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Wirecard audit; Citi's confidence in London; Munich Re set to beat €2.5B target


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Wirecard audit; Citi's confidence in London; Munich Re set to beat €2.5B target

* U.K. Prime Minister Boris Johnson on Saturday sent a letter to the European Union requesting an extension to the Oct. 31 Brexit deadline, after parliament voted in favor of an amendment that withholds approval of Johnson's Brexit deal until the legislation to implement it has been passed. Sources told The Sunday Times that the EU is poised to grant an extension. Johnson did not sign the letter and followed it with another one saying he believes a delay would be a mistake. He is pushing for a straight "yes" or "no" vote on the deal today, BBC News reported.

* ECB President Mario Draghi warned about the risk of a financial bubble in the eurozone amid "mild signs" of overvaluation in the financial and real estate sectors. He said "the financial stability environment remains challenging, as the global economic outlook has deteriorated."


* London would still be Europe's main financial hub no matter the outcome of Brexit due to its timezone, regulations and "support mechanisms," David Livingstone, Citigroup Inc.'s new European head, told the Financial Times. Livingstone also said although the U.S. lender would incur additional costs due to Brexit, these would be "manageable" and not a "material item dilutive to overall returns."

* Bank of England Governor Mark Carney said an orderly departure by the U.K. from the EU does not necessarily mean that the central bank would resume lifting interest rates. Carney said the BoE would react in a "normal time frame" if no deal is reached, adding that policymakers are not divided on the overall strategy for a no-deal Brexit.

* The U.K. Competition and Markets Authority ordered Nationwide Building Society to refund up to £2 million to payment protection insurance customers after the lender failed to send reminders, or sent inaccurate information. The regulator said Nationwide has already repaid over £100,000.

* Britain's Serious Fraud Office closed its years-long investigation into the alleged rigging of the London interbank offered rate, noting that there will be no additional charges in the case. The closure of the probe comes despite evidence implicating the Bank of England, BBC News noted.

* Standard Chartered PLC CEO Bill Winters could take a pay cut as the U.K.-based lender seeks to end investor unrest over his remuneration, insiders told the Financial Times. Winters is reportedly set to make an announcement later this year, or in early 2020.

* Les Matheson is planning to resign as Royal Bank of Scotland Group PLC's CEO for personal banking in the coming months, according to Sky News. His resignation would likely be announced as part of a senior management shakeup under the group's new CEO, Alison Rose.

* Link Fund Solutions, the firm oversaw the suspension and eventual liquidation of Neil Woodford's flagship fund, had been planning the windup for more than three months, according to The Sunday Times. Link reportedly tapped asset manager BlackRock to liquidate Woodford holdings in July. This may draw anger from the industry since Woodford charged fees totaling £8 million since the fund was suspended in June. Insiders also said the U.K. Financial Conduct Authority had pressured Link to shut down the fund, a claim the FCA refuted, City A.M. wrote.

* U.K.-based Metro Bank PLC is debating whether to extend the £10,000 monthly allowance it gives chairman Vernon Hill until March 2020, when his contract officially terminates, or cutting it all together when he steps down in December, The Telegraph reported.


* Payment service provider Wirecard AG tapped KPMG to carry out an additional independent audit in response to reports by the Financial Times suggesting that it allegedly tried to inflate its reported sales and profits. The firm's chairman, Wulf Matthi, had previously rejected calls for an independent review despite a declining share price.

* Meanwhile Wirecard announced a share buyback program that will start in the coming days. Over a period of 12 months, shares worth up to €200 million will be bought back, the company said.

* German insurer Munich Re Co. expects a third-quarter consolidated result of approximately €850 million, despite higher expenses, on the back of "good operational performance, strong currency gains and a very good investment result." The firm also expects to exceed its consolidated result target of €2.5 billion for 2019. Munich Re will release its third-quarter results Nov. 7.

* The head of Germany's private banking association is in favor of a state-backed digital currency, and wants to prevent Facebook from launching its Libra digital currency, Der Standard reported, citing Reuters. He said Libra would involve "enormous risks."

* Nuremberg-based UmweltBank AG wants to offer checking accounts and other retail banking services with the aim of more than doubling customer numbers to 250,000 by 2026, board spokesman Jürgen Koppmann told Börsen-Zeitung.

* BAWAG PSK plans to buy back own shares with a total value of up to €400 million after the ECB gave the green light for the program.


* Belgian state-owned bank Belfius Banque SA plans to close one-sixth of its wholly owned branches in Flanders, leading to 35 job losses, De Tijd reported, citing anonymous trade union sources.

* Netherlands-based ABN AMRO Bank NV susbdidiary International Card Services is taking a closer look at three million account holders as part of tighter rules on money laundering and terrorism finance, Het Financieele Dagblad reported, citing a report by De Volkskrant.

* Matthieu Pigasse, head of France for Lazard Ltd. and co-owner of Le Monde newspaper, resigned from the financial advisory and asset management company and will leave Oct. 31, L'Agefi and Les Echos wrote. He said he would be starting its own venture.

* French banks will likely accelerate their disposal of problem loans due to new regulations, according to a study by Deloitte, Reuters reported. Although their balance sheets are healthier than those of their European peers, French banks sit on the second-largest stock of nonperforming loans in the continent, the report noted.


* Spain's Banco Santander SA is preparing to establish an online deposit platform in the U.S. over the next year to attract cheaper funding for its consumer business, Scott Powell, the bank's CEO in the U.S., told the Financial Times. The platform would not offer loans, but in the long term Santander plans to bring its full-service digital bank, Open Bank, to the U.S.

* Pedro Gouveira, nonexecutive administrator of Caixa Económica Montepio Geral Caixa Económica Bancária SA and president of Montepio Crédito, has been appointed CEO of Banco Montepio, subject to regulatory approval, Jornal de Negócios reported.


* The ECB blocked Banca Popolare di Sondrio SCpA's planned acquisition of Cassa di Risparmio di Cento SpA, explaining that the bank should now concentrate on derisking, wrote Milano Finanza.

* Alessandro Mazzucco, chairman of Fondazione Cariverona, UniCredit SpA's largest Italian shareholder, urged the bank to take extraordinary steps to lift its declining share price, Reuters reported. UniCredit is set to unveil a new business plan in early December.


* Russia's AO Gazprombank plans to open 100 new branches in 2020 in various cities across the country, including Moscow, reported. The bank has about 400 outlets in Russia.

* VTB Bank PJSC plans to meet its 200 billion Russian ruble net profit target for 2019 by reflecting proceeds from the sale of its stake in Russian telecommunication company Tele2 in this year's earnings, Vedomosti reported, citing VTB Bank CFO Dmitry Pianov. The sale of the Tele2 stake to Rostelecom is expected to take place in 2020.

* The Russian finance ministry plans to provide a 160 billion Russian ruble capital boost to State Development Corp. VEB.RF in 2019, news agency Prime wrote, citing Finance Minister Anton Siluanov. The funds will come from resources earmarked for VEB in Russia's budget for 2020 and 2021.

* Russia's Federal Antimonopoly Service allowed Freedom Holding Corp. to acquire 100% of Russian brokerage firm Zerich Capital Management, news agency Prime said. Freedom Holding Corp. CEO Timur Turlov said in September the company was considering the possibility of buying Zerich Capital Management but noted that a purchase agreement had not yet been signed.

* Polish Finance Minister Jerzy Kwieciński suggested that the country's state-run financial institutions should consider the potential purchase of mBank SA from its German parent Commerzbank AG, Reuters reported.


Asia-Pacific: China opens dual-class stocks to onshore buyers; Australian superfunds debut JV

Middle East & Africa: Egypt inks deal with Euroclear; Lebanon agrees on economic reforms

Latin America: Banco do Brasil share offering raises 5.8B reais; HSBC Argentina CEO resigning

North America: American Express Q3 EPS up YOY; Wells Fargo settles race, gender bias labor case


Banks look to tech to help close $1.4T-$1.6T trade finance gap: As the main providers of global trade finance, banks are looking for ways to reduce up to $1.6 trillion of unmet funding demand, most of which comes from small businesses in emerging markets. New technology solutions could help.

LSE bets on extension of deal allowing EU access to UK derivatives clearing: CEO David Schwimmer expects the present temporary deal to be extended by EU authorities but thinks certainty will only come after Oct. 31, while also announcing that the Refinitiv deal is on track.

Ben Meggeson, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stephanie Salti, Sophie Davies and Mariana Aldano contributed to this report.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.