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SocGen to take €240M hit; German tie-up seen as unwise; Brexit delay in sight

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SocGen to take €240M hit; German tie-up seen as unwise; Brexit delay in sight

* The EU is exploring the possibility of delaying Britain's departure from the bloc until 2020, after both Germany and France expressed willingness to extend Brexit negotiations due to the political situation in the U.K., according to The Times. Subsequently, the bloc will demand British Prime Minister Theresa May to radically rethink her Brexit strategy, Bloomberg News wrote. May's government narrowly survived a no-confidence vote, dimming the prospects of snap elections just weeks before Brexit. U.K. Labour Party leader Jeremy Corbyn insisted that he will not hold positive discussions with May unless she agrees to remove the catastrophic prospect of a no-deal Brexit, The Guardian reported.

* EU finance ministers are expected to shelve a proposed plan to bolster the bloc's financial regulators due to reservations by some states led by Luxembourg on giving up their respective national powers to supervise money managers, Reuters reported.

* The ECB published a single code of conduct for all of its policymakers, supervisory and executive board members and high-ranking officials to further refine its good governance and integrity frameworks. The code regulates a wide range of activities from investments to asset disclosures, as well as private engagements.

* Insured losses from major natural catastrophes came in at approximately $71.5 billion in 2018, according to Willis Re, the reinsurance division of Willis Towers Watson.

UK AND IRELAND

* Bank of England Governor Mark Carney said the central bank is in talks with the U.K. Treasury over additional powers it may require to smooth any financial disturbances that may result in case of a no-deal Brexit, Bloomberg reported.

* Beazley PLC named Sally Lake group finance director, replacing Martin Bride, who will step down from the post in May 2019.

* Kingswood Holdings Ltd. CEO Marianne Ismail will leave the British asset manager, effective immediately to pursue other interests. Gary Wilder, the group's executive deputy chairman, will take over the CEO role.

GERMANY, SWITZERLAND AND AUSTRIA

* Deutsche Bank AG's shares increased yesterday after Bloomberg reported that the ECB and German financial regulator BaFin would prefer that the lender merge with a European peer rather than local rival Commerzbank AG, insiders told Bloomberg. The ECB reportedly prefers a cross-border combination to drive integration in the region's financial sector, while BaFin argues for a European deal because Deutsche and Commerzbank are currently too weak to sufficiently benefit from a merger.

* Norddeutsche Landesbank Girozentrale's top executives updated ECB officials in Frankfurt yesterday on the status of the state lender's planned partial privatization, insiders told Handelsblatt. The NordLB board was expected to inform the ECB about the ongoing bidding process with financial investors, its current options and future timetable.

* Bermuda-based Maiden Holdings Ltd. sold Germany-based auto insurance subsidiary AVS Automotive VersicherungsService GmbH and its related European subsidiaries to Allianz Partners SAS for an undisclosed sum.

* Merck Finck Privatbankiers AG CEO Matthias Schellenberg told Bloomberg that the Munich-based bank is holding concrete discussions on potential acquisition opportunities as it looks to double its AUM in the next five years.

FRANCE AND BENELUX

* Société Générale SA expects its fourth-quarter 2018 results to include an exceptional negative charge of approximately €240 million related to its corporate center division, due to the group's implementation of the IFRS 5 accounting standards.

* SocGen's corporate and investment banking unit appointed Peter McGahan head of coverage and investment banking in the U.K., effective Jan. 14. McGahan replaces Sadia Ricke, who will now focus solely on her role as the division's U.K. chief country officer.

SPAIN AND PORTUGAL

* Banco Santander SA said it will appeal its indictment in a criminal case filed before the Spanish High Court against former top Banco Popular Español SA managers Ángel Ron and Emilio Saracho and board members, Expansión wrote. The investigating magistrate, José Luis Calama, explained that Banco Popular Español SA's criminal responsibility was not extinguished by effect of the merger by absorption into the group and instead shifted to the purchasing entity.

* Millennium BCP CEO Miguel Maya said the institution is making plans to start paying back part of the salary of employees who suffered from cuts implemented between 2014 and 2017 as part of a restructuring plan agreed with Brussels, Jornal de Negócios reported.

ITALY AND GREECE

* Banca Carige SpA is expected to shortly issue a state-backed three-year bond exceeding €1 billion, as it seeks to stabilize its liquidity reserves following an outflow in December, MF reported. Meanwhile, lead Banca Carige investor Malacalza Investimenti Srl has asked the ECB for all documentation related to its decision to place the bank under administration, to keep open the possibility of appealing to the European Court of Justice against the move, according to Il Sole 24 Ore.

* Greek Prime Minister Alexis Tsipras won another confidence vote, the fourth since he took office, Bloomberg reported. The vote allows Tsipras to extend his stay in power until September, when his term officially ends.

NORDIC COUNTRIES

* Denmark-based Jyske Bank A/S intends to sell unit Jyske Bank (Gibraltar) Ltd. due to the risk surrounding Britain's impending departure from the EU. The lender noted it has received numerous inquiries for the subsidiary from potential suitors.

* Storebrand ASA anticipates a tax income of approximately 1.6 billion Norwegian kroner that will be booked in its fourth-quarter 2018 results due to Norway's new tax rules for insurance and pension companies. The regulations will also increase the company's calculated solvency ratio by about 6 percentage points.

EASTERN EUROPE

* The Turkish central bank's monetary policy committee decided to keep its one-week repo auction rate unchanged at 24%.

* OTP Bank Nyrt.'s Bulgaria-based unit, DSK Bank, completed the acquisition of a 99.74% stake of Societe Generale Expressbank AD, as well as other Bulgarian units of Société Générale.

* PJSC Sarovbusinessbank named Alexei Yelagin president and chairman of the management board, replacing Irina Alushkina, who will join the Russian lender's board of directors. Yelagin previously worked for VTB Bank PJSC, which acquired a majority stake in Sarovbusinessbank earlier in January.

* PAO Sberbank of Russia plans to launch a crowdfunding platform through which its retail clients will be able to lend money to companies, Vedomosti reported.

* Vladimir Yashin was appointed deputy chairman of the management board at JSC Russian Agricultural Bank, new agency Prime reported. Yashin, who previously worked for Sberbank and Promsvyazbank, will oversee Russian Agricultural Bank's small and medium-sized business division and division responsible for the development of corporate business.

* Czech lender Banka Creditas a.s. plans to increase its capital by 750 million Czech koruny to over 4 billion koruny to further finance its development, with the capital hike procedure to be completed within a month, E15 reported.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: India eases foreign borrowing norms; ASIC to clamp down on car loans

Middle East & Africa: Samba FY'18 profit up 10%; Hapoalim joins SWIFT; Access Bank plots expansion

Latin America: Argentina inflation hits 27-year high; Fitch downgrades Costa Rica

North America: BofA, Goldman Sachs Q4'18 earnings out; Fiserv acquiring First Data

Global Insurance: Cat losses $71.5B, Willis says; Markel faces litigation; PG&E liability wipeout

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

New EU securitization rules may put brakes on issuance growth in 2019: Issuance on the European securitization market has been on the rise over the past five years but this trend may trail off in 2019 due to uncertainty around new regulations, according to S&P Global Ratings.

Cyber insurance availability improving but has further to go, says Marsh exec: Capacity has grown, more coverage is available for first-party risks such as business interruption and markets outside the U.S. are growing, according to Marsh's president of global risk of digital. But more remains to be done.

Santander U-turn on CEO shows a lack of clarity in strategy The Spanish lender's decision not to hire UBS investment banking chief Andrea Orcel sends a confusing message to investors about the bank's strategic objectives.

Hungary aspires to a cashless future: finance ministry official: The negative impact that cash payments have on the Hungarian economy are estimated at around 450 billion Hungarian forints a year, according to August 2018 figures from the country's Cabinet Office of the Prime Minister.

Investors anticipate softer Brexit; some spy opportunities in UK stocks: The rejection of U.K. Prime Minister Theresa May's plan had a limited impact on sterling, suggesting a consensus is forming that the terms of the country's departure from the European Union will be softened, or even reversed.

Sheryl Obejera, Ed Meza, Meike Wijers, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

The Daily Dose has an editorial deadline of 7 a.m. London time. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.

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.