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UK readying RBS stake sale; Italian bank stocks fall amid political turmoil

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UK readying RBS stake sale; Italian bank stocks fall amid political turmoil

UK AND IRELAND

* The U.K. government is gearing up to sell a multibillion-pound chunk of its majority stake in Royal Bank of Scotland Group PLC, potentially as soon as this week, bankers told Sky News. The potential sale of £3 billion of shares in RBS would cut the 70.5% taxpayer interest in the bank to about 60%.

* Standard Life Aberdeen PLC has proposed to return up to £1.75 billion to shareholders following the completion of the sale of its U.K. and European insurance business to Phoenix Group Holdings.

* Old Mutual PLC confirmed its intention to proceed with the offer to sell up to 9.6% of Quilter PLC's ordinary shares, subject to final pricing, which is expected to be disclosed on or about June 25.

* The U.K.-based Solicitors Regulation Authority told The Times that it is likely to launch a formal investigation against Clifford Chance over a complaint that the law firm overlooked a fraud allegation during its review of RBS' treatment of thousands of small businesses.

* Standard Chartered PLC's private equity unit is looking to dispose of its stake in Construction Products Holding, a subsidiary of Saudi Binladin Group, the construction firm whose owners were embroiled in the anti-corruption purge in Saudi Arabia, insiders told Reuters.

GERMANY, SWITZERLAND AND AUSTRIA

* Landesbank Hessen-Thüringen Girozentrale, known as Helaba, reported first-quarter consolidated net profit under International Financial Reporting Standards of €52 million, up 10.6% from €47 million in the same period in 2017.

* Deutsche Bank AG launched DB Privat- und Firmenkundenbank AG, its private and commercial banking unit, created by the merger of Deutsche Bank Privat- und Geschäftskunden AG and Deutsche Postbank AG. Meanwhile, the German lender has begun laying off staff at its Australian equities and trading division, including Thomas Ciszewski, director and derivatives trading boss, unnamed sources told The Australian Financial Review.

* Deutsche Bank said it would not be launching its own online bank as previously planned but instead offer products on digital platforms open to other providers, Spiegel Online reported.

FRANCE AND BENELUX

* Bank of France Governor François Villeroy de Galhau said the new EU banking capital rules will help lift regulatory hurdles to cross-border bank mergers, but efforts should continue to encourage consolidation in the European financial sector, Reuters wrote. Villeroy also believes French banks may have to boost reserves as a result of the boom in lending which has seen private debt rise to 130% of GDP, one of the highest levels in Europe, Les Echos reported.

* Belgian tax authorities raided the headquarters of European investment company Gimv, De Tijd reported. The raid, which was confirmed by a Gimv spokesman, focuses on the company's "historical participation" in domestic and foreign investments, the paper said.

SPAIN AND PORTUGAL

* A no-confidence vote to oust Spanish Prime Minister Mariano Rajoy will be held Friday, after a one-day debate on the matter in parliament, Reuters reported.

* The Spanish Economy Ministry proposed Pablo Hernández de Cos to succeed Luis María Linde as Spain's next central bank governor, when the latter's term ends June 11, Bloomberg News reported. De Cos is the Spanish central bank's head of research and statistics.

* Bankia SA and Credit Agricole Consumer Finance are launching a joint venture through which they will extend consumer credit in Spain. It will be 51%-owned by Credit Agricole and 49%-owned by Bankia.

* Banco Bilbao Vizcaya Argentaria SA completed the transformation of its Mexican banking operations at a lower cost than initially expected, El Economista reported.

* Portuguese competition authorities have given the go-ahead for Santander Totta SGPS SA to purchase Madrid-based WiZink's debit and credit card business in Portugal, the official Lusa news agency reported.

ITALY AND GREECE

* Investors sold off Italian stocks and bonds yesterday after former IMF official Carlo Cottarelli was named the country's interim prime minister, the Financial Times reported. UniCredit SpA and Intesa Sanpaolo SpA have lost value amid short positions, MF reported. Cottarelli said he will assemble a government "very quickly" and that new elections would happen in the autumn or early next year, Reuters reported. He was named interim prime minister by Italy's president, who had frustrated a bid by two populist parties to form a government.

* Bad debt recovery company Società Gestioni Attivi approved a bond issuance program of up to €1 billion and is ready to launch the first €150 million as it seeks ways to finance its activities, MF reported.

NORDIC COUNTRIES

* Nordea Bank AB (publ) said smaller companies should commission their own research, as Europe's revised Markets in Financial Instruments Directive, or MiFID II, rules will potentially aggravate a decline in analyst coverage of the firms, leading to capital raising difficulties, Bloomberg News reported.

* The Danish Competition and Consumer Authority approved the merger agreement between Ringkjøbing Landbobank A/S and Nordjyske Bank A/S.

* DNB Venture, a unit of DNB Bank, plans to take a minority stake in digital payments solutions firm Payr A/S, Dagens Næringsliv reported.

EASTERN EUROPE

* The Turkish lira rallied against the U.S. dollar yesterday after the central bank set its one-week repo rate as the new benchmark, effective June 1, setting it at 16.5%, compared to 8% currently. The lira was up 3.09% to $4.570 as of 5:58 a.m. ET. The announcement completes the simplification of the Türkiye Cumhuriyet Merkez Bankasi AS' multi-rate monetary policy framework.

* Russian companies owned by businessman Boris Mints, including financial group Budushchee and its pension funds, are working normally despite reports that the businessman had left Russia for London, RIA Novosti said. Mints is facing several court proceedings in Russia, with Otkritie Financial Corp. Bank and PAO Promsvyazbank trying to contest a number of transactions concluded with Mints before their bailouts by the Russian central bank, the newswire noted.

* Russian insurer OAO Reso Garantia decided to postpone its initial public offering, planned for 2018, due to unfavorable market conditions, Vedomosti reported.

* The Russian central bank revoked the license of Central Insurance Co., citing violations of financial stability and solvency requirements by the insurer, Vedomosti said.

* An alliance representing more than 850 holders of bonds issued by financially troubled Polish debt collector GetBack SA, wants to reject the company's restructuring proposal and put forward its candidate to GetBack's creditors council, which will be elected June 5, Rzeczpospolita said.

* Industrial & Commercial Bank of China Ltd. unit Industrial & Commercial Bank of China (Almaty) Joint Stock Co. opened a representative office in Kazakhstan's capital of Astana.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: China overseeing 5 financial firms; SGX, NSE ends trading link talks

Middle East & Africa: Kenya, Tunisia hold rates; First International Bank of Israel posts Q1 profit

Latin America: Colombia election set for runoff; Banrisul files for card payment unit IPO

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SocGen legal settlements set to quell investor worries: As the French bank seeks growth in a highly competitive, low-interest rate environment, putting the cases to bed will help assuage investors who are worried about SocGen's legal costs, industry experts said.

Ben Meggeson, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper contributed to this report.

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