C. Finance SA for an undisclosed sum.
FRANCE AND BENELUX
* BNP Paribas SA is shutting down its U.S. commodities derivatives trading unit, insiders told Bloomberg. The move follows an earlier decision by the French lender to stop financing shale and oil sands projects. Meanwhile, sources told Bloomberg that the bank lost $80 million in derivative trades linked to the U.S. stock benchmark in late 2018.
* Dutch banks and insurers have all appointed privacy officers in accordance with the EU's new privacy law, Het Financieele Dagblad reported, citing the Dutch data protection authority. The new legislation has been in place since May 2018.
* The number of employees that have left Banque Neuflize OBC SA since it announced its restructuring plan in 2017 is higher than expected, L'Agefi reported. The bank had planned to lay off 25% of its roughly 1,000 workforce in France.
SPAIN AND PORTUGAL
* Banco Santander SA ditched a plan to appoint former UBS Group AG investment banking chief Andrea Orcel as its new CEO, saying the cost of compensating him for his time at the Swiss lender would exceed its original expectations. Insiders told the FT that the Spanish lender would have to pay Orcel as high as €50 million to compensate him for deferred stock awards that he earned during his seven-year stint at UBS.
* Market analysts from Hayes Portugal expect the traditional banking and insurance companies to start hiring again in 2019, although at a slower pace in comparison to other credit institutions and investment funds, Jornal de Negócios wrote. The insurance sector can have the best hiring season since 2011.
ITALY AND GREECE
* Shares in Italian banks fell yesterday after Il Sole 24 Ore reported that the ECB had asked all lenders it oversees to cover 100% of their existing nonperforming loans, not just newly soured debt, within seven years, Bloomberg News wrote. BPER Banca SpA, Banco BPM SpA, Unione di Banche Italiane SpA and Intesa Sanpaolo SpA released statements clarifying that the NPL coverage demands would not have a significant impact on their income and balance sheets for 2018. UniCredit SpA also said that its nonperforming exposure coverage is fully adequate.
* Many Italian banks are struggling to borrow on private markets and are seeking help from the ECB as they aim to raise funding of over €55 billion this year, Reuters reported.
* Banca Monte dei Paschi di Siena SpA sold a portfolio of €420 million in unlikely-to-pay loans to two consortia, Il Sole 24 Ore said, adding that the first consortium is made up of GWM, Farallon and Aurora Recovery Capital and the second of Algebris and Frontis.
* Nordea Bank Abp said it has reduced its Russian loan book by more than 60% since 2014, including a divestment of the household loan book. The Nordic lender added that it will write off goodwill related to Russia of €141 million, which will be reported as a depreciation in its the fourth-quarter 2018 results.
* Swedish private equity firm EQT Partners AB is looking to sell visa application processing firm VFS in a potential deal worth CHF2 billion to CHF2.5 billion, insiders told Reuters.
* The Danish Supreme Court has ruled that three former managers in Capinordic Bank, which went bankrupt in 2010, must pay almost 90 million Danish kroner in compensation to the Danish government's company for failed banks, Finansiel Stabilitet, Berlingske Business reported.
* Following a recent inspection at Public Stock Co. Orient Express Bank, the Russian central bank requested the lender to set aside additional provisions in the amount of 20 billion Russian rubles, Kommersant reported.
* The Russian central bank urged local lenders to strengthen control over cash transfers abroad, warning that some of the transactions could be part of a scheme aimed at financing illegal import activities, Kommersant and news agency RBC said.
* PAO Promsvyazbank, which was bailed out by the Russian central bank in 2017, will receive additional capital in 2019, but the form and the actual size of the capital boost are still under discussions, Reuters reported.
* Austria's Vienna Insurance Group AG completed the merger of its Czech bancassurance business Pojišťovna České spořitelny a.s. with local company Kooperativa Pojistovna a.s.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: China denies delaying Mastercard, Visa entry; fund manager sells IOOF stake
Middle East & Africa: QNB FY'18 profit up YOY; Absa targets mortgage market; KFH mulls Malaysian exit
Latin America: BNDES freezes advertising spending; Bradesco reshuffles management
North America: JPMorgan's Q4'18 EPS below consensus; PNC Bank buying Ambassador Financial
Global Insurance: UnitedHealth revenues up; Swiss Re sees $1B cat burden; new Lexington structure
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Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Sophie Davies and Helen Popper contributed to this report.
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