trending Market Intelligence /marketintelligence/en/news-insights/trending/G_g8yrVaoIIXlv_PXJDebw2 content esgSubNav
In This List

Deutsche Bank raises €8B; Banco Popular CEO to go; Lloyds downsizes branches

Blog

Latin American and Caribbean Market Considerations Blog Series: Focus on LGD

BLOG

Banking Essentials Newsletter: June Edition

Case Study

กรณีศึกษา A Bank Takes its Project Finance Assessments to a New Level

Blog

Financial Institutions Factor Transition Risk into Climate-Related Stress Testing


Deutsche Bank raises €8B; Banco Popular CEO to go; Lloyds downsizes branches

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

Across the industry

* ECB President Mario Draghi said the negative side-effects of the central bank's monetary policy "have so far been limited," quashing rumors that the regulator might end its negative rate policy this year. ECB Chief Economist Peter Praet said raising the negative deposit rate too early would make its other policies less effective.

* Retail financial advisers in the U.K. will be allowed to take written notes of phone conversations with clients instead of fully taping such conversations under near-final rules published by the Financial Conduct Authority on the implementation of the revised Markets in Financial Instruments Directive, or MiFID II.

Brexit matters

* The European Parliament approved a resolution regarding the start of the U.K.'s Brexit talks, with 516 of its members in favor, 133 opposed and 50 abstaining.

* U.K. Prime Minister Theresa May said the U.K. will only be able to sign a final trade deal with the EU after it leaves the bloc following the conclusion of two years of negotiations. She also noted the importance of agreeing what she termed an "implementation phase" for the period post-Brexit but before a trade deal is signed.

* Bank of England Governor Mark Carney said banks must prepare for "the full range of possible scenarios" around the U.K.'s exit from the EU and told them to submit contingency plans to the Prudential Regulation Authority by July.

* Foreign bankers based in London are volunteering to move back to their home countries ahead of Brexit, insiders told Bloomberg News.

Game plans

* Bank of Ireland plans to establish a new listed holding company, Bank of Ireland Group Plc, to comply with European rules on bank resolution. The move comes after the ECB's Single Resolution Board said it should set up a holding company to enable its resolution via a so-called single point of entry bail-in strategy.

* DNB ASA CEO Rune Bjerke said the Norwegian lender has no plans to decrease activity in its London operations as a result of Brexit.

Management moves

* The top executives managing Royal Bank of Scotland Group Plc's Williams & Glyn business, including CEO Jim Brown and CFO Leigh Bartlett, will leave the lender after it proposed an alternative plan to selling the more than 300-branch network, Sky News reported. Brown will be replaced by Paul Fox, the unit's managing director of retail and business banking.

* Banco Popular Español SA said CEO Pedro Larena would be stepping down for personal reasons but would continue in his role until a successor is found. The bank also announced that it would revise its past accounts after discovering the need for additional provisions. A source told Reuters that the bank would book an additional €240 million loss for full year 2016.

* The Central Bank of Ireland named Bernard Sheridan acting deputy governor of financial regulation, effective April 8, following Cyril Roux's resignation. Peter Sinnott, head of the financial markets division, was also appointed director of financial operations.

M&A corner

* Mediobanca - Banca di Credito Finanziario SpA now owns 100% of Banca Esperia SpA after completing the acquisition of the 50% stake it did not already own from Banca Mediolanum SpA for €141 million.

* Co-operative Bank Plc said it obtained a number of nonbinding proposals for a stake in the bank and that the board selected several of them to enter the next phase of the sale process. Meanwhile, Co-operative Group Ltd. reduced the value of its 20% shareholding in Co-operative Bank to zero at the end of 2016 from £140 million at half-year 2016, citing the uncertainty posed by the troubled lender's sale process.

* BlackRock Inc. and other international fund managers will seek an injunction to block the recently announced sale of a controlling stake in Portuguese lender Novo Banco SA to U.S. private equity firm Lone Star Funds for a €1 billion capital injection.

* BNP Paribas SA signed a memorandum of understanding to acquire a 95% stake in Financière des Paiements Électroniques, which provides the Compte-Nickel payments account. Financial terms were not disclosed.

In other news

* Deutsche Bank AG raised gross proceeds of approximately €8.0 billion following the completion of its share sale. The subscription price was €11.65 per share.

* The European Commission has launched an "in-depth investigation" into RBS' proposed alternative plan to selling Williams & Glyn, which it had been required to divest by 2017-end as part of the conditions of its 2008 bailout. Separately, RBS is set to face about £125 million in legal costs to fight a case brought by shareholders suing it over its 2008 cash call, City A.M. reported, citing an interim court ruling.

* Lloyds Banking Group Plc intends to shrink hundreds of its branches into "micro" branches to be staffed by as few as two people carrying tablets to help customers make basic transactions, the Financial Times reported. Separately, the lender said it will close a further 100 branches in a move that would complete its planned target of roughly 400 branch closures between 2014 and 2017-end.

* The U.K. government further reduced its stake in Lloyds to below 2% after the latest round of share sales.

* Banca Popolare di Vicenza SpA and Veneto Banca SpA confirmed that the ECB finds both banks to be currently solvent and that they fulfill the requirements to apply for precautionary recapitalization by the Italian state.

Featured during the week on S&P Global Market Intelligence

Money-laundering scandals said to reveal gaps in EU enforcement, transparency: A lack of clarity over the beneficial owners of shell companies in Europe and uneven enforcement of financial crime laws are making money laundering more difficult to prevent.

Banco Popular may have to choose between cash call and takeover: Banco Popular Espanol has unsettled investors with its announcement that it will have to increase provisions for past earnings, leading to concerns that the Spanish bank may have to increase its capital once again or find a buyer.

RBS branch cull makes strategic sense, but could hit SMEs: Some smaller firms could suffer as a result of RBS' latest branch closures, at a time when the bailed-out bank is trying to show it can support the SME sector.

Tax probe unlikely to jeopardize Credit Suisse's capital raising plan: Credit Suisse should be able to raise more capital despite the ongoing investigations over alleged tax evasion and money laundering launched against some of its clients in five countries, although the timing is not ideal, analysts have said.