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Kerviel's penalty cut; HSBC succession planning; no state help for Deutsche


Insight Weekly: US inflation soars; real estate faces slowdown; megadeals drive tech M&A


Commercial Banking: June 22nd Edition


Insight Weekly: Path to net-zero; US manufacturing momentum; China's lithium M&A frenzy


Commercial Banking Newsletter June Edition - 2022

Kerviel's penalty cut; HSBC succession planning; no state help for Deutsche

Digital paymentsmarket 'ripe for disruption': The Boston Consulting Group warned that thedigital payments business is "ripe for disruption" and that theworld's biggest banks could lose control of the market to small financialtechnology startups and global tech giants, CityA.M. reports.The group said banks need to "maximize security, minimize complexity andadd value beyond pure payments" if they want to survive in transactionalbanking.

* Half of more than 300 insurance executives whoparticipated in a BlackRock study said they expect to hold more cash in thenext 12 months to 24 months, up from 36% a year earlier, the Financial Times reports.The increase comes as insurance companies struggle to find attractiveinvestment opportunities.

* France and Germany opposed the idea of introducing newrules aimed at forcing banks to set aside additional capital, saying such amove would restrict lending and harm growth prospects, Reuters reports.German Finance Minister Wolfgang Schäuble and his French counterpart, MichelSapin, also underlined the need for new Basel III rules to not put Europeanbanks at a disadvantage.

* German Finance Minister Wolfgang Schäuble called onmembers of the German parliament's finance committee to ask tough questionsabout the ECB's monetary policy when ECB President Mario Draghi appears beforethe panel this week, according to a Bildreport carriedby Reuters. Draghi is scheduled to address the parliament's finance and budgetcommittees on Wednesday.

* ECB Vice President Vítor Constâncio said the central bankis aware that a prolonged period of low interest rates could raise financialstability risks and that it had hopes the eurozone economy would quicklyrespond to its stimulus measures, Reuters reports.

* The European Commission is expected to launch thisweek a review of the £22 billion proposed merger between andDeutsche Börse AG inresponse to competition concerns, TheTimes reports.


HSBCseeks release of capital trapped in US: HSBC Holdings Plc plans to release billions of U.S.dollars of capital trapped in the U.S. to boost shareholder returns, insiders tellReuters. Up to half of more than $20 billion of capital in the U.S. can bereturned to the holding company through asset sales. HSBC, however, needs toexecute a plan that would not upset U.S. authorities, who are monitoring thebank over alleged breaches of anti-money laundering rules.

* HSBC hired recruitment firmRussell Reynolds to evaluate the strengths of its high-potential managers,compare them with the best rivals outside the group and look for candidates tofill potential gaps in the management roster, the Financial Times reports. The search is not aimed at looking forsuccessors to CEO Stuart Gulliver, but will aim to ensure a strong group ofmanagers who would be able to take over from Gulliver's successor.  

* The bosses of several U.S. banks and corporations warnedthat they would take preemptive measures of shifting operations from the U.K.unless Prime Minister Theresa May provides early clarity on the future shape ofher country's relations with the EU, The DailyTelegraph reports.The executives issued the warning at a meeting with May in New York last week.

* Some 76% of 100 business leaders surveyed by accountingfirm KPMG said they would consider transferring their headquarters oroperations from Britain, Bloomberg News reports.KPMG U.K. Chairman Simon Collins said the executives were responding to theprevailing uncertainty with contingency planning after the Brexit vote.

* Sentiment in the U.K. financial services sectordeteriorated in the three months to September despite "healthygrowth" in overall business volumes, according to a quarterlysurvey by the Confederation of British Industry and PricewaterhouseCoopers.It marks the third consecutive quarter of worsening optimism about the overallbusiness and the longest period since the depths of the financial crisis inearly 2009. The FinancialTimes and The Daily Telegraph have reports.

* Jonathan Paul, head of Standard Chartered Plc's financial markets unit, isleaving the lender after less than 18 months in the role to pursue otherinterests, IFR reports.

* AvivaPlc named Andrew Wilkinson technical claims director at its U.K.general insurance business, Post reports. 

* A technical glitch hit the U.K. Financial ConductAuthority on Friday, preventing the regulatory from accessing its regulatoryreporting system, the Financial Timeswrites.

* Sharon Donnery, deputy governor at the Central Bank ofIreland, provided the clearest indication so far of the regulator's reluctanceto revise strict rules on mortgage lending, saying the benefit of adjusting therequirements would have to be significant, TheIrish Times reports.

* Allied IrishBanks Plc Chairman Richard Pym said the bank is close to being in aposition to pay a "prudent dividend" to the Irish government, The Irish Times reports.Pym also said the bank's legacy problems are largely solved and that the stateis free to sell its stake in the lender.

* Meanwhile, Irish Finance Minister Michael Noonan saidoptions on the sale of the government's stake in AIB is open as markets arestill volatile and investors are still avoiding bank stocks, Bloomberg News writes.

* PermanentTSB Group Holdings Plc has completed the final stage of its €2.8billion deleveraging program, following the sale of roughly €300 million ofcommercial real estate loans, The IrishTimes writes.


Nostate help for Deutsche Bank: German Chancellor Angela Merkel ruledout possible state assistance for Deutsche Bank AG in the year ahead of national electionsin September 2017, citesa Focus report as saying. The news comes as the U.S. Department ofJustice seeks a $14 billion penalty from Deutsche Bank relating tomortgage-backed securities in the U.S.

* U.S. federal judge William Pauley is opposing a quicksettlement between the U.S. Commodity Futures Trading Commission and DeutscheBank regarding a case over the bank's alleged mishandling of swap reporting,asking the CFTC to justify why a settlement would be fair and in the publicinterest, Reuters reports.

* Some Deutsche Bank customers faced an IT problem thatcaused erratic bookings and wrong account balancers in the online bankingsystem, Handelsblatt writes,noting that it was the second such problem in just a few months.

* CommerzbankAG might cut more than 10,000 jobs, Frankfurter Allgemeine Zeitung reports, while Reuters puts the figure at approximately5,000. The German paper said Commerzbank is facing substantial job cuts if itcombines its medium-sized firm lending division with its investment arm.

* The German state of North Rhine-Westphalia is investigatingwhether large financial institutions such as JPMorgan Chase & Co., , and HSBC were involvedin so-called cum-ex deals, allegedly causing damages of more than €10 billionin tax money, Süddeutsche Zeitung reports.Australia's Macquarie GroupLtd. already voluntarily returned €80 million.

* FördeSparkasse will close five branches by mid-November, Börsen-Zeitungreports.

* JPMorgan banking executives have been discreetlycold-calling Swiss wealth managers in the recent past to offer them commissionsin case they agree to move their clients' money to JPMorgan accounts in theU.S., Sonntagszeitung writes,noting that the U.S. bank would be walking on thin legal ice with the method.

* Sebastian Grigg, a vice chairman of 's investmentbank, is leaving the lender to launch his own advisory firm, Sky News reports.The firm, ESG Corporate Finance, will advise some of the biggest companies inthe U.K. on M&A and capital-raising activities.

* Marcus Schulte, Credit Suisse's head of financialinstitutions debt capital markets business for Europe, the Middle East andAfrica, left the group, IFR reports.Schulte will join DeutschePfandbriefbank AG as senior general manager.

* MediobancaSpA recommended that UniCredit SpA sell subsidiary to improve itsTier 1 capital ratio, Der Standardwrites.


Kerviel ordered to pay SocGen €1M: A French court that former trader JérômeKerviel was "partly responsible" for the bank's losses in 2008 andordered him to pay SocGen €1 million. Kerviel's actions allegedly cost SocGen€4.9 billion and he was initially fined the same amount, but the court foundthat SocGen failed to properly supervise the trader for months. The Frenchfinance ministry could reassess the €2.2 billion tax deduction granted toSocGen in 2009 and 2010 following the ruling, Les Echos writes.

* Frenchauthorities asked Switzerland to provide the identity of French clients holdingmore than 45,000 bank accounts at UBS Group AG as part of a tax investigation, Le Parisien reports.The request concerns accounts associated with current or former UBS clientsbased on data from 2006 to 2008, with assets amounting to over CHF11 billion.

* Caisse desDépôts et Consignations is considering selling hundreds of millionsof euros worth of shares in some of France's largest companies as it aims tomove away from large historical shareholdings, accordingto the Financial Times.

* FormerRabobank ChairmanWout Dekker quashed speculation that the bank will go public in an interviewwith Het Financieele Dagblad. Criticshave suggested that Rabobank was quietly preparing for an IPO, which wouldsolve the problem of coping with increased capital requirements.

* DutchFinance Minister Jeroen Dijsselbloem said the salaries of top executives atstate-owned companies such as ABNAMRO Group NV will no longer be lowered, accordingto Het Financieele Dagblad.Dijsselbloem reportedly said: "Remunerations have already been reduced andthey do not receive bonuses."

*ING Groep NV unitING België NV isexpected to announce significant restructuring plans and layoffs Oct. 3, De Tijd reports.The Belgian bank's 8,500-strong workforce has already been anticipating a majorrestructuring for weeks.

*Belfius Banque SA managementboard Chairman Marc Raisière called on the Belgian government not to sell thestate-owned business, De Tijd reports.Raisière expressed particular opposition to selling Belfius to foreigninvestors, calling the company a "Belgian pearl." 


Portugal probing mismanagement at CGD: Portugal's attorney generalconfirmed that an investigation is being conducted in relation to suspectedmismanagement at Caixa Geral deDepósitos SA, Jornal deNegócios reports.The main focus of the investigation is 2005 to 2010, during which José Sócrateswas prime minister of Portugal, DiárioEconómico and Expressowrite.

* Angolaninvestor Isabel dos Santos has not yet decided whether to sell her stake inBanco BPI SAfollowing CaixaBankSA's bid for the Portuguese lender, Expresso reports.Selling the 18.6% stake could earn Dos Santos some €66 million, the papernotes. Meanwhile, the move to lift a cap on BPI's voting rights and thesubsequent takeover by CaixaBank puts the Portuguese bank in a strongerposition to buy Novo BancoSA, accordingto Dinheiro Vivo.

* Unionleaders representing staff at Caixa Económica Montepio Geral have agreed wage freezesfor three years for employees instead of job cuts, Diário Económico reports.   

* BancoSantander SA unit Santander Consumer USA Inc.'s financial statements for2013, 2014, 2015 and the first quarter of 2016 could no longer be relied upondue to accounting errors, the FinancialTimes reports.The company said it had changed its method of accounting for certain discountedloans and credit losses allowances.


Popolaredi Vicenza to study Veneto Banca merger: Banca Popolare di Vicenza SpA Chairman Gianni Mion saidthe lender will look into a possible merger with , according to La Repubblica. Meanwhile, fundmanagement group Sixiang Holding and U.S. hedge fund York Capital are forming aconsortium to acquire Veneto Banca, IlMessaggero writes.

* UniCredit selected Amundi SA, a consortium led by , and as the four possible candidates tobuy asset management unit Pioneer, insiders tellReuters. UniCredit gave the four parties access to Pioneer's financial dataahead of an expected sale later in 2016.  

* Negotiations with the EU to seek state aid for could be less challenging than a few months ago, thanks to theconversion of subordinated bonds that could be seen as a form of burdensharing, according to Milano Finanza. Separately, a restrictedgroup of investors tied to the Qatari government could take up about €1 billionof the capital increase that the lender is expected to launch next year, Corriere della Sera reports.

* Banca CarigeSpA is expected to sell €900 million in nonperforming loans withthe GACS state guarantee mechanism by the end of the year, Milano Finanza reports.

* The Interbank Deposit Protection Fund fully subscribed toCassa di Risparmio di CesenaSpA's €280 million capital increase, becoming the bank's majorshareholder with a 95.3% stake, Il Sole24 Ore writes. 

* The IMF called on the eurozone to take a bolder action toease Greece's debt burden, the FinancialTimes reports.The fund noted that existing plans do not go nearly far enough to address thecountry's problems.

* Auditors at the Greek central bank identified a number ofissues at Attica BankSA, particularly irregularities relating to the lender'sadministration, credit risk management and computerized system processes, Imerisia reports.The auditors discovered, among others, that Attica Bank had an inadequatesystem for calculating nonperforming exposures and was thus unable to make anyprovisions with regard to some €72 million in NPEs.


SEB, Swedbank could seek Baltic deals: Skandinaviska Enskilda Banken AB and may look for acquisitionopportunities in Estonia, Latvia and Lithuania after DNB ASA and Nordea Bank AB agreed to merge their Baltic operations, Dagens Industri writes. TheNordea-DNB deal caused SEB to consider its own long-term strategy in theregion.

* DNBthreatened to close Bitcoinforening's account with the bank unless theNorwegian bitcoin association provided proof that funds in its account have noconnection to terrorism or money laundering, reports.In response, Bitcoinforening said it intends to move its funds to a more"bitcoin-friendly" bank.  

* TheDanish FSA concluded that Nordea has managed to significantly reduce accounttransfer or switch times, Børsen reports.Nordea customers had previously waited up to three months before their accountswere fully moved to another bank, but Nordea's compliance means accounttransfers now take up to only 12 days.  


Fitch upgradesSlovenia, Moody's downgrades Turkey: Fitch Ratings upgraded Slovenia'slong-term foreign- and local-currency issuer default ratings to A- from BBB+.The rating agency noted that the Slovenian banking sector's health has improvedmarkedly following government interventions and restructuring.

* Moody's downgraded Turkey's long-term issuer and seniorunsecured bond ratings by one notch to "Ba1" with a stable outlook,the Financial Times reports.The country's downgrade to junk status was attributed to an increase in therisks related to its sizable external funding requirements, among other factors.

* Works on theplanned merger of Commercial BankUniastrum Bank (LLC) and PJSC Orient Express Bank have been suspended due toissues regarding the quality of assets in both banks and doubts over synergiesstemming from the potential merger, Kommersantreports. The lenders'shareholders have also not yet reached an agreement on the ownership structureof the merged bank.

* TheRussian central bank is readyto provide an additional 28 billion Russian ruble loan for a period of 12 yearsto finance the recovery program of National Bank TRUST PJSC, Vedomosti reports.Analysts believe the amount would not be sufficient as the bank needs around 60billion rubles in additional funding.

* PAOPromsvyazbank and JSCRussian Bank for Small & Medium Enterprises Support completed a securitizationdeal backed by loans issued to small and mid-sized businesses, the firsttransaction of its type in Russia.

* ThePeople's Bank of China authorized Bank ICBC Moscow to become a Chinese yuanclearing bank in Russia, accordingto the Russian central bank.  


Asia-Pacific:Pakistan keeps policy ratesteady; Goldman Sachs cuts jobs in Asia

Middle East& Africa:Algeria's privatization push; Ghana's M&A drive


: Iceland's third-largest bank is looking tosell bonds over the next 12 months and hopes to benefit from an easing ofcapital controls.

: Worries are growing about CréditMutuel Arkéa's funding costs and operating license, as the likelihood of asplit from French mutual bank Crédit Mutuel Group increases.

: CEO Xavier Durand said the Frenchexport-credit insurer will move away from "growing for the sake ofgrowing." 

Leo Magno, Arno Maierbrugger, Meike Wijers, GerardO'Dwyer, Beata Fojcik, Thanasis Kakalis, AliKayalar, Yael Schrage, Stephanie Salti, Praxilla Trabattoniand Helen Popper contributed tothis report.

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