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I-bank bonus drop; UBS targets US; Bank of Cyprus seeks London listing


Banking Essentials Newsletter: January 11th Edition


Banking Essentials Newsletter December 21st Edition


The Road to Basel IV: Navigating the challenge facing European banks


Basel Framework- Utilizing data to analyze the capital position of European banks.

I-bank bonus drop; UBS targets US; Bank of Cyprus seeks London listing

I-bankscut bonus: Credit SuisseGroup AG, UBS GroupAG, Deutsche BankAG and BarclaysPlc reduced their bonus awards to €11 billion in 2015 from €16billion in 2009, Reuters reports,citing research from Barclays. The study also found that the proportion ofdeferred bonuses at the investment banks has been declining as pushing theexpense into the future became undesirable due to accounting reasons.

* The Bank of England, the Financial Stability Board and theEuropean Systemic Risk Board are assessing the potential impact on financialinstitutions of a sharp drop in the share price of oil, gas and coal companiesthat could result from policies aimed at reducing carbon dioxide emissions, The Wall Street Journal writes.The regulators could adopt new rules designed to require firms to disclosetheir exposures to these industries or to have additional capital buffers.


BarclaysJapan CEO to leave: Eiji Nakai, Barclays Japan CEO, isdue to leave the firmJune 30, Bloomberg News reports. Nakai will also relinquish the role of co-CEOfor Asia-Pacific, leaving Andrew Jones as sole CEO.

* U.S. District Judge Lorna Schofield in Manhattan, N.Y.,yesterday dropped StandardChartered Plc from a class-action lawsuit accusing 16 banks ofdamaging investors through the manipulation of the foreign exchange market,Reuters reports.The bank was "inadvertently named" as defendant instead of unitStandard CharteredBank.

* StanChart is ending the operations of its commodity officein Geneva, Bloomberg News reports.The move is apparently part of the bank's efforts to reduce its exposure to theindustry amid the oil crisis.

* The U.K. Prudential Regulation Authority asked toresubmit prior to today's release of its 2015 annual results certain elementsof a plan to overhaul its business, Sky News reports.The bank, which nearly collapsed three years ago, reported todaythat its losses before tax widened to £610.6 million in 2015 from £264.2million in 2014.

* U.K. Chancellor George Osborne appointedOliver Holbourn CEO of UKFinancial Investments Ltd. Holbourn was head of U.K. equity capitalmarkets at Bank of America Merrill Lynch before joining UKFI in 2013. Osborneappointed James Leigh-Pemberton UKFI chairman and Peter Norton head of bankingand capital markets. Reuters covers.

* The PRA and Financial Conduct Authority confirmed the launch of Flood Re thismonth. The government-backed scheme, which is designed to help providecustomers better access to affordable flood insurance cover, will startaccepting policies on Monday. Up to 350,000 households are expected to benefitfrom the scheme.

* The FCA saidthat as of March 30, it has fully authorized eight firms to operate peer-to-peerlending platforms while a further 86 firms are still waiting for a decision.

* Regulators approved investment firm Helios InvestmentPartners' acquisition of CrownAgents Bank Ltd. and Crown Agents Investment Mgmt from , the Financial Times notes.It marks the first time that an Africa-focused fund secured regulatory approvalto acquire a U.K. financial institution.

* ArrowgrassCapital Partners LLP raised more than $600 million for a hedge fundthat launched in October 2015 and bets on M&A, insiders tellBloomberg News. The Arrowgrass Customized Solutions I Fund, which will run for18 to 24 months, is headed by Michael Edwards.

* The Central Bank of Ireland asked 55 debt managementcompanies that operate in the country to critically evaluate their compliance arrangements,The Irish Times reports.The move came after an inspection found that some firms are failing to assesscustomers' circumstances prior to giving them advice on debt. The Irish Independent also has a report.

* Data from the Central Bank of Ireland showed that Irishbanks' assets, including all loans to business and individual customers,declined by €2 billion in February, the IrishIndependent writes.The overall size of the mortgage market, in particular, fell by €327 million.

* Bank ofIreland said Sean Casey, managing director of unit , isleaving the company to pursue other opportunities, The Irish Times reports.


US'most important' market for UBS' Orcel: Andrea Orcel, head of UBSGroup's investment banking unit, said he wants to accelerate the unit'sexpansion in the U.S. to gain market share from competitors that are currentlyreducing their presence there. "The U.S. is by far the most importantmarket," WirtschaftsWoche citesOrcel as saying.

*Credit Suisse Chairman Urs Rohner rejected reports that there was a lack ofinternal risk management in the bank that enabled traders to bulk up holdingsof distressed debt and other illiquid positions, Handelsblatt writes."There were no blind spots," he said.

*Deutsche Bank will receive €3.2 million from former CEO Rolf Breuer to settle adispute over an interview he gave in 2002 which resulted in a costly legaldispute with the estate of late German media tycoon Leo Kirch, FrankfurterAllgemeine Zeitung reports.The bank will also receive €90.1 million from insurance contracts coveringBreuer, the Financial Times adds.

*Meanwhile, Breuer, his successor and current co-CEO, Jürgen Fitschen, and threeother former executives of the bank are facing another lawsuit connected to theKirch case for alleged collusion, Handelsblatt notes.

*Deutsche Bank will cap compensation for members of its management board at €9.9million this year, accordingto Bloomberg News. The maximum pay of Jeff Urwin, head of its investmentbank, using the bank's formula could have been €13.2 million, compared to Co-CEOJohn Cryan's €12.5 million.

* reduced its 2016pretax earnings forecast to €1.5 billion, compared to the €2.5 billion earnedin pretax profit in 2015, Börsen-Zeitung writes.

*Cembra Money Bank AG appointedformer CFO of Coutts & CoLtd., Rémy Schimmel, CFO.

*The Association of German Banks believes it "unlikely" that retaildepositors in Germany would be exposed to negative interests on their savingaccounts across the board. "I don't think this is going to happen," Focuscitesthe association's CEO, Michael Kemmer, as telling broadcaster ZDF.

*Separately, German savings and cooperative banks are running out of lockers asmore and more people are looking to physically deposit cash, gold and othervaluables safely, Handelsblatt reports.According to Georg Fahrenschon, president of the German Savings BanksAssociation, capacities are "booked out nation-wide."

*The Swiss Bankers Association criticized theU.S. Department of Justice for the execution of non-prosecution agreements withSwiss banks, saying that the outcome was "very high administrative andinternal costs" amid a "lack of transparency with regards to thecalculation of the fines." The association, however, conceded that theprogram provided "a foundation for legal certainty for the future."

*Austrian insurers are facing a class-action lawsuit supported by theAssociation for Consumer Protection to force retroactive cancellations of lifeinsurance policies, claiming that clients were wrongly informed about theirright of withdrawal, WirtschaftsBlatt writes.Up to 20,000 policy holders could join the class action.


Rabobanktrims mortgage portfolio: Rabobank Group reduced its mortgage portfolio by selling€1 billion of it to VIVAT Verzekeringen.

* Delta LloydNV and service provider Voogd & Voogd signeda letter of intent to boost their cooperation in the field ofintermediary-distributed personal general insurance. As part of the agreement,Voogd & Voogd will establish a new company that will take care of theunderwriting, administrative changes and claims handling of these personalgeneral insurance products for Delta Lloyd.

* Dutch insurers have still not developed a good strategyfor the long term, De Nederlandsche Bank said in a reporton the financial sector. The supervisor warned about the difficult situationfacing insurers, saying their earnings are under pressure due to lower demandfor life insurance and stiff competition.

* Sovereign investment funds are new players in the hi-techand fintech funding markets, a report from Esade Business School shows, Les Echos reports.


Bank of Cyprus seeks H2 London listing: Bank of CyprusPublic Co. Ltd. is seeking to list on the London Stock Exchange asearly as the second half and delist from the Athens Stock Exchange, saying thatsince they no longer have any operations in Greece, it makes little sense toremain listed on the ATHEX, bankingnews.grand Reutersnote. The Financial Times also has a report.

*Old Mutual Plc hasasked Rothschild to sound out potential bidders for its Milan-based wealthmanagement unit that could be valued at up to €300 million, Reuters reports.

* Ofthe 15 Banca CarigeSpA board members named at the shareholders meeting yesterday, 10are from the list presented by Vittorio Malacalza, who will be the new deputychairman. Giuseppe Tesauro will be chairman and on Monday Guido Bastianinishould be named CEO, all dailies including MFwrite,noting that the new board will examine the offer from Apollo on Monday. La Repubblica reports that the new board is looking atalternative plans that could involve reaching a strategic alliance with anotherbanking group. Reuters addsthat Carige looks set to reject the Apollo offer.

*Banca Monte dei Paschi di SienaSpA is continuing to work on improving the fundamentals of the bankon a stand-alone basis but this should increase the probability that in the futurethe lender will be part of the consolidation process, MF citesCEO Fabrizio Viola as saying.

*The board of Banco PopolareSocietà Cooperativa should approve today the launch of a €1.0billion capital increase in view of its merger with , Corriere della Sera writes.

*The risk that Banca Popolare diVicenza SpA runs in launching its capital hike by April 18 is thatup to 30% of the deal may not be subscribed, leaving , which heads theconsortium guaranteeing the transaction, exposed, La Repubblica writes. Il Sole 24 Ore adds that 's capital hike hasbeen moved to June from the previously expected April.

* BancoSantander SA U.S. unit Santander Consumer USA filed its 2015 yearlyreport with the New York Stock Exchange following amendments made as a resultof a change in the method applied to calculate provisions for nonperformingloans. The review established 2015 profit at $827 million, down 5% on the $866million announced prior to the changes in accountancy methods. NPLs increasedby $7 million, a rise of less than 1%, Expansiónwrites.


Competitionfalls in Swedish bank space: Customer mobility and price competition has diminished inthe Swedish banking sector, Realtid reports.Sweden's competition authority Konkurrensverket reviewed , ,Svenska HandelsbankenAB and SwedbankAB and found that the country's four largest banks dominate themarket to such a degree that it has become increasingly difficult forcompetitors to enter the financial sector.

* Danske BankA/S appointed Tonny Thierry Andersen headof the new wealth management unit.

*Next week, the case by Finansiel Stabilitet, the Danish government's companyfor failed banks, against Amagerbanken A/S' former management begins, Børsen reports,noting that nearly 500 former shareholders of the collapsed bank are planning aclass-action lawsuit.


AliorBank wins Bank BPH bid: General Electric Co. agreed to sellGeneral Electric CapitalCorp.'s majority stake in Bank BPH SA's core bank to . As part of the transaction,Bank BPH will be split into two separate operating units — the core bank andthe mortgage bank. The core bank will then be demerged into Alior Bank.

*Budapest Hitel- és FejlesztésiBank Zártköruen Muködo Rt., or Budapest Bank, expects to post 10 billionHungarian forints of profit this year, Reuters says.Hungary has reportedly no plans to sell the bank.

* Hungarian private equity fund Metis, Blue RobinInvestments SCA and Hungarian pension fund Pannonia will pay a total of 37billion Hungarian forints for MKBBank Zrt., with the transaction to be closed by June 30, Reuters reports.Metis and Blue Robin will each acquire a 45% stake in the bank, while Pannoniawill purchase 10%.

* Russian insurance company Ugoria is preparing a4.3 billion ruble additional share issuance to bolster its capital, asrequested by the Russian central bank, Vedomostireports.

* Jugra Bank decided not to participate in Russia's1 trillion ruble bank recapitalization program, Vedomostiand Kommersantsaid.

* Former presidential adviser Anton Ustinov was appointedchairman of the management board at Russian insurer , Vedomosti and RBK Daily report. He will replaceSergey Ivanov, who will move to PAO Sberbank of Russia to oversee the lender's insurancebusiness.

* will pay a 4.3 Polish zlotys per-share dividend on its 2015 profit, comparedwith 4.0 zlotys per share paid out for 2014, Rzeczpospolita reports. Parkiet writesthat after several years of rapid expansion, the lender will slow down lendinggrowth to a single-digit figure, but it is still expected to pay largedividends on its profits.

* The Czech central bank decided not to introducenegative interest rates for now but will prolong currency interventions untilmid-2017, Hospodarske Noviny reports.

* Hungary's constitutional court blocked recentlypassed changes to central bank laws, saying these would make the operations ofthe regulator's business units less transparent, Reuters reports.


* A number of Japanese banks will start applying charges onclient deposits to offset costs incurred from the Bank of Japan's negativeinterest rate policy, the Financial Timesreports.

* Standard & Poor's Ratings Services lowered itsoutlooks on China and Hong Kong to negative from stable.

* Saudi Arabia accounted for 33% of global Islamic bankingassets, while Malaysia is the second largest with a share of 15.5%, Utusan Malaysia reports.

* The Reserve Bank of India said it decided to increase thelimit of foreign investment in the insurance sector to 49% from 26% under theautomatic route, the Press Trust of India reports.

* Argentina's Senate approved the country's debt agreement withholdout creditors, signaling an end to a long-running legal conflict that hadisolated the country from international credit markets, Reuters reports.Argentina must pay $4.65 billion to the main creditors covered in the agreementby April 14.


Asset managersmay face stress tests, leverage scrutiny, FSB says: Asset managers'ability to survive surges in redemptions will be scrutinized by the FinancialStability Board, which said it aims to produce recommendations by the end ofthe year.

Troubled timesat Swedbank as scandal claims job of another top figure: Shareholdersand analysts are alert to heightened risks stemming from governance uncertaintyat the Swedish bank after its chairman, CEO and CFO have departed within ashort time of each other.

Russia movesto rescue VEB: The rescue of development bank VEB would have nodirect effect on the rest of the Russian banking sector, according to analysts.

Middle East& Africa Monitor: MENA news through March 30

S&PRatings and S&P Global Market Intelligence are owned by McGraw HillFinancial Inc.

Xana Kakoty, ArnoMaierbrugger, Brian McCulloch, Kees Pijnappels, Yael Schrage, PraxillaTrabattoni, Mike Hatzidakis, Esben Svendsen, Beata Fojcik and Ali Kayalarcontributed to this report.

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