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Danske's overcharging case; Julius Bär to keep Kairos; HSBC targets UK mortgages

The Daily Dose LIVE returns to the City of London on Tuesday, Oct. 1. Join us for a timely panel discussion on the vulnerabilities facing the banking sector and other parts of corporate Europe in a period of deep political, policy and economic uncertainty. Register today to secure your place at this popular breakfast event.

UK AND IRELAND

* U.K. lawmakers against a no-deal Brexit plan to pass a law that would thwart Prime Minister Boris Johnson's intention to take the U.K. out of the EU with or without a divorce agreement Oct. 31, Keir Starmer, the Labour Party's shadow Brexit secretary, told BBC News. Starmer said ensuring a no-deal Brexit won't take place will require an extension of the Brexit deadline.

* U.K. Chancellor Sajid Javid will meet today with 20 of the most prominent bosses in the City of London in a bid to persuade more financial services companies that a no-deal Brexit would give more opportunities to the sector, unnamed sources told Sky News. The meeting would reportedly be attended by Barclays PLC CEO Jes Staley, London Stock Exchange Group PLC CEO David Schwimmer and Royal Bank of Scotland Group PLC Chairman Howard Davies, among others.

* The earnings of British banks could take a hit by as much as 25% in the event of a no-deal Brexit, Bloomberg News wrote, citing an analysis by Citigroup Inc. High street lenders could also take a hit in their revenues due to slow economic growth and low interest rates. However, a no-deal Brexit scenario would not necessarily drag the share price of U.K.-focused banks, analysts said.

* U.K. equity funds have seen outflows of about $4.2 billion since May as the possibility of a no-deal Brexit grows, the Financial Times reported, citing data provider EPFR. Since the 2016 Brexit referendum, outflows have totaled $29.7 billion.

* HSBC UK Bank PLC plans to offer mortgage loans totaling £35 billion as it seeks to increase its market share to 10% from 7%, CEO Ian Stuart told the Financial Times. However, Stuart did not state a time frame for the plan.

* Edward Bramson's Sherborne Investors, whose sole investment is in Barclays PLC, could face its own activist investor after Hong Kong-based Oasis Management (Hong Kong) LLC bought a stake of more than 3% in the company, according to The Sunday Times. The move could purportedly be Oasis' way to gain exposure to Barclays for a cheaper price since Sherborne's shares are trading 23% lower. Bramson, through Sherborne, holds a 5.5% stake in Barclays and had sought to be elected as a board member to shake up its investment bank but failed.

* British banking startup Revolut Ltd. will hire 400 staff at a new base Porto, Portugal, marking a £4 million investment aimed at boosting customer service and compliance, Jornal de Negocios and the Financial Times reported. The fintech company, which has attracted more than 6 million users since its launch in 2015, has drawn criticism recently over the quality of its compliance operations and its response to customer complaints.

* Hargreaves Lansdown PLC has removed Burford Capital Ltd. from its funds following an attack on the litigation finance firm by U.S. hedge fund Muddy Waters LLC over its accounting practices, City A.M. wrote.

* Germany is brewing plans to sell Ireland-headquartered Depfa Bank PLC, aiming to hire advisers for a deal as soon as next month, the Irish Independent wrote, citing Bloomberg. German bad bank FMS Wertmanagement AöR is reportedly looking to find a buyer in 2020.

GERMANY, SWITZERLAND AND AUSTRIA

* Swiss Economy Minister Guy Parmelin told German newspaper SonntagsZeitung that Switzerland and the EU are unlikely to reach a partnership treaty this year since labor, employer and canton representatives are unable to find common ground to use in the discussions, Reuters reported. If an agreement is struck, it would not come until next year at the earliest, Parmelin added.

* Zurich-based Julius Bär Gruppe AG decided to retain its Italian asset and wealth management arm Kairos Partners SGR SpA, concluding a strategic review of the unit. Julius Bär said it would now closely align its business with that of Kairos' serving Italy-based clients.

* Uniqa Insurance Group AG reported first-half net profit attributable to the shareholders of the company of €105.6 million, down from €112.3 million a year ago. The Vienna-based company said it expects lower investment income in 2019 due to the nonrecurring effect from the sale of Casinos Austria Aktiengesellschaft in 2018.

* Deutsche Bank AG is weighing the closure of some 200 branches as it seeks ways to cut costs in its private customer business and at its Deutsche Postbank AG unit, insiders told WirtschaftsWoche. The bank is aiming to cut private customer costs by €1.4 billion annually by 2022. The lender, which has not yet made a decision on the possible move, said it is reviewing a number of additional measures to reach goals set for 2022 more quickly.

* Landesbank Baden-Württemberg, traditionally one the most important lenders for Germany's automotive industry, is looking to cautiously reduce its portfolio in the sector while aiming for stronger growth in more stable industries, Handelsblatt reported. Loans to the local car industry have accounted for up to 15.5% of all corporate lending for LBBW, but in the first half of the year, that share shrank for the first time in years. UniCredit Bank AG is likewise reducing its activities in the sector.

* Cooperative lender Frankfurter Volksbank eG and public bank Taunus Sparkasse are set to jointly operate branches in the state of Hesse in an effort to cut costs, Spiegel reported. The plan will affect about 50 branches, an insider told Handelsblatt. The banks will invest €5 million in redesigning the offices and each is expected to see annual savings in the singe-digit millions.

FRANCE AND BENELUX

* France-based Lyxor Asset Management SAS has seen outflows of about $7.3 billion from its exchange-traded funds business following speculation it could be sold by its parent, Société Générale SA, the Financial Times reported, citing Arnaud Llinas, head of Lyxor's ETF arm. However, Llinas said the outflows from the $67.8 billion business were due to broader retreat from European stock markets.

SPAIN AND PORTUGAL

* The trial against a number of former Bankia SA top managers accused of fraud over the lender's ill-fated 2011 public listing is slated to resume today. More than 300,000 retail shareholders were affected by the IPO and subsequent bailout of the nationalized lender, Expansión reported.

* Portugal's government gave Novo Banco SA the go-ahead to accelerate job cuts as part of its restructuring, allowing the state-rescued lender to make more than 300 staff redundant by mutual agreement by 2021, Jornal de Negocios reported, citing Expresso. Normally, a company the size of Novo Banco is only allowed to make 80 staff redundant every three years under Portuguese law.

ITALY AND GREECE

* Greece's Piraeus Bank SA posted second-quarter group profit attributable to equity holders of the bank from continuing operations of €20 million, down from the restated €24 million a year ago. Meanwhile, Eurobank Ergasias SA's net profit in the second quarter rose year over year to €6 million from €1 million despite booking higher loan loss provisions and restructuring costs.

* illimity Bank SpA has established closed-end fund management company Illimity Sgr, Milano Finanza reported.

* The commissioners appointed to run Banca Carige SpA warned shareholders that without a €700 million capital increase, the bank could end up facing an irreversible crisis that would see its liquidation with a total loss of value, Il Sole 24 Ore and Corriere della Sera reported. Meanwhile, Carige said it expects the rescue plan to steer it to profit by 2021, adding that it received a binding offer from state-owned vehicle Società Gestioni Attivi to purchase €3 billion of its soured loans, Reuters reported. For the first half, Carige's losses totaled €428.5 million.

* Salvatore Rossi, former director general of the Bank of Italy and Dario Scannapieco, vice president of the EIB, are in pole position to become economy minister in the second government headed by Giuseppe Conte, Il Messaggero wrote.

NORDIC COUNTRIES

* The Danish Financial Supervisory Authority has referred Danske Bank A/S to the police for overcharging customers of its Flexinvest Fri investment product, saying the incidents are in "breach of the consumer protection rules," Reuters reported. Meanwhile, Danske CEO Chris Vogelzang said the bank is aware of the regulator's decision and is taking steps to review its products. The bank added that overcharged customers will be compensated before 2019-end.

* Denmark's 3C Group is planning to launch an online bank, dubbed Facit Bank, after obtaining a banking license, Berlingske Business reported.

* Several Danish banks, including Nykredit A/S, Arbejdernes Landsbank A/S and Spar Nord Bank A/S, have accidentally leaked customers' addresses due to an IT error, according to Finans. The mistake happened in connection with transfers between accounts, and IT company BEC said that it has corrected the error.

* The Swedish government plans to help fund increases in defense spending from 2022 by implementing a bank tax, to be imposed on all lenders with operations in the country regardless of where their main headquarters are located. Finance Minister Magdalena Andersson said the levy could bring in 5 billion kronor in additional funding annually.

* EQT Partners AB announced plans to launch an IPO on Nasdaq Stockholm, in which it seeks to raise at least €500 million by selling roughly 20% of its total shares, including the newly issued shares and the sale by existing shareholders.

* Nordea Asset Management has put on hold its purchases of Brazil's sovereign debt due to the forest fires in the Amazon, Reuters reported, citing Thede Ruest, head of Nordea Bank Abp's emerging markets debt. The bank's current exposure to Brazil's government bonds amounts to roughly €100 million.

EASTERN EUROPE

* The Russian central bank's digital financial marketplace is due to be launched early next year after the relevant legislation is passed next month. The platform will enable partner banks to provide services distantly, Banki.ru reported.

* The Russian central bank has decided to merge ZAO Volga -Oksky Commercial Bank with PAO Moscow Industrial Bank, both acquired earlier this year, to foster the development of the latter's regional network, Banki.ru wrote.

* Interregional Bank for Settlements of the Telecommunications & Postal Services, or Sviaz-Bank, has transferred assets worth 24.3 billion Russia rubles to State Development Corp. VEB.RF, including five subsidiary mutual funds, while VEB made a 12.8-billion-ruble contribution to the former's assets, Banki.ru noted.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Bank of Jinzhou's FY'18 net loss; Dewan Housing Finance proposes resolution plan

Middle East & Africa: AUB completes due diligence on takeover bid; Lebanese bank denies US allegations

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

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Banks make £45B PPI provision but drag on earnings is over: S&P Global Ratings: Deadline for PPI claims has now passed and banks' future earnings should reflect that even though tailwinds from mis-selling scandal will continue to blow till fourth quarter, said the ratings agency.

Bank of China's Greek branch plan is a vote of confidence in the economy: China's fourth-largest lender plans to open a branch in Greece, which is a reflection of improving economic conditions in the country, industry insiders say, though they warn that announcements by Chinese banks do not always translate into action.

Deza Mones, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Roman Savinov, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper 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.