* European banks further improved their capital positions as of the end of June 2017, with the total average common equity Tier 1 ratio improving to 13.8% from 13.4% at the end of December 2016, according to the results of the European Banking Authority's latest CRD IV-CRR/Basel III monitoring exercise. The exercise estimated no shortfalls of CET1 capital, and relatively low shortfalls of Tier 1 and total capital of both €100 million. A similar exercise by the Basel Committee also found that all banks are meeting both the minimum and target CET1 capital requirements.
* In a speech on Brexit set for today, U.K. Chancellor Philip Hammond is expected to tell EU leaders that including financial services in a free trade deal is in the "mutual interest" of both the bloc and his country, BBC News wrote. Meanwhile, French Finance Minister Bruno Le Maire rejected the U.K.'s plan to include financial services in such a deal, telling the BBC that equivalence regimes, where both the EU's and Britain's standards are recognized by each other, would be the "best solution" for financial services.
UK AND IRELAND
* Royal Bank of Scotland Group Plc has reached a $500 million settlement with New York Attorney General Eric Schneiderman over claims of "deceptive practices and misrepresentations to investors" in the issuance of residential mortgage-backed securities leading up to the 2008 financial crisis.
* The U.K.'s HM Treasury launched a new independent review over the prudential supervision of Co-operative Bank Plc between 2008 and 2013. The review will include the bank's withdrawal from the so-called Project Verde, the deal to buy 632 Lloyds Banking Group Plc branches in 2013, to "understand what lessons can be learned." The Prudential Regulation Authority said it "supports" the review, Reuters noted.
* Meanwhile, the U.K. Financial Conduct Authority banned former Co-op Bank Chairman Paul Flowers, who pleaded guilty in 2014 to charges of illegal drug possession, from the financial services industry, saying his conduct "demonstrated a lack of fitness and propriety required to work" in the sector.
* Legal & General Group Plc reported full-year 2017 after-tax profit attributable to equity holders of £1.90 billion, up from £1.27 billion a year earlier. The group noted that the figure includes a one-off £246 million tax benefit, following the reduction in the U.S. corporate income tax rate.
* Meanwhile, Legal & General is in advanced talks to buy out a stake of about 47.5% from Patron Capital Ltd, its fellow shareholder in homebuilder Cala Group Ltd., Sky News reported. The deal, which could be completed in the next few weeks, would reportedly value Cala at more than £500 million.
* The U.K. FCA sent letters to a number of investors, including Standard Life Aberdeen Plc, requesting them to come in for interviews over the timing of the sale of their stakes in Carillion Plc, as part of the regulator's probe into the financial statements of the collapsed construction and engineering firm, Financial Times wrote.
GERMANY, SWITZERLAND AND AUSTRIA
* The IPO of Deutsche Bank AG's DWS asset management division has attracted interest from U.S. investment firm BlackRock Inc., billionaire investor George Soros and major sovereign wealth funds including Singapore's Temasek and the Public Investment Fund of Saudi Arabia, an insider told Reuters.
* Meanwhile, Japan-based Nippon Life Insurance Co. intends to buy close to 10% of DWS during its IPO and also enter a business partnership to allow DWS to expand on the Asian market, Frankfurter Allgemeine Zeitung reported.
* The savings banks association of Lower Saxony and the German state of Lower Saxony, as the biggest stakeholders of Norddeutsche Landesbank Girozentrale, are discussing the future business model of the bank and whether it is in need of another capital injection, Handelsblatt quoted Thomas Mang, president of Lower Saxony's savings banks association, as saying.
FRANCE AND BENELUX
* S&P Global Ratings placed with negative implications the AA- long-term issuer credit and insurer financial strength ratings on the entities viewed as core or highly strategic to Axa, following the announcement of the French insurer's $15.3 billion acquisition of Bermuda-based XL Group Ltd. Fitch Ratings also placed on Rating Watch Negative Axa's A long-term issuer default rating and F1 short-term issuer default rating. Moody's, meanwhile, changed the outlook on Axa to negative from stable.
* The French central bank has outlined a series of proposals to protect individuals from cryptocurrencies and fight against illegal activities, Les Echos and La Tribune wrote. The regulator will ban savings products containing cryptocurrencies intended for a public use as well as deposits and loans activities in cryptocurrencies, among other measures.
* Former French Finance Minister and Economy Minister François Baroin has been recruited by Barclays Plc to serve as an external senior adviser for its banking business in France, Les Echos reported.
* In January, life insurance inflows in France have reached €2.5 billion, compared to €500 million in December 2017, according to Les Echos.
* Netherlands-based Exin Financial Services is reportedly seeking to raise additional funds to finance its roughly €718 million acquisition of National Bank of Greece SA unit Ethniki Hellenic General Insurance Co. SA, according to The Insurance Insider.
SPAIN AND PORTUGAL
* A group of former shareholders of Banco Popular Español SA led by Mexican billionaire Antonio del Valle filed an international arbitration against the Spanish government in connection with the flash sale of the entity to Banco Santander SA in June 2017, Cinco Dias reported.
* Spain's deposits guarantee fund has paid Banco de Sabadell SA a sum in excess of €1.3 billion as reimbursement for losses incurred by the banking group in 2017 in relation to the sale of certain protected assets of former savings bank Caja de Ahorros del Mediterráneo, Europa Press wrote.
* Portugal could be forced to inject more state funds into Novo Banco SA under the terms of a recent deal to sell a 75% stake in the lender to U.S. private equity fund Lone Star Funds, Jornal de Negócios and Jornal Económico reported, citing a European Commission report that also noted inadequate data and credit checking procedures at the bank.
* Meanwhile, Novo Banco intends to cut a further 400 jobs and shutter 30 branches by the end of the first half in line with the sale terms, Jornal de Negócios said.
* Portugal's Fidelidade - Companhia de Seguros SA has agreed to buy a 51% stake in Peru's No. 4 insurer, La Positiva Seguros y Reaseguros SA, according to Jornal de Negócios and Jornal Económico.
ITALY AND GREECE
* UniCredit SpA said it expects total issuance volume for green bonds to reach a record $130 billion in 2018, up 9% from $119 billion in 2017. The Italian lender expects a "very substantial" share of placements to originate in Europe, where 49% of total issuance was made in 2017, followed by Asia at 27% and North America at 13%.
* There should be a task force within Italian banks to manage NPLs instead of outsourcing this job, MF cited Lando Maria Simeoni, head of the Fabi banking union as saying.
* The change in Italian government, and therefore of the reference shareholder, will have no impact on Banca Monte dei Paschi di Siena SpA, MF cited CEO Marco Morelli as saying. Il Sole 24 Ore also cited Morelli as adding that acquisitions are not on his table.
* Banca Carige SpA said the impact of the new IFRS 9 accounting standards, estimated on a preliminary basis, would amount to a total of approximately €360 million, corresponding to an estimated impact of 210 basis points on the Italian lender's fully loaded CET1 ratio. Meanwhile, the bank's board found groundless and therefore rejected the request by Raffaele Mincione, the third-largest shareholder in the bank with a stake of over 5%, for a seat on the board, MF reported.
EASTERN EUROPE
* The Russian central bank said it will spend 56.9 billion Russian rubles on the recapitalization of B&N Bank, bailed out in September 2017. The capital hike will be carried out via the acquisition of B&N Bank's additional shares by the regulator. The central bank also said it plans to complete the merger of B&N Bank and Otkritie Financial Corp. Bank by April 2019.
* The Russian central bank issued a new instruction limiting the voting rights of Vozrozhdenie Bank co-owner Dmitry Ananiev to 10%, Vedomosti reported.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: China to cut banks' provision ratio; Aussie bank begins talks for NZ unit sale
Middle East & Africa: Bank Leumi FY'17 profit up 13.7%; EU to remove Bahrain from tax blacklist
Latin America: Brazil's Banco Original sees ownership rejig; Peru's La Positiva to sell stake
North America: JPMorgan, Capital One seek Amazon partnership; 2 New York-based banks merging
North America Insurance: Arkansas gets Medicaid work approval; ILS options for NFIP reinsurance placement
NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE
More insurers waiting in wings as UK bulk annuity market heats up: The limit of insurers' appetite for U.K. bulk annuity deals has yet to be tested, but a "bumper year" in 2018 might exhaust capacity and attract new entrants.
Qatar standoff remains greatest geopolitical risk for Gulf banks: S&P analyst: Asset quality at banks in the Gulf Cooperation Council area is at risk if the dispute between Qatar and its Arab neighbors intensifies, according to Mohamed Damak, global head of Islamic finance at S&P Global Ratings.
Sheryl Obejera, Ed Meza, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Praxilla Trabattoni and Helen Popper contributed to this report.
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