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ECB to halt QE; breach found at Swiss Raiffeisen; HSBC maps out new strategy

Banking Essentials Newsletter December Edition Part 2

Banking Essentials Newsletter - November Edition

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


ECB to halt QE; breach found at Swiss Raiffeisen; HSBC maps out new strategy

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.

Macro news

* The European Central Bank will scale back its quantitative easing program before ending it in December in a move widely anticipated by markets. The dovishness of the ECB even as it called an imminent end to its quantitative easing program contrasted with the U.S. Federal Reserve's hawkishness of a day earlier. The Fed raised interest rates.

* Swiss voters rejected a sweeping overhaul of its banking system in a national referendum, with less than 25% in favor of the proposal. Under the plan, only Switzerland's central bank could increase the nation's money supply.

Regulatory activity

* The Czech central bank has introduced new rules for mortgage lending and increased countercyclical buffer requirements for banks as it looks to mitigate risks in the country's property market.

* France's High Council for Financial Stability will impose a countercyclical buffer of 0.25% on banks to rein in the country's fast pace of lending.

* Swiss financial market supervisory authority Finma found major corporate governance failings and a "serious breach of supervisory law" at Raiffeisen Gruppe Switzerland. The regulator found Raiffeisen's handling of conflicts of interest and its board's supervision of former CEO Pierin Vincenz to be inadequate. Vincenz was released from custody by Zurich's public prosecutor's office June 12 after 106 days in pretrial detention.

* The U.K. Financial Conduct Authority is pressing ahead with plans to create a new category within its premium listing regime that exempts state-controlled companies from certain requirements, seen as a controversial move to help attract the IPO of Saudi Arabian Oil Co., or Saudi Aramco, to London.

* The U.K.'s central bank will likely require big banks to meet certain levels of service provision when facing cyberattacks and other business disruption.

* The ECB is looking at the trading books of Deutsche Bank AG, BNP Paribas SA and Société Générale SA as it inspects how the three groups use the leeway they have to price so-called Level 3 instruments.

Strategies and targets

* HSBC Holdings PLC plans to invest between $15 billion and $17 billion by 2020, primarily in growth and technology and its core Asian markets. But the biggest bank by assets in Europe and one of the most successful Western players in the Asian market will not find it easy to achieve all the goals of the ambitious new strategy, analysts said.

* Bank of Ireland Group PLC expects to increase its loan book by roughly 20% by 2021 and aims to invest an additional €500 million in its restructuring program as it unveiled new financial targets.

Earnings

* HSH Nordbank AG reported losses of more than €100 million for the first quarter, mainly due to expenses related to its privatization.

* Novo Banco SA reported first-quarter consolidated net income attributable to shareholders of €60.9 million, compared with a loss of €130.9 million in the first three months of 2017.

Deal table

* Deutsche Bank has agreed to sell a portfolio of nonperforming shipping loans with a notional value of $1 billion to investors Oak Hill Advisors and Varde.

* SocGen is said to be considering selling its private banking unit in Belgium and Polish unit Euro Bank SA.

IPO talk

* Dutch payment solutions provider Adyen N.V. raised €947 million in its IPO, which was multiple times oversubscribed.

* Germany's solarisBank AG aims to break even by the end of 2019 and will look at an IPO as a possible financing option.

* Arion banki hf. set the final price for its IPO at 75 Icelandic kronur per ordinary share on Nasdaq Iceland and 6.11 Swedish kronor per depository receipt on Nasdaq Stockholm.

In other news

* Park Group PLC's board recommended a final dividend of 2.05 pence per share for the year ended March 31, up from the year-ago 1.95 pence per share.

* A group of 37 European banks, including Groupe BPCE, ABN AMRO Group NV and Société Générale, are launching a pilot scheme to look at ways of making mortgages more energy-efficient.

* Standard Chartered PLC will set up an office in Warsaw, dubbed Standard Chartered Global Business Services Sp z o.o., as part of efforts to attract more clients in Europe and the Americas.

Featured during the week on S&P Global Market Intelligence

European banks' capital survives new accounting impact, but concerns remain: Most big European banks have seen a fairly small impact on their capital levels from the first-time implementation of the new IFRS 9 accounting rules, but the early disclosures are patchy and concerns over future provisioning remain.

Europe's private banks face tougher operating challenges but outlook is positive: The end of the secrecy associated with private banking and technological disruption in the wealth management market have forced European lenders to differentiate, but many are well-positioned to benefit from the continuing growth in global assets.

Big Western European banks to race for top market spots in CEE: After laying groundwork in central and eastern Europe, big Western European banks will seek to take leadership of those markets in 2018 and boost retail lending in their race to the top, Austria's RBI said.

Europe's bank failure rules on trial amid Banco Popular legal fallout: The resolution of Spain's Banco Popular was hailed as a success by regulators, but out-of-pocket investors beg to differ, setting the stage for legal battles and posing questions about the future of Europe's bank failure rules.

CEO: Morgan Stanley relocating up to 10% of UK workforce: Morgan Stanley CEO James Gorman said Brexit will lead to the relocation of about 400 to 500 of the company's 5,000 positions in the United Kingdom.

CYBG eyes Virgin brand name for its digital arm after proposed takeover: The Clydesdale and Yorkshire bank intends to scrap its own digital brand "B" and look to offer online current accounts under the brand created by Richard Branson, a source close to CYBG said.