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European banks' China threat; Barclays folding in Italy; BBVA banks on Turkey


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.

European banks' China threat; Barclays folding in Italy; BBVA banks on Turkey

DeutscheBank chief warns of China advent: Deutsche Bank AG Co-CEO Jürgen Fitschen expressedconcerns about the threat posed by Chinese banks to their Europeancounterparts, which he said are already lagging behind U.S. rivals, according toReuters.

* Banks and asset managers are setto secure an exemption in EU plans to delay the implementation of the revised Markets in Financial InstrumentsDirective, or MiFID II, until January 2018, Bloomberg News reports. Apotentially sizeable portion of the derivatives markets could be exempted fromrules aiming to increase transparency and competition on trading platformsbefore trades are completed.

* IMF Managing Director ChristineLagarde said unconventional solutions "might be of great interest" tosolve global tax evasion issues, but warned that a proposal to create anintergovernmental tax body under the United Nations would face obstacles, The Guardian reports.Separately, the French government will push for a G-20 blacklist of tax havensand tougher EU penalties on individuals who encourage tax evasion, Reuters writes.


Barclays to offload €13B Italian loans: intends to sellapproximately €13 billion of performing and nonperforming loans at its Italianunit, marking the last step of its planned exit from the Italian retailbusiness, Bloomberg News reports.Barclays Italy chief Alessandra Perrazzelli said the bank aims to close thedisposal of the whole loan portfolio in one to two years.

* British digital mortgage brokerHabito launched yesterday after securing £1.6 million in seed funding, City A.M. reports.

* London-based cyber specialistEmergIn Risk launched yesterday with £20 million initial facility, Intelligent Insurer reports.EmergIn Risk, which is part of RSG Underwriting Managers, will use the facilityto provide products to offset the financial implications of cyberattacks.

* A report by consultancy firmAccenture found that technology firms raised nearly $1 billion last year tochallenge British banks, the FinancialTimes writes.Richard Lumb, head of financial services at the consultancy firm, said thatwhile U.S. markets have shifted to collaborative ventures in recent years,European markets are in the early stages of the fintech development cycle andare likely to become more collaborative over time.

* Meanwhile, financial industryobservers say fintech firms in the U.K. could receive a short-term boost from aBritish departure from the EU, but a Brexit would deprive them of thepossibility of expansion in the longer term, Reuters reports.    

* Former U.K. Chancellor NormanLamont said yesterday that British banks will take a bit more time beforefinancing trade with Iran due to lingering fears that they could still be hitby remaining sanctions imposed by the U.S., Reuters reports.U.K. Trade and Investment Minister Mark Price said the British government wasworking with the U.S. to resolve the issue.

* U.K. Chancellor George Osborneyesterday released details of his 2014/2015 tax records, a day after a similarmove by Prime Minister David Cameron amid criticism in the wake of the PanamaPapers scandal, Reuters writes.Cameron, meanwhile, defended his family's tax affairs, saying his late father'soffshore investment fund, which was named in the Panama Papers, was not createdto dodge taxes, Sky News reports.

* Co-operative Group Ltd. wrote downthe value of its 20% stake in Co-operative Bank Plc to £185 million as of 2015-end, ayear-over-year reduction of 17%, TheGuardian reports. Thedrop in the stake's value suggests that Co-op Bank may now be worth less than£1 billion.


Allianzto up infrastructure investment 2x: Allianz Group is looking todouble its investments in infrastructure and renewable energy projects in thenext two to three years, Reuters reports.

* Analysts at JPMorgan Chase &Co. say a hiring freeze at Deutsche Bank could save the German lender up to€1.9 billion in costs this year, Bloomberg News reports.Deutsche Bank could also slash costs further by paying a larger share of staffbonuses in stock and hiring more junior employees, according to the analysts.

* James Amine, CEO of Credit Suisse GroupAG's investmentbanking and capital markets unit, is bucking the trend as he setsout to increase headcount, Finews reports. In an interview with The Australian, Amine saidthat despite difficult times, he is keen to increase the number of employeeswhile reducing costs through the use of new technologies.

* Inthe ongoing Heta Asset Resolution AG case, creditors are eager toreach an amicable solution with the state, Handelsblattreports. The Austrian state of Carinthia is also eager "for an out-of-courtsettlement, but not at any price," said Carinthian Governor Peter Kaiser. Reuters also covers.Accordingto L'Echo, , which has an exposure of€395 million, CommerzbankAG and Deutsche Bank are among creditors that have decided to movethe courts.


Oudéa set to face senate fire on Panama Papers: Société GénéraleSA CEO Frédéric Oudéa has been ordered to appear before the Frenchsenate today to answer queries regarding SocGen's involvement in the PanamaPapers scandal after the bank was named in the leak to have commissioned thecreation of 979 offshore companies for customers, the Financial Times reports.

* BNP ParibasSA has been fined €187,500 for unfair commercial practice inrelation to Jet 3, a savings product the bank started selling 15 years ago,according to LesEchos and L'Echoreport. L'Agefi and LeMonde also cover.


Italian fund formed to clean up banks' balance sheets: Asset manager Quaestio Sgr, headed by economistAlessandro Penati, will manage the €5 billion Atlante fund created to buynonperforming loans and guarantee banks' capital hikes, beginning with those ofVeneto Banca SCpA andBanca Popolare di VicenzaSpA, all dailies including MFwrite. Foundations will contribute €500million; banks, headed by IntesaSanpaolo SpA, UniCredit SpA and Unione di Banche Italiane SpA,another €2 billion to €3 billion; Cassa depositi e prestiti SpA some €300 million to €400million; and the rest by insurers. IlSole 24 Ore adds thatthe contribution from insurers could reach €1 billion. Bloomberg News and Reuters alsocover.

* Posta Vita, the insurance unit ofItalian mail service Poste Italiane, is eyeing the €4.5 billion portfolio puton sale by Allianz Vita, MF reports.

* Phil Willcock was named head ofAviva Plc in Italy, MF writes.

* The head of Banca Popolare dell'Emilia Romagna SC aims to grouptogether existing shareholders in a bid to lock down up to 25% to 30% of sharecapital, MF writes.

* Generali is planning a euro medium-term note program for a totalof €15 billion, MF writes. Separately, businessman FrancescoGaetano Caltagirone, through Fincal, has about a 3% stake in Generali, makinghim the third-largest shareholder, Corrieredella Sera writes.

* Carlo Cimbri is set to be just the chairman ofUnipolSai AssicurazioniSpA,with operations managed by Matteo Laterza, Il Sole 24 Ore writes.

* CaixaBankSA and Angolan investor Isabel dos Santos are still ironing outminor details of the Banco BPISA deal, with a final announcement expected today or tomorrow, Jornal de Negócios writes. One possibility being discussed could see BPI's Angolanunit, Banco de Fomento AngolaSA, listed in Lisbon. Banco BPI's shares weresuspended from trading on the Lisbon stock exchange yesterday further to thereaching of the agreement, Europa Press adds.

* First-quarter data published by Dealogic placed , with €29 million,  at the top of the list of investment banksarranged according to commissions earned, followed by JPMorgan Chase and Citiwith €12 million and €11 million, respectively, Cinco Días reports.

* Banco deSabadell SA is preparing a corporate restructuring which should seethe reorganization of its insurance business. The banking group is innegotiations for the sale of Mediterráneo Vida, the insurance unit inheritedfollowing the merger of Caja de Ahorros del Mediterráneo into the group, Spain's ABC writes.

* Banco Popular Español SA said yesterday that so-calledfloor clauses on a number of mortgage contracts granted to customers werelegal, days after a Madrid court ordered the bank and 40 others to compensateclients for losses incurred due to the mortgages, Reuters reports. Areport from consultancy firm AFI suggests that Spanish banks' compensationcosts could reach €5.3 billion.


Lowinvestment return pulls Tryg down: this morning reported ayear-over-year dropin first-quarter profit to 445 million Danish kroner from 525 million kroner ayear earlier. The company's said the result was affected by a lower level oflarge claims and weather claims and by the internal efficiency programdelivering 45 million kroner. However, the investment return dropped to 17million kroner from 261 million kroner in the first quarter of 2015.

* Rumors are circulating that Nordea Bank is activelyseeking to sell its Baltic banking operations, DagensIndustri and Kauppalehtireport.

* DNB ASA'sinvestigation into the operations of its Luxembourgunit confirmed that the lender's internal audit department had failed indetecting the Luxembourg unit's practice of setting up offshore shell companiesfor some of its wealthy clients, notes.Aftenposten writesthat calls are rising for the resignation of CEO Rune Bjerke.


BBVAbanks on Turkey: Banco BilbaoVizcaya Argentaria SA, the majority shareholder in , is lookingat acquiring another bank in Turkey, HürriyetDaily News reports,citing BBVA CEO Carlos Torres Vila. "We want to grow in Turkey. We want toacquire another lender that will bring value to Garanti," Vila said,adding that BBVA is not actively involved in talks as there are no banks forsale at the moment.

* The Turkish government named Murat Çetinkaya tosucceed Erdem Basçi as governor of the country's central bank, Bloomberg News reports. Hisappointment needs Turkish President Recep Tayyip Erdogan's approval before itcan take effect.

* Komercní banka a.s. said thismorning that unit ESSOX s.r.o. signed agreements to acquire the entire stakesin PSA FINANCE CESKÁ REPUBLIKA s.r.o. and PSA FINANCE SLOVAKIA s.r.o. frommembers of Banque PSAFinance.

* GE Money Bank a.s. intends to apply for admission of allits ordinary shares to trading on the Prague Stock Exchange. Under the plannedIPO, the lender'ssole shareholder, GE Capital International Holdings Ltd., will offer a majorityof its stake in the bank to institutional investors. No new shares will beissued as part of the offering.

* The European Bank for Reconstruction & Developmentyesterday unveiled itsnew strategy for Hungary, under which the institution will support theHungarian financial sector in privatization and consolidation and will supportbanks by providing long-term funding. The EBRD said it will also continue itscooperation to address nonperforming loans.

* Baring Vostock funds, which control Russianlender PJSC Orient Express Bank,are struggling to find a buyer for the lender, Vedomosti writes.

* The Russian Deposit Insurance Agency wants to increasecontributions paid by lenders to the Deposit Insurance Fund, which is facing ashortage of funds, Kommersant writes. Lenders'contributions could rise by between 9 billion rubles and 14 billion rubles thisyear, with around 50% of this sum to be contributed by .

* The Russian central bank put forth a plan to reform thederivative financial instruments market, prepared within the framework ofinternational agreements reached by the G-20, Kommersant reports.

* Poland's Financial Ombudsman issued an opinion in a dispute between Swissfranc mortgage holders and their banks that lenders are not allowed to freelydetermine the interest rate of the mortgage and change it unilaterally, Rzeczpospolita reports,adding that this opinion could influence local courts to rule in favor ofmortgage holders and help them retrieve overpaid interests on their loans.


* New York Attorney General Eric Schneiderman announced a$5 billion settlementwith Goldman Sachs GroupInc. over its sale of RMBS backed by large numbers of loans fromoriginators whose mortgage loans contained material defects leading up to thefinancial crisis.

* NomuraHoldings Inc. plans to cut jobs in the Americas and Europe under anextensive plan to reduce costs, The WallStreet Journal reports.

* China is likely to reform the country's financialsupervisory system and create a financial managing bureau under the People'sBank of China, China Business News reports.Analysts said the plan will be made public at a state-sponsored conference thatmay convene in 2016.

* Argentina is looking to generate at least $12 billion froma bond sale this month to repay its creditors, but the country could expand theissuance to $15 billion depending on the pricing level, IFR reports.


BNPParibas/SmartAngels blockchain project hints at future of Europe's capitalmarkets: BNP Paribas has struck a deal with SmartAngels to useblockchain to register and invest in fast-growing start-ups and smallbusinesses.

Data DispatchEurope: Wholesale markets cast long shadow over i-banks in 2016:Wholesale markets have been grim and the poor figures seen in the fourthquarter of last year are expected to continue into the first quarter of 2016,depressing investment banks' profits.

BPI dealanother piece in Portuguese jigsaw as bad bank mooted: CaixaBanklooks set to finally take control of Portugal's BPI, in which its 44% stake hasbeen limited to 20% of voting rights. The deal comes as Portugal's financialsector continues to face uncertainty and the government considers a bad bank.

In PlayToday: Potential deal activity in the EMEA financial sector throughApril 8

Xana Kakoty, Ed Meza,Stephanie Salti, Chantal Groothengel, Yael Schrage, Praxilla Trabattoni,Mariana Aldano, Thanasis Kakalis, Gerard O'Dwyer, Beata Fojcik and Ali Kayalarcontributed to this report.

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