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ING CFO resigns; Belfius IPO shelved; Aareal Bank to buy German peer

Banking Essentials Newsletter - November Edition

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University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

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ING CFO resigns; Belfius IPO shelved; Aareal Bank to buy German peer

* The pound rallied yesterday after EU chief Brexit negotiator Michel Barnier said that it is "realistic" and "possible" to reach an agreement with the U.K. on its withdrawal from the bloc within six or eight weeks. At a forum in Slovenia, Barnier said both sides must reach a Brexit agreement before the start of November to allow for its timely ratification by British and European parliaments. He warned, however, that several outstanding issues, such as the matter of the Irish border, must be resolved, Bloomberg News noted.

* Meanwhile, a plan by conservative Eurosceptics to publish a 140-page draft blueprint for the U.K.'s future relationship with the EU has fallen apart, the Financial Times reported. The alternative plan included radical, across-the-board tax cuts to reshape the country's economy after it leaves the bloc.

* The shadow banking sector in Europe contracted in 2017 after more than a decade of frequent rapid growth, Reuters wrote, citing a report by the European Systemic Risk Board. Assets held by shadow banks in the region fell 0.1% to €42.3 trillion, while the overall financial sector expanded by 0.9%.

UK AND IRELAND

* Shareholders of CYBG PLC and Virgin Money Holdings (UK) PLC have greenlighted the former's all-share offer for the latter. The deal, which is expected to complete by the fourth quarter, remains subject to approval from the Prudential Regulation and Financial Conduct authorities.

* Funding Circle Holdings Ltd., which last week announced its intention to float on the London Stock Exchange's main market, said it expects admission of its ordinary shares to take place in October. The U.K. peer-to-peer lender aims to generate gross proceeds of approximately £300 million from the listing, which is expected to give it a valuation of more than £1.5 billion, Reuters noted.

* STM Group PLC announced plans to re-domicile Gibraltar-based unit STM Life to Malta.

GERMANY, SWITZERLAND AND AUSTRIA

* Aareal Bank AG reached an agreement with the German association Bundesverband deutscher Banken to acquire all shares in Düsseldorfer Hypothekenbank AG for a preliminary purchase price of approximately €162 million. Subject to necessary approvals and assuming the deal will be finalized this year, Aareal Bank said it will increase its full-year profit forecast, with consolidated operating profit — including the one-off effect of the transaction — to be in the range of between €312 million and €352 million.

* Hannover Re and Swiss Re AG both expect stable pricing development in the coming year, Handelsblatt reported.

* Former Deutsche Bank AG CEO Josef Ackermann said a merger between Deutsche Bank and Commerzbank AG would likely be more politically palatable today than when he headed the lender, Bloomberg News reported.

* Security measures of German banks against cyber attacks are in need of improvement, Deutsche Bundesbank board member Joachim Wuermeling told newspaper publisher Funke Mediengruppe.

FRANCE AND BENELUX

* ING Groep NV said CFO Koos Timmermans is stepping down. The announcement follows the group's recent €775 million settlement with Dutch prosecutors over shortcomings in the execution of customer due diligence policies and failures to prevent financial economic crime at unit ING Netherlands. Timmermans joined ING in 1996 and was appointed CFO in 2017.

* The Belgian government has shelved plans for a potential IPO of Belfius Banque SA, with Prime Minister Charles Michel saying the timing was not right and that such a move would not take place during his term of office until mid-2019, Reuters wrote, citing Belga news agency.

* Axa said it has obtained all regulatory approvals needed to complete its proposed acquisition of XL Group Ltd. The deal is expected to close Sept. 12, pending the satisfaction of the remaining customary closing conditions.

* Pan-European cash equities exchange Aquis Exchange PLC unveiled plans to establish a new trading venue in Paris in preparation for the U.K.'s departure from the European Union. The new company, Aquis Exchange SA, will open an office in the French capital and will be classified as an investment firm authorized to operate a multilateral trading facility.

* La Française has announced the acquisition of German asset manager Veritas, Les Echos and L'Agefi reported. The Crédit Mutuel Nord Europe subsidiary already owns an office in Frankfurt and manages €1 billion, while Veritas has €7.2 billion in assets under management. The deal could be finalized as soon as the end of this year.

SPAIN AND PORTUGAL

* Caixa Geral de Depósitos SA has been considering the possibility of promoting mergers and acquisitions of companies that belong to the banking group, Jornal de Negócios reported. However, no further steps have yet been taken in order to formalize the discussions on the topic.

ITALY AND GREECE

* UniCredit SpA has a plan B should merger talks with Société Générale SA fall through, MF wrote, noting that a deal could require up to €7 billion to restore SocGen's capital coefficients while uncertainty over Italy's sovereign rating also compromises its execution. The daily cited as ideal alternatives Spain's Banco Bilbao Vizcaya Argentaria SA or the Netherlands' ABN AMRO Group NV.

* UniCredit is also getting ready to sell 2 billion of nonperforming loans equally split between secured and unsecured, with preliminary offers already been received from specialized U.S. funds for the secured NPLs and binding offers for the unsecured NPLs, Il Sole 24 Ore reported, noting that Cerberus and Banca IFIS SpA are in the race for the latter project.

* Meanwhile, UniCredit has been minded not to exit the shareholder pact of Mediobanca SpA, insiders told Reuters. Members of the shareholder accord, which hold a combined 28.5% stake in Mediobanca, have until the end of the month to make a decision on whether to leave the pact or not.

* Italian market watchdog Consob has not seen anything anomalous in the list for the board of Banca Carige SpA presented by Raffaele Mincione and Gabriele and Aldo Spinelli, the admissibility of which is being challenged by Carige's largest shareholder Vittorio Malacalza, MF reported, noting that a decision by a judge is due Sept. 15.

* IBL Banca received authorization from the Bank of Italy for its joint venture with Europa Factor, which will aim to buy and sell NPLs originated in the banking sector, MF wrote.

* Some 14 cooperative banks united under the Luigi Luzzati Spa platform created under the umbrella of sector association Assopopolari is readying a €1.7 billion securitization with Banca Popolare di Bari leading the group and contributing some 49% of total NPLs, Il Sole 24 Ore reported.

NORDIC COUNTRIES

* Denmark is working on a new bill aimed at increasing fines related to money laundering by roughly eightfold, Bloomberg News reported, citing a draft published by the country's Financial Supervisory Authority.

* Meanwhile, Danske Bank A/S said it expects to publish Sept. 19 the results of investigations into suspected money laundering at its Estonia branch.

* Swedish private equity firm EQT Partners AB may pursue an IPO as one outcome of a wider strategic review, a source told Bloomberg News. A potential listing would be aimed at reinforcing the company's balance sheet, the strength of which is a prerequisite for continued growth.

EASTERN EUROPE

* Latvia has regained representation on the ECB's governing council following the appointment of Latvijas Banka Deputy Governor Zoja Razmusa as an alternate by the central bank governor, Ilmars Rimševics, who is facing bribery charges.

* The European Bank for Reconstruction and Development will look into acquiring stakes in Slovenian lenders Nova Ljubljanska banka d.d. and Abanka d.d., which are set to be privatized this year and in 2019, EBRD Vice President Pierre Heilbronn told Reuters.

* Russia's development lender Vnesheconombank could receive a 300 billion Russian ruble capital boost over the next few years, Vedomosti reported, citing Russian Finance Minister Anton Siluanov. The official noted that some funding could be earmarked for VEB already in 2019, with the financial resources coming from the country's National Wealth Fund.

* A Moscow court invalidated a number of transactions between Otkritie Financial Corp. Bank and O1 Group's units, which took place shortly before Otkritie's August 2017 bailout by the central bank, Vedomosti said. Following the court ruling, O1 Group will have to pay back 34 billion Russian rubles to Otkritie Bank.

* Dmitry Levin, who until recently served as management board chairman at Public Stock Co. Orient Express Bank, will soon join Otkritie Financial Corp. Bank to head its financial division, Kommersant reported.

* Banker Mikhail Lomtadze secured permission from the Kazakh central bank to increase his 9.98% stake in JSC Kaspi Bank, Kapital.kz reported.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: 3 foreign firms eye Reliance Home Finance stake; Fitch upgrades Thai banks

Middle East & Africa: Tadawul IPO won't take place in 2018; Nova Merchant Bank names acting CEO

Latin America: Bancomext-Nafin merger plan criticized; Banco de Occidente names president

North America: SEC halts trading of 2 securities; LendingClub to not settle FTC suit

Global Insurance: Catalina-Zurich talk deal; Lloyd's confirms CEO hire; Japan typhoon losses

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Hannover Re will continue reinsuring coal, CEO says: CEO Ulrich Wallin told journalists at the Monte Carlo reinsurance Rendez-vous he is "not a great fan" of putting indirect pressure on commercial enterprises by withdrawing cover.

Analysts split on Scor value after failed Covéa offer: The U.S. banking industry has increasingly relied on CDs to get ahead of rising interest rates, meet funding needs and satisfy growing customer demands.

Norway's Sovereign Wealth Fund calls on company boards to limit ocean pollution: Norway's $1 trillion sovereign wealth fund is calling on the boards of companies with businesses that directly or indirectly affect oceans to address ways of limiting pollution of the world's oceans.

Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Praxilla Trabattoni, Mariana Aldano contributed to this report.

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