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Commerzbank sees more costs; Barclays fined; EC extends Dexia guarantees

* ECB President Mario Draghi told the Financial Times that he was in favor of a fiscal union to strengthen the long-term future of the single currency and help the eurozone compete with other global powers.

* A new lobbying group called markets4Europe — made up of former central bankers, business leaders and politicians — was launched in Brussels to work for united capital markets across Europe, Les Echos reported.

* The investment divisions of several European financial institutions have adopted a tougher stance on lavish executive pay by voting against substantial S&P 500 remuneration awards in the 12 months to June 30, the Financial Times reported, citing information from data provider Proxy Insight.

* Hong Kong Exchanges & Clearing Ltd. is in discussions with several banks for a loan of between £7 billion and £8 billion for a potential acquisition of London Stock Exchange Group PLC, insiders told Bloomberg News. An agreement has not yet been finalized and details of the financing could still be changed, the sources noted.

UK AND IRELAND

* Senior British lawmaker Stewart Hosie told BBC News that a no-confidence vote against Prime Minister Boris Johnson could be held this week as such a move may be the only way to prevent a no-deal Brexit. Meanwhile, Johnson told BBC Television he has no intention to quit his post even if he fails to strike a deal with the EU, Reuters reported.

* U.K. Chancellor Sajid Javid told the Daily Mail that he will disclose a £16.6 billion "no-deal guarantee" to make up for the shortfall in EU grants to businesses, universities and charities in the next few years. The deal includes £4.3 billion for the coming year if the U.K. departs the bloc without an exit agreement.

* Michael Saunders, a member of the Bank of England's monetary policy committee, said the central bank could cut rates should Brexit uncertainty continue.

* In a letter to executives of several peer-to-peer lenders last week, the U.K. Financial Conduct Authority warned that it will "intervene strongly and rapidly" where it sees evidence of noncompliance to regulations, the FT reported. The regulator is examining a number of peer-to-peer lenders and is set to introduce tougher rules for the industry in December.

* The U.S. Securities and Exchange Commission said Barclays PLC agreed to pay a $6.3 million fine for breaching the Foreign Corrupt Practices Act by employing relatives and friends of government officials in its Asia-Pacific unit to gain an unfair advantage in its investment banking business.

* Activist investors including U.S.-based Elliot Advisors are eyeing a potential acquisition of a stake in U.K. lender Metro Bank PLC after it was forced to halt a £200 million bond sale last week due to insufficient orders, The Times reported. The activist investors are reportedly interested in purchasing an equity stake or new debt at a higher coupon in a private placement.

* Rothesay Life PLC completed a deal to insure £3.8 billion of defined benefit liabilities for the Allied Domecq Pension Fund. The British firm said its assets now exceed £50 billion, more than doubling from £24 billion at year-end 2017.

* U.K.-based Funding Circle Holdings PLC told The Times that it is reviewing a range of options to sort out a problem in its secondary market platform, which has forced investors to wait for 16 weeks to withdraw cash.

* Ulster Bank Ireland DAC is unable to charge large Irish corporate customers millions of euros in interest due to problems with its own computer systems, insiders told the FT. As a result, the Royal Bank of Scotland Group PLC unit will have to absorb the cost of negative interest rates on its reserves at the ECB.

* AIB Group PLC is assessing whether it needs a fresh round of job cuts, an insider told Bloomberg. The Irish lender is expected to make a decision on the matter by 2019-end.

GERMANY, SWITZERLAND AND AUSTRIA

* Commerzbank AG CEO Martin Zielke said the German lender has abandoned a plan to trim costs to €6.5 billion in 2020 and will spend more than expected in the next year under a new strategic plan. Commerzbank will shut down branches, cut jobs, invest €750 million and €850 million in digitization and restructuring, respectively. Zielke also said the bank will seek to be an active player in the consolidation of the European financial sector, but did not specify whether it will be a suitor or a target, according to the FT.

* Deutsche Bank AG notified the U.S. Court of Appeals for the Second Circuit that it had the tax returns of two members of the Trump family without disclosing their identities, The New York Times reported. The lender is caught in a legal battle between U.S. President Donald Trump and congressional Democrats, who have issued subpoenas for financial documents connected to the U.S. leader, his family and his businesses.

* Activist hedge fund Teleios Capital Partners, which owns about 3.4% of Aareal Bank AG, is calling on the German commercial real estate lender to sell its Aareon AG software unit, Bloomberg wrote. Teleios said Aareon is a very different business than its parent and would have better chances of achieving its full potential with separate ownership. It added that the bank's preference to hold on to Aareon and potentially partner with a strategic minority investor was not in the interest of shareholders.

* Credit Suisse Group AG's investigation into the alleged spying of former wealth management head Iqbal Khan is focusing on COO Pierre-Olivier Bouée's potential involvement in the matter, insiders told Bloomberg. Bouée is alleged to have had been involved in approving the surveillance of Khan. Meanwhile, the Swiss lender's board is in favor of retaining Tidjane Thiam, who has had an uneasy relationship with Khan, as CEO despite the publicized scandal, insiders told the FT.

* Former Austrian Chancellor Sebastian Kurz is on track to return to power after his party won the country's snap general election held over the weekend. The final result of the elections is expected Oct. 3.

FRANCE AND BENELUX

* The European Commission allowed an extension to 2032 of Belgian and French debt guarantees of as high as €40 billion for bailed-out lender Dexia SA, Het Financieele Dagblad reported. The current €85 billion debt guarantee scheme of the bank, which was rescued by the French, Luxembourg and Belgian governments in 2011, expires at the end of 2020. Luxembourg is not participating in the new scheme.

* French bank Crédit Agricole SA, present in Poland through Crédit Agricole Bank Polska, admitted that it is looking at the books of mBank SA, which is being put up for sale by Germany-based Commerzbank, Les Echos reported.

* Crédit Agricole Assurances warned holders of Euro-based assurance-vie regulated savings accounts that their yield in 2020 will be significantly reduced, Les Echos reported.

* U.S. private equity firm Hellman & Friedman LLC is considering a potential bid for a stake in Brussels-based securities settlement company Euroclear Holding SA/NV, sources told the FT. An offer could value Euroclear at roughly £5 billion.

SPAIN AND PORTUGAL

* Santander InnoVentures, the fintech-focused venture capital fund backed by Spain's Banco Santander SA, is seeking out more opportunities in Latin America following its announced investment in Klar, Reuters reported.

* The preliminary court proceedings regarding Andrea Orcel's lawsuit against Banco Santander for backtracking on its offer to appoint him as CEO of the Spanish lender is scheduled to begin April 13, 2020, Reuters reported. The former UBS investment bank head is suing Banco Santander for €100 million.

* Portugal's government has set out plans for the sale of state-run Caixa Geral de Depósitos SA's stake in Cape Verde-based Banco Comercial do Atlântico SA, Jornal de Negócios reported. The Portuguese lender holds a 59% stake in the Cape Verdean bank. Meanwhile, CGD adjusted its first-half profit to €417.5 million from €282.5 million initially reported in July, after accounting for the sale of its Spanish unit.

ITALY AND GREECE

* Italy expects to pass a €30 billion budget for next year with a deficit of about 2.2% of GDP, Il Messaggero cited Economy Minister Roberto Gualtieri as saying.

* UniCredit SpA is in advanced talks with doValue for the sale of a €5 billion nonperforming loan portfolio using the state guarantee GACS mechanism, with doValue acting as servicer of the portfolio, Il Sole 24 Ore reported.

* Banca Monte dei Paschi di Siena SpA will only look at the offers it received for an entire real estate portfolio valued at €300 million, including the historical headquarters in central Milan, after receiving 92 offers for all or bits of the portfolio, while Banca Ifis SpA is looking to sell two properties in Milan will all offers valuing the portfolio at around €80 million, Il Sole 24 Ore reported. Banca Ifis shortlisted Hines, Coima, Partners Group and Ardian.

* The major Italian banks that will own some 80% of Banca Carige SpA through the interdeposit protection fund want discontinuity in the management of the troubled lender, Il Messaggero wrote.

NORDIC COUNTRIES

* S&P Global Ratings removed Swedbank AB (publ)'s AA-/A-1+ long- and short-term issuer credit ratings from CreditWatch with negative implications, where they had been placed since April 1 due to investigations into the Swedish lender over money laundering, and assigned it a negative outlook.

* Iceland's government is hoping to start the sale process for Íslandsbanki hf. in the next few weeks, Iceland Review reported, citing public broadcaster RÚV. Finance Minister Bjarni Benediktsson said a proposal on how to proceed with the sale has been prepared by Icelandic State Financial Investments, and will be presented to parliament.

* Swedish pension fund Prometheus Pensionskassa has decided to close itself down, Realtid reported. The fund said the reason is new regulations for pension companies, with stricter requirements on reporting, which will lead to a sharp increase of costs for operations and administration. The company will be liquidated in 2020.

EASTERN EUROPE

* S&P Global Ratings upgraded Ukraine's long-term foreign and local currency sovereign ratings to B from B-, citing the country's improving economic growth and narrowing fiscal deficits.

* Fitch Ratings upgraded Serbia's long-term foreign and local currency issuer default ratings to BB+ from BB, with a stable outlook.

* Moody's changed the outlook on Slovakia to stable from positive as the country's economic strength remains behind that of its peers.

* VTB Bank PJSC transferred to PAO Promsvyazbank 32.9 billion Russian rubles worth of defense sector loans, news agency Prime reported, citing RIA Novosti.

* Freedom Holding Corp. asked Russia's Federal Antimonopoly Service for permission to acquire a 100% stake in Russian investment company Zerich Capital Management, RBC said. Freedom Holding Corp. CEO Timur Turlov told the newswire that a purchase agreement has not yet been signed, and the deal is at the stage of discussions between the companies.

* Poland-based Getin Noble Bank SA shares have been moved to Warsaw Stock Exchange's alert list and will be excluded from the stock exchange's mWIG40 index on Sept. 30, Rzeczpospolita reported. The lender's shares were included in the alert list because their average price was below 0.50 Polish zlotys apiece in the third quarter, the newspaper noted.

* The Czech Insurance Association once again criticized the plans of the Czech government to tax local insurers' technical reserves, Hospodarske Noviny reported. The new tax is expected to bring around 10 billion Czech koruny to the state budget in the next two years, equivalent to one year's profit of all local insurance companies, the association's head, Jan Matoušek, told the newspaper.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: US denies report on delisting Chinese firms; Japanese banks in Aramco IPO

Middle East & Africa: Saudi insurers Walaa, MetLife AIG ANB to merge; Kenya expects more bank M&A

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Sheryl Obejera, Ed Meza, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper 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.