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Bank Millennium merges with Euro Bank; Nigeria fines Citigroup; Metro rebounds

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Bank Millennium merges with Euro Bank; Nigeria fines Citigroup; Metro rebounds

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

M&A corner

* Millennium BCP unit Bank Millennium SA finalized its legal merger with Euro Bank SA having secured relevant approvals from shareholders and the Polish Financial Supervision Authority. The operational merger of the two Polish banks will be completed by Nov. 11 and will involve rebranding and the migration of customers into a single banking system. The merged bank's total assets will amount to about 100 billion Polish zlotys, while return on equity is expected to be approximately 20% higher compared with the current level.

* CVC Capital Partners Ltd. is in advanced discussions to acquire an estimated 25% stake in ironSource Ltd. from the Israeli digital advertising software provider's shareholders for close to $500 million. IronSource CEO Tomer Bar Zeev and co-founders Itai Milrad, Eyal Milrad and Roy Milrad own 45% of the company, while Israeli venture capital firm Viola Ventures owns a 14% stake in the business. Other shareholders include 83North Ltd., Saban Ventures, Disruptive Technologies, Leumi Partners Ltd. and Clal Industries Ltd.

* U.K.-based asset manager Liontrust Asset Management PLC completed its acquisition of the entire issued share capital of local peer Neptune Investment Management Ltd. for a total consideration of up to £40 million. The acquisition increased Liontrust's AUM by £2.74 billion, the company said Oct. 1.

Regulatory changes

* Iceland's central bank reduced its benchmark rate for the fourth time in 2019, saying the country's GDP growth could weaken faster than currently expected amid an uncertain global economic outlook. The Seðlabanki Íslands said output growth eased in the first half but came in stronger than previously estimated, mostly due to a "more favorable" net trade contribution.

* The European Securities and Markets Authority launched a consultation on proposals meant to tighten the regulatory regime for market abuse. The proposals are aimed at addressing several issues, including the potential inclusion of spot foreign exchange contracts within the scope of the market abuse regulation and a possible cross-market order book surveillance framework.

* The Nigerian central bank fined 12 lenders operating in Nigeria — including Citigroup Inc. and Zenith Bank PLC — a combined 500 billion Nigerian naira for failing to comply with its mandate of increasing their loan-to-deposit ratios to 60% by the assigned Sept. 30 deadline. The country's central bank also further raised the threshold to 65% from 60% and set a December-end deadline for banks to comply in an effort to resuscitate economic growth.

* The Financial Industry Regulatory Authority, or FINRA, fined UBS Group AG unit UBS Financial Services Inc. $2 million for continued failures related to short positions in municipal securities and inaccurately representing the tax status of thousands of interest payments to customers. The U.S. watchdog said the unit had reported 2,853 positions in municipal securities as tax-exempt when they were actually taxable, and 950 positions as taxable when they were tax-exempt. The regulator added that the errors appeared on customer account statements and tax forms from August 2015, when it last sanctioned the firm, through 2017-end. UBS Financial Services agreed to pay the penalty but did not admit to or deny the charges.

In other news

* Germany's Minister for Foreign Affairs Heiko Maas said the European Union will likely retaliate to the U.S. tariffs announcement on a range of European goods by imposing its own "punitive tariffs" on the U.S. and added that Germany will seek the World Trade Organization's approval to do so.

* The U.S. and the U.K. inked a cross-border data access agreement — set to come into force early 2020 — which will enable law enforcement agencies from both countries to speed up the process of gathering electronic data needed to combat crime. The agreement will "considerably" reduce the time it takes to access data related to serious crimes such as terrorism and cyberattacks. Currently, gathering such information takes up to two years.

* European Union finance ministers will meet Oct. 10 to discuss establishing a bloc-wide watchdog to combat money laundering activities and terrorism financing to strengthen the eurozone's defenses against such crimes.

Featured during the week on S&P Global Market Intelligence

Metro's shares up sharply as chairman quits, bond issuance oversubscribed: The lender refused to comment on claims that there could be further management changes to come or that the CEO Craig Donaldson would quit shortly, and said it increased the issuance of its high-yield bonds owing to the large size of the order book.

UniCredit CEO: Regulators must measure impact of new rules on European banks: With European banks suffering under the weight of new capital regulations, regulators need to get together and review what impact a whole host of new regulation is having on the sector.

Financial Stability Board probes global cryptocurrency rules: The Financial Stability Board is working on ways to ensure that crypto assets, such as Facebook's Libra, do not impact financial stability, according to its head, Randal Quarles.