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May sets Article 50 date; ING downsizes; no Deutsche US deal yet


Commercial Banking: June 22nd Edition


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May sets Article 50 date; ING downsizes; no Deutsche US deal yet


May set for Article50:U.K. Prime Minister Theresa May pledged to trigger Article 50 of the Lisbon Treaty bythe end of March 2017, setting Britain on course to leave the EU by 2019. Mayalso laid out plans for a "great repeal bill" that will enshrine allexisting EU law into British law once the country is out of the bloc. BBC News, the FinancialTimes and TheWall Street Journal cover.

* May also signaled a move toward a hard Brexit after stressing thatshe will prioritize immigration control, The Guardian reports. May also warned that therewill be no Scottish opt-out, saying it will leave the EU along with the rest ofthe U.K., The Daily Telegraph notes. In response, Scottish FirstMinister Nicola Sturgeon accusedMay of reneging on giving the Scottish government a voicein Brexit talks.

* U.K. Chancellor Philip Hammond indicated plans to shift the government's fiscal policiesby unveiling a new "pragmatic" plan that will allow greater scope forinvestment later this year, Sky News writes. Hammond said he will break away from his predecessor George Osborne'spolicies in light of the new circumstances that Britain is facing.

* The board of directors of Henderson GroupPlc and  agreedto an all-stockmerger of equals. The merger will be effected via a share exchange, withone Janus share exchanged for 4.7190 newly issued shares in Henderson. Thecombined group will be Janus Henderson Global Investors Plc.

* Former trader Chris Ashton, who wassuspended in connection with a probe into possible manipulation of foreignexchange markets, lost his unfair dismissal case against the bank, BloombergNews reports.

* A survey of Irish insurance firms' chief executives foundthat nearly one fifth of them are planning to either acquire or merge with acompetitor in the coming year, IrishIndependent notes.

* Ed Sibley, director of Credit Institutions Supervision atthe Central Bank of Ireland, said the regulator is dissatisfied with banks'progress in dealing with their high levels of bad loans, Reuters reports.Sibley said troubled loans, which currently stand at €45 billion, equivalent to19% of the biggest Irish banks' combined loan books at June-end, remain asignificant problem for the economy and urged banks to speed up efforts toaddress them.

* Irish Finance Minister Michael Noonan isconsidering imposing a tax on overseas income from Irish property loans held in specialpurpose vehicles used by so-called vulture funds, The Irish Times writes.


No deal yet on Deutsche'sUS misselling suit: DeutscheBank AG's discussions with the U.S. Department of Justice to settleU.S. litigation over its sales of RMBS is moving forward but no deal has yetbeen presented to senior decision makers on either side for approval, insiders tellThe Wall Street Journal. A report byAgence France-Presse last week saying that both parties were close to a $5.4billion settlement — lower than the $14 billion originally demanded — has notbeen confirmed, Reuters notes.Meanwhile, the bank is nearing an accord with its works council to eliminateapproximately 1,000 jobs in Germany, insiders tellBloomberg News. The planned layoffs will mostly affect back-office staff.

* In a messageto employees, CEO John Cryan saidspeculation in the media that hedge fund clients have reduced their activities with the bank is "causingunjustified concerns" andstressed that the lender has more than 20 million clients. Cryan said the bank has become subject tospeculation and ongoingrumors were causingsignificant swings in its stockprice.

* German EconomyMinister Sigmar Gabriel sharply criticized Deutsche Bank yesterday, Die Welt writes. "I don't know if I should laugh or cry that thebank that made speculation a business model is now saying it is a victim ofspeculators," Gabriel said.

*  will sella portfolio of mostly nonperforming loans with nominal volume of about €3.2billion in sales processes until mid-2017, Reuters reports.

* 'sboard voted not to extend CEO Arnd Hallmann'scontract after it expires next year. The decision ends an ongoing feud betweenHallmann and sseldorf MayorThomas Geisel over the amount of dividends Stadtsparkasse sseldorf has to pay the city, Rheinische Post reports.

* appointed nter Tallner managing board member responsible for itscorporate customersand special finance divisions. Tallner succeeds Eckhard Forst, who will joinNRW.Bank as chairman of the managing board. Tallner is currently a divisionalboard member of 's Mittelstandsbank,where he heads the corporate customers business in northern Germany.

* Felix Hufeld,president of Bafin, tells Frankfurter Allgemeine Sonntagszeitung thatthe constant drop in interest income is "an acute threat" for thebanking industry.

* The Swissgovernment is easing the tax burden on the country's bigbanks. The Federal Council is looking to amend the participationdeduction in connection with too-big-to-fail legislation.


Massive layoffs atING: ING Groep NVwill cutup to 7,000 positions, mostly in Belgium and Netherlands, as part of itsdigital transformation plan. The group said it intends to invest €800 millionin the program, which is expected to deliver approximately €900 million ofannual costs savings by 2021. HetFinancieele Dagblad reports thatthere could be about 2,300 layoffs in the Netherlands. L'Echo featuresa "live" updated page on its website covering the restructuring.

*  is consideringbidding for London Stock ExchangeGroup Plc's French clearing unit LCH.Clearnet SA, insiders tell The Times.

* R&Q Insurance (Malta) Ltd. said it obtained regulatoryapprovalsfor the portfolio transfer agreement of certain contracts relating to legacyexposures originally underwritten by Belgian firm Aviabel SA. Prior to thetransfer, R&Q Insurance (Malta) had written a reinsurance of the contracts.

* ThibaudEscoffier, head of shipping and offshore finance at , said the firm will likely earmark additional provisions thisyear to cover potential losses following the sharp downturn in the shippingindustry, Reuters writes. The unit has a $15billion shipping portfolio.

* Following a two-day meeting between management andunions, the company said it will not cut any jobs in addition to thoseannounced at the end of 2015, L'Echo reports.

* Former Société Générale SA trader Jérôme Kerviel decided not toappeal the €1 million in costs awarded against him to not delay the judicialexamination of the €2.2 billion tax credit awarded to the bank, La Tribune writes.

* Financial companies are pushing the sale of assurance-vieregulated savings products linked to the property market as an alternative tothe secure but low-interest euro accounts or share-based accounts that areperceived as riskier, Le Monde reports.


No more layoffs, saysNovo Banco: Novo BancoSA Chairman António Ramalho assuredemployees that there will be no further job cuts, even if the bank is not soldby the end of the year. Jornal deNegócios had reportedearlier that the European Commission would demand 500 layoffs if a deal werenot reached.

* Novo Banco reached a deal to sell a 22% stake in airportand car park manager Empark to Parkinvest for €69 million as part of a strategyto dispose nonstrategic assets, DinheiroVivo reports.

* Beginning 2017, Portuguese banks will have to report tothe country's central bank all offshore operations in excess of €15,000, Económico reports.

* IbercajaBanco SA is looking for one or more partners willing to inject €200million into its capital before its stock market debut, ABC reports.


Italy gets more time to sell rescued banks:Senior Italian bankers are meeting today to discuss stalled efforts to sellfour lenders bailed out last year, after the EU agreed to extend a Sept. 30deadline for selling them, sources tellReuters. The ECB rejected Unionedi Banche Italiane SpA's offer for three of the four banks as UBIBanca is unwilling to inject more than 400 million in fresh capital into the banks, IlMessaggero reports, noting thatthe ECB has requested a 600million capital injection. UBI will continue to discuss its proposal with theECB in the coming days, Il Sole 24 Ore says.

* Generali CFO Alberto Minali said is not consideringan acquisition of FinecoBankSpA, Reuters reports.

* A Milan court ordered that ,Nomura and Deutsche Bank stand trial for a string of financial crimes, andindicted 13 currentand former managers from the three banks on charges that they used derivativetrades to conceal losses, legal sources tellReuters.

* A consortium comprising Lone Star and Italianloan servicer Caf and another composed of Christofferson Robb & Co. andItalian real estate group Prelios are among investors presenting nonbindingoffers to buy a platform expected to manage a roughly 9 billion portfolio of Monte dei Paschi's bad loans,insiders tellReuters. Bids were also presented by Cerved, KKR and Varde Partners.

* BancaPopolare di Milano Scarl Chairman Mario Anolli said the bank wouldcall a new shareholders meeting by the end of the year to approve itstransformation into a joint stock company if shareholders reject a proposal tomerge with Banco Popolare SocietàCooperativa in a shareholders meeting later this month,MilanoFinanza writes.

* Imerisia writes,citing Kathimerini, that Greek banksare willing to accept a haircut, or even a total writeoff, on mortgage loans toreduce their nonperforming loans portfolios. Banks are also consideringoffering the option to borrowers to negotiate and repay their loans shortlybefore these loans are sold to a fund.


FSA says no toØstjydsk's prepayment plans: The Danish FSA did not green-light 's plans toredeem parts of its government loans ahead of time, FinansWatch reports.The bank wanted to redeem 40% of its government hybrid capital before itmatures in 2018 to save annual interest payments of some 7 million kroner.

* DanskeAndelskassers Bank A/S sold some of its shares in at the market value of47 million Danish kroner, FinansWatch notes. The banknow holds 33.4 million kroner of DLR shares.


Russian banks to seereserve requirements rise: TheRussian central bank plans to tighten existing reserve requirements for banksas of Jan. 1, 2017, Kommersant reports.

* Shareholders ofCOMMERCIAL BANK UNIASTRUM BANK(LLC) and PJSC OrientExpress Bank will approve a merger of the two lenders Oct. 7, RBK Daily reports.

* The Russian central bank accused former managers of assetmanagement company Uralsib of price manipulation with the shares of UralsibLeasing, Vedomosti reports.

* The arbitrationcourt of Saint Petersburg and Leningrad region declared invalid a transactionunder which JSC BankSovetsky provided a 14.8 billion ruble loan to , which took overSovetskiy as a result of a financial recovery program launched for the lender, Kommersant writes.

* AXA completedits acquisition of LibertyUbezpieczenia, the Polish property & casualty operations of Liberty MutualInsurance Group, for a total cash consideration of 101.3 million zlotys.

* Jaroslaw Kaczynski, head of Polish ruling party PiS,approved a proposal under which the Polish central bank would take all thecompetences of the Polish FSA, PulsBiznesu reports.

* GE Group sold 125 million shares of Moneta Money Bank for9.4 billion koruny and lowered its holding in the bank to 18%, Hospodarske Noviny says.

* New Czech central bank recommendations came to force as ofOct. 1, under which banks can issue mortgage loans only up to 95% of the valueof the purchased property, HospodarskeNoviny reports.As of April next year, banks will only be allowed to lend clients up to 90% ofthe value of purchased property.

* The Romanian central bank reduced minimum reserverequirements for banks' hard currency liabilities to 10% from 12% due to a dropin foreign currency loans and an adequate level of reserves, Reuters reports,citing the central bank's governor, Mugur Isarescu.

* TürkiyeKalkinma Bankasi AS will increaseits capital by 340 million lira to 500 million lira through rights issues.


Asia-Pacific: AXA, Allianz proceed with StanChart deal; CBA offers clients A$11Mover poor financial advice

Middle East & Africa: KCB in search of fintech partners; Moza Banco put under administration


Europetorpedoes Basel IV as it struggles to contain Deutsche fears: BaselIV looks dead in the water as European officials move to protect a financial systembuffeted by fears over Deutsche Bank and Italian NPLs.

Data DispatchEurope: European banks offer improving dividend outlook for 2016:European banks are broadly projected to increase their dividend yields in 2016compared to 2015, but they also have a track record of falling short ofexpectations.

Xana Kakoty, Ed Meza, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Thanasis Kakalis, AliKayalar, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributedto this report.

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