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Deutsche Bank in spotlight; UK FCA proposes widening taping regime under MiFID II

S&P Global MarketIntelligence offers our top picks of banking news stories and more publishedthroughout the week.

Deutsche Bank's woesmount

* The German government is said to be secretly working on arescue for Deutsche Bank AGin case the U.S. Department of Justice does insist on receiving the full$14 billion it demanded to settle civil claims over allegedly missold MBS. Theplan, denied by the government and dismissed by Deutsche itself, wouldreportedly permit asset sales at favorable prices and, in an extreme case,allow for the state to take a 25% share. German Chancellor Angela Merkel hasruled out any kind ofgovernment support for the lender.

* Around 10 of Deutsche Bank's derivatives-clearing clients,including Millennium Partners, Capula Investment Management and Rokos CapitalManagement, movedpart of their listed derivatives holdings to other firms, Bloomberg Newsreported.

* Analysts at Mediobanca, meanwhile, Deutsche Bank may have to carry outa rights issue as it heads for a capital hole of between €4 billion and €5billion in 2018. The bank, which faces other potential litigation charges, isexpected to come up short of an ECB supervisory review and evaluation processtarget of a fully loaded common equity Tier 1 ratio of 12.25% by January 2019.

Regulatory proposals

* The U.K. Financial Conduct Authority and the Bank ofEngland's Prudential Regulation Authority proposed the conduct rules to allnonexecutive directors of banks and insurers. In addition, the FCA will consulton how those heading up the legal function in firms should be treated under itsSenior Managers' and Certification Regime.

* In its third consultation paper on the implementation ofthe revised Markets in Financial Instruments Directive II, the U.K. FCAproposed to apply thetaping regime to a wider range of activities to include portfolio managementservices and corporate finance business. This would help deter individuals frompotentially committing market abuse, the FCA noted.

Litigation matters

* Royal Bankof Scotland Group Plc reached an agreement with the U.S. NationalCredit Union Administration to pay $1.1 billion to resolve two outstanding civil lawsuitsclaiming that it missold RMBS to now-defunct U.S. Central Federal Credit Unionand Western Corporate Federal Credit Union in the run-up to the 2008 financialcrisis. The bank said the settlement is "substantially covered" byexisting provisions as of June 30, and will have no material impact on thegroup's common equity Tier 1 ratio.

* The U.S. Department of Justice to reach settlements in ongoingmortgage-securities misselling cases with Barclays Plc, Credit Suisse Group AG and Deutsche Bank before the U.S.presidential election in November, the FinancialTimes reported. Striking deals simultaneously with all three of theEuropean banks could take the spotlight off Deutsche Bank.

* StandardChartered Plc is facing an investigation by the DOJ over allegations of possiblebribery and misconduct at an Indonesian power plant builder the lender controls.

M&A talk

* Deutsche Bank AG agreed to its U.K.-based Abbey Life businessto Phoenix GroupHoldings unit PhoenixLife Holdings Ltd. for £935 million in cash.

* Standard Chartered is said to be close to a management buyoutproposal for its principal finance division, a move that would mark thelender's exit from the private equity market.Standard Chartered Private Equity is housed within the principal finance unit.

* CommerzbankAG and U.S. private equity firm Apollo Global Management LLC reportedly submittednonbinding offers forAllianz Group unitOldenburgische LandesbankAG.

* CaixaBankSA's officials reportedly told investors that once the Spanish lender takes overBanco BPI SA, itwould move to oppose an acquisition of Novo Banco SA.

Over in Italy

* Italy will hold a referendum on Prime Minister Matteo Renzi's proposedconstitutional reforms Dec. 4.

* Banca Montedei Paschi di Siena SpA's board is launching a voluntary debt-for-equityexchange offer as part of its €5 billion recapitalization plan.

* UniCreditSpA reportedly intends to raise up to €16 billion through a share issue and the saleof assets. The bank is looking to keep the size of any capital increase tobetween €5 billion and €6 billion and assets likely to be sold off includeUniCredit's 55.4% stake in online lender FinecoBank SpA; its 40% stake in ; and its assetmanagement business, PioneerGlobal Asset Management SpA.

Belt-tightening

* CreditSuisse Group AG CEO Tidjane Thiam said the bank is looking foradditional cost-savingmeasures at its global markets division, noting that the unit willbe able to achieve its 2016 objective of reducing operating costs by CHF6billion.

* Commerzbank will cut 7,300 net jobs, cancel its dividend "for thetime being" and target a 6% return on tangible equity by 2020 under its"Commerzbank 4.0" strategy. The restructuring process will cost thelender €1.1 billion.

* ING GroepNV CEO Ralph Hamers is preparing for a major reorganization of the bank, whichwill involve thousands of job cuts to save billions of euros globally, Het Financieele Dagblad reported. ING'sBelgian unit, ING BelgiëNV, may be merged with unit Record Bank SA, L'Echoreported.

In other news

* HSBCHoldings Plc is reportedly looking to billions of dollars in capitalit has tied up in the U.S. without upsetting regulators. Analysts and investorssay up to $10 billion in capital could be returned to the parent company by wayof asset sales.

* RBS outlined a sweeping overhaul of its current structure and businessmodel to comply with ring-fencing legislation set to take effect Jan. 1, 2019.

* BancoSantander SA reduced its return on tangible equity 2018 target to11%, against its objective set in 2015 of approximately 13%. The bank alsoadjusted its cost-to-income ratio target to a range of between 45% and 47%,compared to less than 45% previously.

Featuredduring the week on S&P Global Market Intelligence

* : Many of the world's biggest, mostimportant banks have lower capital ratios than smaller lenders. Some regulatorsfear it is still too early to say that the problem of "too big tofail" has been solved.

* : The banking industry lags other sectors in thefight against hackers, as lenders are too fiercely secretive to share crucialinformation about breaches, experts have warned.

* UBS CEO:Banks need artificial intelligence to replace staff, cut costs:Technology that enables computers to acquire knowledge themselves can helpsolve the problem of diminishing profits in the banking sector, Sergio Ermottitold the Sibos conference in Geneva.