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MiFID II delay gets approval; Novo Banco sees 2016 loss; BNP Paribas plans US unit IPO


Street Talk | Episode 94: Recessionary fears in ’22 overblown, Fed could overtighten


Insight Weekly: Ukraine war impact on mining; US bank growth slowdown; cloud computing headwinds


Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022

MiFID II delay gets approval; Novo Banco sees 2016 loss; BNP Paribas plans US unit IPO

MiFID II delay receivesapproval:The European Parliament approved the European Commission's proposal to delay bya year to 2018 the implementation of the revised Markets in FinancialInstruments Directive, or MiFID II, Bloomberg News reports.The EC sought the delay to give firms more time to build data-reporting systemsbut European lawmaker Markus Ferber said Parliament realized the need forfurther changes to smooth out implementation problems.

*ECB policymakers yesterday insisted that they are prepared to adopt furthermeasures to ease monetary policy if needed, Bloomberg writes.President Mario Draghi said he still has plenty of tools at his disposal tohelp boost the eurozone economy and inflation, while chief economist PeterPraet said the ECB could recalibrate its measures if further adverse shocksemerge. Top ECB officials, however, signaled limits on future action, with VicePresident Vítor Constâncio saying the central bank is not consideringtransferring "helicopter money" directly to Europeans, Reuters notes.

*The ECB Governing Council discussed sharper rate cuts and the possibility ofexempting some bank reserves from negative deposit rates during its March 10meeting, Bloomberg reports.The policymakers decided against the exemption, partly because of complexityconcerns. The council had agreed that a 10-basis-point cut was appropriate atthe moment.

*The European Commission yesterday published draft rules on the separation ofresearch and trading fees that customers pay to asset managers, Reuters reports.Under the proposed regulations, investment firms providing both execution andresearch services must price and supply them separately.


Cameron admits stake inPanama trust:U.K. Prime Minister David Cameron admitted that he held a stake in his latefather's offshore trust that was named in the Panama Papers, Reuters reports.Cameron said his stake in the Panamanian trust Blairmore was sold in 2010before he become prime minister. BBC News and City A.M. also have reports.

*The U.K. Financial Conduct Authority sent letters to financial companiesearlier this week, asking them to disclose until April 15 any possible tieswith Mossack Fonseca, BBC News reports. and -owned Coutts Trustees were among firms mentioned in the Panama Papers thatallegedly worked with the Panama-based law firm to set up shell companies forclients.

*Mark Yallop, whose work experience includes stints as executive at and , emerged as acontender to become head of the U.K. Prudential Regulation Authority, Sky News reports.Yallop joined the regulator in 2014 as a nonexecutive director.

*The U.K. Financial Conduct Authority said yesterday that its review of theasset management industry found that companies are "generally taking theright steps to ensure they manage funds as they say they will." Theregulator, however, found examples of unclear product descriptions andinadequate governance. The FinancialTimes notesthat five investment managers were found to have been incorrectly marketingactively managed products.

* Jay Merchant, one of five former traders on trial forallegedly conspiring to manipulate LIBOR, said three senior officials of thebank were aware of the practice, the FTreports.The three Barclays executives named are Mike Bagguley, COO of Barclays'investment bank; senior banker Harry Harrison; and Eric Bommensath, a formerhead of global fixed-income, currencies and commodities. Bloombergand The Guardian also have reports.

*Mark Boleat, policy chairman of the City of London Corp., called on London'sfinancial technology sector to speak up in favor of Britain staying in the EU, City A.M. reports.Boleat, meanwhile, said there is a need to double the fintech workforce by 2020.


DeutscheBank chairman ready for potential 2nd term: Deutsche Bank Chairman Paul Achleitner tellsWirtschaftswoche that he was "in principle" ready for a secondterm starting from 2017, though he had not yet decided whether he will run forthe post. Achleitner rejected reports that some shareholders no longer want himat the bank's helm.

*Norddeutsche LandesbankGirozentrale saidyesterday that it named Thomas Bürkle managing board chairman, with effect fromJan. 1, 2017. Bürkle is currently chief risk officer at the bank, which full-year 2015consolidated profit attributable to owners of the company of €547 million, upfrom €303 million in the year-ago period.

*Swiss Financial Market Supervisory Authority CEO Mark Branson lenders to "domore" to combat money laundering, following the Panama Papers leak.Branson said the watchdog launched investigations into deals of seven bankswhose risk management and money-laundering controls are deemed inadequate, Tages-Anzeigerwrites.In total, 14 Swiss banks are at "high risk" for supporting moneylaundering, Neue Zürcher Zeitung notes.

*Credit Suisse GroupAG instructed staff against talking in public about issuesconnected to the U.K.'s EU referendum in June and against attending orarranging client events related to the subject, Reuters reports.

*The Austrian FMA is on Sunday expected to announce a new offer to repay debtsof Heta Asset ResolutionAG and extend the tenor of the bonds, Die Presse writes.Meanwhile, the province of Carinthia said it was open to new negotiations toreach an agreement with creditors, Bloomberg reports.


BNP Paribas plans IPO of USunit:BNP Paribas SA intendsto launch the IPO of U.S. subsidiary First Hawaiian Bank as early as June, accordingto The Wall Street Journal. Thetransaction could value the U.S. bank at between $4 billion and $5 billion.

*Société Générale SA hasdecided to sue former rogue trader Jérôme Kerviel and left-wing politicianJean-Luc Mélenchon for defamation, according to Les Echos. Following thePanama Papers scandal, these two personalities have accused the bank of lying.

*French banking regulator ACPR asked banks to carry out an additional reportingon their activities in countries considered as tax havens following the PanamaPapers scandal, Le Figaro writes

*Dutch regulator AFM handed out fewer fines last year than it did in 2014, butthe actual amounts were higher, the NRC reports.The AFM issued 17 fines in 2015, compared with 31 in 2014, but the amountraised last year amounted to €9.6 million, more than €2 million higher than ayear ago.

*ABN AMRO Group NVManaging Board Chairman Gerrit Zalm said yesterday that consumers might have topay to put money in their bank account if the ECB decides to further cutinterest rates, De Telegraaf writes.

* ABN AMRO saidyesterday that Bert Meerstadt stepped down from the supervisory board with immediateeffect. Bloombergand Reutersnote that Meerstadt's name appeared in the Panama Papers. Meerstadt reportedlysaid that he does not want the bank to experience "adverse effects."

* Delta LloydNV said its rights offering drew subscriptions for 218.8 millionnew ordinary shares, representing a take up of 96.15% of the offering, Reuters says.The rump offering of 8.8 million new ordinary shares starts today. The rightsissue is priced at €2.85 per share.

*SocGen Luxembourg-based unit Société Générale Bank & Trust set up at least 464ghost companies for its clients in Seychelles and the British Virgin Islandsbased on the Panama Papers, De Tijd reports. 

*BNP Paribas Fortis SAwants to put a larger share of its 800 offices in Belgium in the hands ofindependent banking agents to save costs, DeTijd writes.About 30% of BNP Paribas Fortis' branches are currently run by independentagents. L'Echo also covers.


Novo Banco expectslosses until 2017: forecasts losses of€455 million this year and €195 million in 2017 before recording a profit in2018, Jornal de Negócios reports,citing a restructuring plan being presented to potential investors as part of asale bid. The bank will also have to lay off more staff if it fails to meetrestructuring targets set by the European Commission, the paper adds.

*Angola's request for IMF support could complicate last-ditch talks betweenCaixaBank SA andAngolan investor Isabel dos Santos aimed at reducing 's exposure to Angola tocomply with European regulations, DiárioEconómico reports,citing a research note by Haitong in Lisbon. The IMF program could affect thepotential value of Banco BPI unit Banco de Fomento Angola SA and consequently that of thePortuguese bank, according to the note.

*Portuguese Finance Minister Mário Centeno told a parliamentary inquiry thatliquidating Banif-BancoInternacional do Funchal SA would have cost about €5 billion, accordingto Jornal de Negócios. Thefinance minister said the government-backed resolution of the bank instead costthe state €2.26 billion.

*Steven Braekeveldt was named CEO of AXA Portugal Companhia de Seguros SA, replacing VioletaCiurel, Jornal de Negócios writes.The company, which was recently acquired from by , will change its name toAgeas Portugal at a general meeting April 26.

*The plan to create an Italian state-backed fund that would purchase bad loansfrom troubled banks should be ready by Monday, insiders tellReuters. The government was in contact with the European Commission to ensurethat the scheme would not violate EU regulations.

*Salvatore Rossi, senior deputy governor at the Bank of Italy, said there areproblems with applying EU norms on bank resolution, potentially presentingrisks to systemic stability, accordingto MF.

*UniCredit SpA CEOFederico Ghizzoni expressed confidence that Banca Popolare di Vicenza SpA's €1.76 billion capitalincrease will go well, Reuters reports.

*FinecoBank SpA plansto do business in the U.K. at the start of 2017 after receiving approval fromthe Bank of England, but will only have an online presence in the country, MF reports.

*Spain's CNMC initiated procedures against Banco Bilbao Vizcaya Argentaria SA, , and CaixaBank forpurportedly reaching anti-competition agreements aimed at price-fixing andexchanging sensitive commercial information in relation to derivativecontracts, Europa Press writes.

* Banco Santander, CaixaBank and other Spanish lenders canno longer offer mortgages with floor clauses under a ruling by a Madrid court,Reuters reports.The banks were told to repay customers the losses they have incurred since theSupreme Court ruled in May 2013 that such mortgages are invalid if they werenot presented clearly to customers.

* A judge reduced the bail for eight former executives ofthe defunct Caja de Ahorros del Mediterraneo to €25.6 million, saying that theprevious bail of €1.6 billion was set in error, Reuters reports.Banco de Sabadell, which acquired the savings bank in 2011, will be partlyresponsible to cover the bail.

*BBVA placed €1 billion in convertible bonds carrying an 8.88% coupon, EuropaPress reports.

* The Bank of Greece saidyesterday that the ECB Governing Council did not object to the Greek centralbank's request to lower the ceiling on emergency liquidity assistance to Greekbanks to €69.9 billion until April 21.

* The Central Bank of Cyprus strengthened the requirementsfor commercial banks and intermediaries to know customers' identities, Reuters reports.The new requirements are immediately applicable.


Customers flee Nordea Bankafter Panama Papers:About 4,000 customers have left Nordea Bank AB following revelations of the bank'sinvolvement with offshore tax havens in the wake of the Panama Papers scandal, Realtid reports.CEO Casper von Koskull noted that Nordea's offshore business only represents 1%of the group's total business. Separately, Chairman Björn Wahlroos toldFinnish newspaper Hufvudstadsbladetthat the money involved in the scandal was "so little that the amount isalmost nonexistent."

*DNB ASA yesterday that the groupwill record a first-quarter positive effect of 1.00 billion Norwegian kroner inrespect of basis swaps connected to funding, down from a positive effect of1.81 billion kroner in the year-ago period.

*Three former executives of the former Kaupthing were released early fromprison, RUV reports.Magnus Gudmundsson and Sigurdur Einarsson, and major shareholder OlafurOlafsson have served only one year of their prison sentences, while former CEOHreidar Mar Sigurdsson was not released.


Russian central bank tochange bank bailout scheme: The Russian central bank plans to change the financialrecovery mechanism used to bail out troubled banks so as the funds providedunder such scheme could not be used by investors participating in the bailoutsto improve their own financial position, Vedomostireports,citing Governor Elvira Nabiullina.

*The central bank plans to become more transparent and start publishinginformation on banks banned from taking deposits, with legislative changesenabling these plans to be approved by year-end, Kommersant writes.Separately, the central bank canceled a license held by due to low quality ofassets and capital drop below the required minimum, according

* Russian President Vladimir Putin finally broke his silenceover the Panama Papers, saying that a friend of his named in the leak had donenothing wrong, Reuters reports.Putin said the leak was part of an orchestrated attempt by Russia's opponentsto destabilize the country. BBC News also has a report.

*Globex Bank and Sviaz-Bank, which were bailed out in 2008, may need financial supportagain as a significant part of their assets requires additional provisioning, Vedomosti writes.The value of financial aid needed by the banks is estimated at between 60billion Russian rubles and 100 billion rubles.

*PJSC BankSaint-Petersburg plans to grow its business between 2016 and 2018via M&A, Vedomosti reports.The lender, which operates mainly in Saint Petersburg region, also has plans toenter other Russian regions.

*JSC Russian AgriculturalBank's supervisory board approved a new strategy under which thebank is expected to become profitable again in 2017, Kommersant writes.The lender plans to reduce loans to agricultural businesses and increaselending to less risky sectors.

*Polish President Andrzej Duda said the proposal on converting foreign-currencymortgages should be changed to help borrowers but to also ensure the safety ofthe Polish banking system, Rzeczpospolitareports.

* The ECB warned that the National Bank of Hungary'sacquisition of a majority stake in the Budapest Stock Exchange "may beseen as giving rise to monetary financing concerns," Reuters writes.The ECB called on the Hungarian central bank to ensure that grants to itsfoundations are not used for state financing purposes.

* Turkey introduced a measure that allows banks torestructure loans to the struggling tourism industry twice before declaringthem nonperforming, Bloomberg reports.Local tourism businesses owe banks a combined $17 billion.

*Moody's saidyesterday that some Turkish lenders could need to issue additional capital toavoid a shortfall before the full implementation of Basel III rules in 2019.

*Turkey's Banking Regulation and Supervision Agency approvedthe sale of a 99.81% stake held by National Bank of Greece SA and units in to .


*The board of directors of 1Malaysia Development Bhd. offered to resign after aparliament inquiry recommended that the fund's top management face criminalinvestigation, The Wall Street Journalreports.

* Ina letterto shareholders, JPMorgan Chase& Co. Chairman and CEO Jamie Dimon said the bank might lose $2billion in Brazil if the country's economy continues to experience severe stress.Dimon said the bank is not retreating from Brazil, where it has a publiclydisclosed exposure of about $11 billion.

*China Construction BankCorp. is seeking authorization from the China Banking Regulatory Commissionto inject $200 million of capital in troubled Brazilian unit , Valor Econômico reports.The move follows two consecutive years of losses for the subsidiary.


: Decisions about who pays or receives what have yet to bemade but a deal over Austrian bad bank Heta is drawing to a close.

: David Williams, TechnicalDirector at AXA Insurance, spoke to S&P Global Market Intelligence aboutthe outlook for self-driving cars, regulation, and why he's likely to know ifyou're reading Gardening World.

Leo Magno, Arno Maierbrugger,Stephanie Salti, Praxilla Trabattoni, Heather O'Brian, Beata Fojcik, KeesPijnappels, Esben Svendsen, Thanasis Kakalis, Helen Popper and Ali Kayalarcontributed to this report.

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