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African bond sale haunts European banks; US to sanction Russia on election hacks


Commercial Banking: June 22nd Edition


Commercial Banking Newsletter June Edition - 2022


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African bond sale haunts European banks; US to sanction Russia on election hacks

* Credit Suisse Group AG, together with JSC VTB Bank and BNP Paribas SA, is part of an investigation by the U.S. Securities and Exchange Commission over its involvement in the sale of $850 million in bonds issued by Mozambique, The Wall Street Journal reports. The proceeds from the bonds, sold in 2013 and meant to develop tuna fishing in the impoverished nation, were allegedly also used to buy military equipment.

* The U.S. will announce today a series of sanctions against Russia for allegedly hacking into the computer systems of U.S. political institutions and individuals and leaking information to help Donald Trump win the presidential race, Reuters reports, citing two U.S. officials.


* U.S. lenders Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. have paid nearly 1,000 of their top employees in London no less than €1 million in pay deals last year, The Guardian reports. In its regulatory disclosures, Goldman Sachs said 11 of its key City staff received at least €5 million.

* Barclays Plc Chairman John McFarlane expressed the bank's commitment to London post-Brexit, saying the City offers a "competitive advantage" in terms of financial services, The Daily Telegraph writes. McFarlane also stressed the lender's push to increase its focus on the U.K. and U.S. markets.

* Brexit pressure group Leave Means Leave has urged business groups in the other 27 EU member states to persuade their respective governments to pursue a "sensible" trade agreement with the U.K. in Brexit negotiations, Bloomberg News reports. In a letter, the group warned that trade barriers will have a "detrimental effect" on jobs across the bloc, and called for a trade deal that has near-zero tariffs.

* Data from the British Bankers' Association indicates that the number of mortgage applications approved by U.K. lenders dropped slightly last month to 40,659 from a five-month high of 40,835 in October, and was down 9% from the year-ago period, Reuters reports.


* PayPoint Plc sold its mobile payments business to Volkswagen Financial Services AG for £26.5 million in cash. The business comprises PayByPhone Technologies Inc., PayByPhone Ltd., Mobile Payment Services SAS and Adaptis Solutions Ltd.

* The Insurance Regulatory and Development Authority of India granted global reinsurer Hannover Re a certificate of registration to set up a branch in the country, the Press Trust of India reports. Munich Re and Swiss Re Ltd. were among those also granted final approval by the regulator.

* Damage to houses and industrial property from storms and related natural disasters cost Germany's insurers a total of €2 billion in 2016, less than the multi-year average of €2.4 billion, the German Insurance Association said in its annual report released Wednesday, Handelsblatt notes. Reuters also covers.

* Austria's insurance companies in the third quarter faced a 0.85% decline in premium volumes to €3.81 billion, mostly due to lower premiums from life insurances, according to a report issued by Austrian financial market supervisory authority FMA.

* UNIQA Insurance Group AG by year-end will pay back two capital bonds with a total nominal value of €250 million.

* AutoBank AG increased it capital by €800,000, converting subordinated bonds into equity, Der Standard notes.

* A group of Germany's regional administrations is lobbying for a tougher approach in dealing with so-called cum/cum trades, a practice that allows foreign investors to avoid paying a German tax on dividends, the Financial Times reports. The group is led by North Rhine-Westphalia, which is pushing for regions to be able to seek billions of euros in back taxes from banks involved in such transactions prior to 2016.

* Germany's Volksbanken and Raiffeisen cooperative banks are rejecting calls by the central bank and regulatory authorities to adapt their business model in the wake of negative interest rates, tighter regulation and digitization. Ralf Barkey, chairman of the board of the association of cooperative banks in Rhineland-Westphalia, and Michael Bockelmann, president of the association of cooperative banks in Frankfurt, tell Börsen-Zeitung that their business model is "working well" and is "fit for the future."


* French companies can continue to choose collective prudential insurance providers, after the country's highest court threw out the government's latest attempt to limit their choice to insurance companies approved by unions and trade bodies, Le Figaro reports.


* Bain Capital has acquired a portfolio of debt linked to real estate assets worth €364 million from Banco de Sabadell SA, Expansión reports. According to market sources, the U.S. firm may have paid about €150 million for the portfolio, dubbed Proyecto Traveller.

* Spanish restructuring fund FROB rejected an investigation into former Banco de España Governor Miguel Ángel Fernández Ordóñez for alleged fraud involving the stock exchange debut of Bankia SA, El Mundo writes.

* The ECB authorized Ibercaja Banco SA to repay 40% of the contingent convertible bonds issued by Caja3 in 2013, Europa Press writes. The early repayment will amount to €163 million.

* The Portuguese government postponed to 2017 the entire capitalization process of Caixa Geral de Depósitos SA. The first phase of the capital injection is now expected to take place in the first week of January. Meanwhile, the lender's outgoing president, António Domingues, is expected to be freed from his duties by the end of the week, the paper adds.

* Caixa Económica Montepio Geral will freeze employees' salaries at least until the end of 2017, as part of an agreement with union workers aimed at avoiding mass dismissals. In case the banks presents positive results, a 5% profit sharing may be considered, Dinheiro Vivo writes.


* S&P Global Ratings said the Italian government's decision to set up a €20 billion fund to support its ailing banks, including Banca Monte dei Paschi di Siena SpA, has no immediate effect on its ratings on the country. The agency currently has BBB-/A-3 long- and short-term sovereign credit ratings on Italy, with a stable outlook on the long-term rating.

* The ECB and European Commission must ensure that Italy complies with European rules in the rescue of Monte dei Paschi, a German finance ministry spokesman tells Reuters.

* The boards of three of the four small-sized Italian banks bailed out last year are slated to meet tomorrow to approve plans to offload a portion of their nonperforming loans portfolio to the Atlante fund, ahead of the expected signing of a preliminary deal to sell these lenders to Unione di Banche Italiane SpA on Saturday, Il Sole 24 Ore reports.

* Intesa Sanpaolo SpA included Apollo Global Management, Cerberus and Christofferson Robb & Co. in its short list of bidders for a €2.5 billion NPL portfolio expected to be sold in the first quarter of 2017, sources tell Reuters.

* Eurobank Ergasias SA is looking to sell €1.5 billion of nonperforming loans, Kerdos writes.


* Norges Bank Governor Øystein Olsen said the central bank expects to maintain its key policy interest rate and that there is a higher probability of a rate cut than of a hike, Reuters writes. Olsen also floated the possibility of negative rates in the event of "large new disruptions" to the Norwegian economy.

* The Norwegian FSA said BB Finans, the Norwegian subsidiary of Swedish niche bank TF Bank, meets the requirements for a banking license, Realtid reports. BB Finans has 12 months to evaluate the conditions for applying for such a license.

* The Swedish government, concerned about the lack of capital in many small and medium-sized businesses, wants banks to focus on finding ways to increase lending to businesses, Dagens Industri reports.

* Growth in household lending in Sweden keeps slowing down, SvD reports, noting that increase in lending was 7.2% in November, down from 7.5% in September, mainly due to the halt in the decline of interest rates.


* The Russian central bank estimates that local lenders will earn about 900 billion rubles in 2016, compared to the 2015 profit of 200 billion rubles, Vedomosti writes. However, increasing profits did not benefit the Russian economy, as banks used the funds to pay off expensive financing rather than to increase lending.

* Russia's central bank revoked the license of Commercial Bank NKB (LLC), citing problems with asset quality and noncompliance with regulations aimed at combating money laundering and financing of terrorism, says.

* The Russian central bank refused to issue accreditation to Russia's National Rating Agency and RusRating, Vedomosti reports. So far, only Russia's Analytical Credit Rating Agency and Expert RA secured regulatory accreditation.

* Polish antimonopoly watchdog UOKiK head Marek Niechcial said the regulator is checking whether local insurance companies conspired in setting motor insurance prices, following their recent steep increase, Parkiet reports. The official warned that insurers involved in potential collusion face fines amounting to up to 10% of their annual turnover.

* Following the lowering of the cost of credit, planned by Polish authorities, local non-bank lending companies will most likely lose their ability to generate profits and will not be able to pay coupons on issued bonds, news agency PAP says, citing Poland's Association of Loan Companies.

* Converse Bank CJSC raised its statutory capital by 2.43 billion Armenian drams following a closed placement of additionally issued shares. The lender's total regulatory capital currently amounts to 31.9 billion drams, exceeding the required minimum regulatory threshold.

* S&P Global Ratings lowered JSC Kazinvestbank's long- and short-term counterparty credit ratings to D/D from B-/C and its national scale rating to D from kzB+ following the National Bank of Kazakhstan's decision to revoke its license.

* TBC Bank Group Plc said unit JSC TBC Bank recorded interest income and recovery of a provision expense of a previously written off amount in relation to a loan issued to a corporate client of $13.4 million, to be accounted for in its fourth-quarter statements.

* Türkiye Kalkinma Bankasi AS will sell those shares that remained unsubscribed following its rights issue, which raised the bank's issued capital to 500 million lira from the previous 160 million lira. The shares will be sold in the primary market of Borsa Istanbul on Jan. 2 and Jan. 3, Finans Gündem writes.


Asia-Pacific: China suspends banks for illegal FX deals; Hannover Re to set up Indian branch

Middle East & Africa: Mozambique bond sale under SEC scanner; Bahrain regulator seals Future Bank fate

Latin America: Peru to cut reserve requirements; Cuba's GDP shrinks 0.9%

North America: NYSE Arca's ETF listings shrink as funds switch to rivals

North America Insurance: Flood insurance needs rise; American United wins annuity contract


Data Dispatch Europe: Internal model-reliant European banks face Basel IV capital hit: Upcoming changes to rules on how banks calculate risk could pass a heavy capital bill to banks in the Netherlands and Scandinavia, data shows.

European banks: Key trends to watch in 2017: Regulatory fragmentation, possible fiscal loosening and more banking consolidation in several countries lie ahead in 2017.

NN Group bid leaves Delta Lloyd investors facing big decision: While some analysts say the proposed €2.5 billion deal would represent a bargain for NN Group, others think the offer represents a great opportunity for Delta Lloyd.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Xana Kakoty, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Thanasis Kakalis, Ali Kayalar, Heather O'Brian, Brian McCulloch, Sophie Davies and Mariana Aldano contributed to this report.

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