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Lloyds, Schroders in wealth merger talks; StanChart probed over Iran breaches


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Lloyds, Schroders in wealth merger talks; StanChart probed over Iran breaches

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

Expected deals

* Schroders PLC confirmed that it is in discussions with Lloyds Banking Group PLC to work "closely together in parts of the wealth sector," following reports that the banking group is finalizing plans to merge its £13 billion wealth management unit into a new joint venture with the asset manager as part of a roughly £500 million three-pronged deal between the two firms.

* BNP Paribas SA is considering selling part of its stake in Indian insurance company SBI Life Insurance Co. Ltd. over the coming quarters as local regulation requires a larger free float.

* Czech Republic-based Moneta Money Bank a.s. is in talks with Netherlands-based Home Credit BV to acquire the latter's Air Bank a.s. unit and its other businesses in the Czech Republic and Slovakia. Both parties signed a nonbinding memorandum of understanding for the acquisition.

* Natixis is considering buying Ingenico Group SA in a bid to develop its payments business. The bank said it is interested in an "industrial combination" of its payment activities with that of Ingenico, adding that it has held preliminary discussions.

Confirmed transactions

* Banca Monte dei Paschi di Siena SpA is expected to begin the process to dispose of properties with a value of €500 million in the next few weeks, while it is seen receiving nonbinding bids for a €2.4 billion bad loan portfolio Oct. 12, both elements of a €5 billion disposal plan that is also expected to include the sale of its French operations. Monte dei Paschi last week announced an agreement to sell Belgian unit Banca Monte Paschi Belgio SA to funds managed by private equity fund Warburg Pincus LLC for €42 million.

* Nordea Bank Abp agreed to offload a bad loan portfolio to Norwegian debt management company B2Holding ASA, with the deal expected to close Oct. 31.

* Santander Bank Polska SA acquired 274,444,939 shares of Deutsche Bank Polska SA from Deutsche Bank AG for 257.96 million zlotys, as part of a December 2017 deal under which Banco Santander SA's Polish unit agreed to acquire part of Deutsche Bank's local business. The purchased shares equal more than 10% of Deutsche Bank Polska's share capital.

* VTB Bank (PJSC) signed a memorandum to buy 81% of fellow lender PJSC SAROVBUSINESSBANK. Financial details of the transaction were not disclosed.

* Banco Bilbao Vizcaya Argentaria SA completed the transfer of its Spanish real estate business to Cerberus Capital Management LP.

Conduct cases

* Standard Chartered PLC is collaborating with U.S. authorities with "constructive, ongoing discussions" regarding its violation of Iran sanctions between 2007 and 2014 and is seeking an "acceptable resolution."

* Standard Chartered CEO Bill Winters, meanwhile, criticized media coverage of the bank's efforts to boost financial crime controls, reassuring staff about the bank's progress in fixing its regulatory compliance issues.

* Russia's Federal Financial Monitoring Service said it has not been contacted by Danish and Estonian financial crime authorities regarding money laundering investigations into Danske Bank A/S' Estonian subsidiary.

* The Irish central bank fined Citigroup Inc.'s Irish unit, Citibank Europe PLC, roughly €1.3 million for six breaches of its lending code. The breaches also include failure to put in place necessary policies and procedures to implement the code and failure to report certain related party exposures.

* UBS Group AG, along with its French subsidiary and six executives, began their trial over charges of assisting wealthy clients in tax avoidance in France, for which France is demanding damages of €1.6 billion. The Swiss bank will also face charges of illegally soliciting clients in France.

Making changes

* Royal Bank of Scotland Group PLC is considering changing name after resolving most of its financial and restructuring problems that have plagued it for a decade.

* Otkritie Financial Corp. Bank is combining its asset management and brokerage units into Otkritie Investments, a single platform offering products for novice investors, professional traders and institutional investors.

In other news

* European banking supervisors are increasing scrutiny of Italian lenders' liquidity "more intensely than usual" following a spike in the country's government bond yields.

* Banca Carige SpA's board will consider identifying an investment bank to explore possible business combinations. The lender is also planning a €200 million subordinated bond guaranteed by its key shareholder, the Malacalza family, to boost its capital ratios, MF reported.

* Banque de France raised its GDP growth forecast for the third quarter to 0.5% from 0.4% after industrial production and service sector activity grew strongly in September.

* The ECB told financial institutions that they will have to limit back-to-back booking by 2022.

* Bank Rossiysky Capital (JSC)'s board issued the initial approval for the Russian lender to receive financial assistance of up to 19.8 billion Russian rubles.

* Bankia SA CEO José Sevilla would not rule out further strategic alliances in the future, but has nothing in sight for the moment. The Spanish lender reportedly wants to develop further partnerships with other financial players to broaden its offering for customers and to help it specialize in certain products.

Featured during the week on S&P Global Market Intelligence

StanChart's new Iran fine may pave way for takeover, loan growth, analysts say: The fine would be seen as "cathartic" by analysts, who suggest the bank's way out of its current stock rut is quicker loan growth — despite growing economic difficulties in its main markets.

Bankers among 19 held in 2018 for helping gangs hide money: UK tax investigator: Bank employees were arrested for taking bribes from organized crime groups that used accounts to launder money and evade tax, said an investigator at the U.K. tax authority.

Nordic banks face more scrutiny over Baltic ties: anti-money laundering expert: Estonia's revelation that more than $1 trillion flowed through its banks in recent years piled pressure on the shares of Scandinavian banks, which dominate the Baltic market amid fears of more money laundering revelations.

Asian ship lending picks up as German banks continue to cut exposure: Asian banks have increased their shipping loans by almost 40% over five years, filling the gap left by mainly German lenders withdrawing from the sector. Shipping still accounts for most bad loans at Germany's top sector banks, according to Moody's.

Bank of England fears rise in loans to heavily indebted firms risks stability: The bank's Financial Policy Committee said in its October report that leveraged loans are growing as quickly as subprime mortgage lending before the 2008 crash. It also warned the EU must take action fast to allow cross-border clearing post-Brexit.