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EC clears Novo Banco sale; BAWAG IPO price range set; France probes Danske Bank

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


EC clears Novo Banco sale; BAWAG IPO price range set; France probes Danske Bank

* The European Commission has unveiled a watered-down set of proposals aimed at safeguarding EU banks against another financial crisis, Reuters reported. The proposals are designed to reduce the sharing of banking risks among EU states and establishes conditions that countries must meet before their respective banks are allowed to tap safety nets funded at the EU level. The commission also set out new measures aimed at addressing banks' existing stock of nonperforming loans and preventing future buildup of bad loans, to be adopted in the spring of 2018.

* UniCredit SpA, Société Générale SA, Deutsche Bank AG, Barclays Plc and Standard Chartered Plc are among nine global systemically important banks that are projected "to generate below-sustainable returns in 2019," according to the IMF's October report on global financial stability. The fund attributes the miss to "high operating costs, low operating efficiency and highly competitive home markets, exacerbated in several cases by weak information technology systems."

* Germany's finance ministry rejected proposals by the European Commission to restart talks on a European Deposit Insurance Scheme, saying it will not take part in talks until EU banks have made a "substantial" reduction of risks, the Financial Times reported.

* Meanwhile, the German finance ministry urged the EU to allow its member states to offer U.K. financial services firms transitional market access on a reciprocal basis, Bloomberg News reported. Germany's calls suggest that the country wants to keep its doors open to U.K. banks amid the slow progress of Brexit talks between Britain and the EU.

* Andreas Dombret, a board member at the German central bank, confirmed reports that global banking regulators are close to reaching a deal on Basel III reforms, Reuters wrote.

* Bank of America Corp. signed a lease for office space in Paris, setting in motion plans to move to the French capital after the U.K. leaves the EU, insiders told Bloomberg News.

* U.S. peer Citigroup Inc. is to establish a new booking center for its private bank in Luxembourg to allow it to continue managing the accounts of its European clients in the event of a hard Brexit, the Financial Times reported.

UK AND IRELAND

* Chancellor Philip Hammond said Britain acknowledges the EU's need to share oversight of clearinghouses and other financial services matters if it is to allow the lucrative business to continue operating in London post-Brexit, Bloomberg News wrote. Speaking to the Treasury Committee, Hammond stressed the need for some kind of "enhanced equivalence" that is in line with international standards and broader than the equivalence that the bloc currently offers to U.S. firms.

* Hammond also echoed calls by banks to speed up the progress of Brexit negotiations, saying that allowing talks to drag into next year would significantly lower the value of a transitional deal, Reuters wrote.

* Politicians and new lenders are criticizing the grant policy of Royal Bank of Scotland Group Plc's £425 million challenger bank fund as one of its potential beneficiaries could be Santander UK Plc, which is already one of Europe's biggest banks, The Times reported. Under the fund's eligibility criteria, applicants must have assets of less than £350 billion in the U.K., sparking speculation that the bar was set to allow Santander, which has £300 billion in assets, to apply. U.K. Treasury Select Committee Chair Nicky Morgan said the committee will keep a close eye on an independent body that will be created to review grant applications next year.

* Hargreaves Lansdown Plc's assets under administration stood at £82.0 billion at the end of September, up 4% from £79.2 billion at the end of June.

GERMANY, SWITZERLAND AND AUSTRIA

* BAWAG PSK's institutional shareholders will sell up to 40.25 million ordinary shares in an IPO of the Austrian lender at between €47 per share and €52 per share. If the entire shares are sold at the top end of the price range, it would value the stake at €2.09 billion and the entirety of the lender at €5.2 billion. BAWAG also said it will cease its cooperation with Österreichische Post AG.

* Allianz Group named Carsten Quitter chief investment officer, replacing Andreas Gruber, who is retiring after working with the insurer for 29 years. Fabiana Rossaro will succeed Quitter as chief investment officer for Italian unit Allianz SpA.

* German financial regulator Bafin said it will thoroughly scrutinize the planned sale of up to 6 million life insurance policies by large insurance companies such as ERGO Group AG and Generali Deutschland AG to financial investor-backed firms such as Viridium Group GmbH & Co. KG or Frankfurter Lebensversicherung AG, Handelsblatt reported.

* Element, a fully digital insurance provider offering property and casualty insurance in the B2B sector, has received a license from Bafin, Handelsblatt noted.

FRANCE AND BENELUX

* BNP Paribas SA said it would no longer do business with firms whose primary activity involves oil and gas from shale and/or oil from tar sands as part of its efforts to help combat climate change. Pressure from environmental nongovernment organizations is growing on Crédit Agricole SA, Société Générale SA and Natixis to follow BNP Paribas, according to La Tribune.

* The CEO of Crédit Industriel & Commerial and deputy CEO of CM-11 group, Daniel Baal, told Les Echos that CIC was not a candidate to buy Germany-based Commerzbank AG, as he set out a strategy of diversification for CIC.

* Banque Fédérative Crédit Mutuel SA sold all its shares in Safran and Eiffage for about €520 million, Le Figaro reported. La Tribune also covered.

* European Commission inspectors were sent to Dutch and Polish banks suspected of not passing on information to registered fintech companies, in a move which could result in the banks risking fines for anticompetitive behavior, Les Echos reported.

* Outgoing Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem will be leaving politics, Het Financieele Dagblad reported. Dijsselbloem plans to vacate his parliamentary seat after seven years on Oct. 25, the day before the new Dutch cabinet will be presented.

SPAIN AND PORTUGAL

* Spanish Prime Minister Mariano Rajoy told parliament that the Catalan government has until Monday to respond as to whether it declared independence from Spain, Reuters reported. If the Catalan government confirms its declaration of independence, it would be given three more days, or until Oct. 19, to rectify it, while failure to do so could push Rajoy to trigger Article 155 of the Spanish Constitution and take control of Catalonia, an autonomous region.

* Bankia SA is considering a quick sale of the real estate portfolio of Banco Mare Nostrum SA, a smaller lender that it is acquiring, insiders told Cinco Días. The lender is reportedly planning to sell the assets to an opportunistic fund and has already been in touch with consultants and investment banks over a potential transaction.

* The European Commission approved under EU state aid rules Portuguese aid for the sale of Novo Banco SA, saying the measures will allow its new owner, U.S. private equity firm Lone Star Funds, to carry out its restructuring plan, which the commission said will ensure the bank's long-term viability while limiting distortions to competition. Observador and Economia Online have reports.

* Former Portuguese Prime Minister José Sócrates was formally charged with money laundering, falsifying documents, tax fraud and bribery in a wide-ranging corruption investigation that links former senior figures with banking and corporate elites, the Financial Times reported.

ITALY AND GREECE

* Tobias Adrian, monetary and capital markets director at the IMF, said the fund expects Italian banks to dispose of €65 billion in nonperforming loans in 2017, Reuters reported.

* Nonbinding offers for a €2 billion Banco BPM SpA unsecured nonperforming loan portfolio are due at the end of the month while Banca Nazionale del Lavoro SpA has just initiated the sales process for a €1 billion unsecured NPL portfolio, MF said.

NORDIC COUNTRIES

* Danske Bank A/S said it is being investigated by the French Tribunal de Grande Instance de Paris over suspected money laundering by clients of its Estonia branch from 2008 to 2011. The lender said the transactions in question are included in its ongoing investigation into its Estonian branch and stressed its commitment to cooperate with the French probe. Berlingske Business covered.

* Nordea Bank AB (publ) said it will begin offering DNB ASA's widely used Vipps payments app to its customers in Norway, while Danske Bank said it will no longer offer its Mobilepay app to its Norwegian customers and will instead seek a distribution deal with DNB, Reuters reported.

* Swedish savings bank Swedbank Sjuhärad AB (publ) will change its name to Sparbanken Sjuhärad, Realtid reported. The bank, in which Swedbank AB (publ) holds a 47.5% stake, said the name change was meant to avoid being confused with Swedbank.

EASTERN EUROPE

* Russian financial authorities agreed to regulate the cryptocurrency market, with a framework legislative proposal to be developed by the end of 2017, Kommersant reported, citing Russian Finance Minister Anton Siluanov. Reuters also has a report.

* The Russian central bank's deputy head, Vasily Pozdyshev, estimated that the financial recovery process of Otkritie Financial Corp. Bank and B&N Bank will require between 800 billion Russian rubles and 820 billion rubles, Reuters reported after news agency RIA. The official also did not rule out further bailouts in the local banking sector.

* PJSC Sovcombank purchased 9.16% shares of JSCB RosEvroBank (JSC), increasing its holding in the lender to 29%. Vedomosti estimated the value of the transaction at around 3 billion Russian rubles.

* The Russian central bank prepared a package of legislative proposals that will enable the introduction of a financial recovery mechanism for insurance companies through the regulator's insurance sector consolidation fund, Kommersant reported. The proposed mechanism is similar to that used to finance the recovery of troubled banks.

* Bank RBK JSC is working on a measures to strengthen the financial institution.

* Qatar's Commercial Bank (PSQC) plans to inject between $500 million and $1 billion in capital in wholly owned Turkish unit Alternatifbank AS, insiders told Bloomberg News.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: China bans 5 insurers from funding parents; AMP Capital to revamp equities biz

Middle East & Africa: QNB, Dubai Islamic Bank Q3 profits up; Saudi insurers face tougher rules

Latin America: Argentina holds benchmark rate; Brazil justifies bank bail-out bill

North America: JPMorgan to launch European ETFs; Blackrock's Q3 revenue up 14% YOY

North America Insurance: Bermuda insurers may fund 25% of hurricane loss; Oregon, Zoom Health settle suit

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

European bank lobbyists pour scorn on rumored Basel deal: As anonymous reports emerge of a compromise over the controversial issue of an output floor as part of the Basel III set of banking rules, industry advocates warn European banks will face higher capital requirements.

Central bankers caught in a debt trap they helped create, IMF says: The investing and borrowing behaviors wrought by accommodative monetary policies will create unpredictable risks as those measures are withdrawn, the International Monetary Fund said in its Global Financial Stability Report.

Sheryl Obejera, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Brian McCulloch, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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