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Germany's sparkassen cut value of NordLB stakes; Popolare di Bari eyes cash call

Banking Essentials Newsletter - November Edition

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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


Germany's sparkassen cut value of NordLB stakes; Popolare di Bari eyes cash call

* The ECB will likely debate in the coming months new cheap multiyear loans to banks, Reuters noted, citing minutes of policymakers' December 2018 meeting.

* The European Parliament's Committee on Economic and Monetary Affairs adopted proposals by the European Commission to reform the European system of financial supervision.

* Growth in alternative reinsurance capital has slowed following two years of heavy catastrophe losses, but is set to pick up again, insurance broking group Aon said in its latest reinsurance market outlook.

* Activist investors increased their activities to record levels in 2018, the Financial Times reported, citing data from Lazard.

UK AND IRELAND

* The British government rejected calls to reform laws on business loans, saying new rules on loans to small businesses would increase costs and damage competition, the Financial Times reported.

* S&P Global Ratings warned that a disorderly Brexit could result in ratings actions on U.K. banks, noting that outlook revisions will be more likely than downgrades in the near term.

* The U.K. Financial Conduct Authority is considering changes to its responsible lending rules in an effort to help so-called mortgage prisoners who are unable to switch to a better deal. The regulator has, meanwhile, launched a probe into the working culture at Royal Bank of Canada in London following multiple complaints from former employees over their treatment, insiders told the FT.

* HSBC Holdings PLC will pay $30 million to settle a lawsuit accusing 11 major banks of rigging prices of U.S. dollar-denominated supranational, sub-sovereign and agency bonds, Reuters reported. HSBC denied liability, saying it settled to avoid more litigation.

* U.K. insurer Hastings Group Holdings PLC named John Worth Group CFO, replacing Richard Hoskins, who will retire. Worth, who currently holds the same role at MS Amlin PLC, is expected to join Hastings within the next few months.

* U.K.-based Mizuho International PLC named Royal Bank of Canada executive Christoph Seibel CEO of unit Mizuho Securities Europe GmbH.

GERMANY, SWITZERLAND AND AUSTRIA

* Some 20 German savings banks, or sparkassen, in the eastern German states of Saxony-Anhalt and Mecklenburg-Western Pomerania, have set the book value of their stakes in Norddeutsche Landesbank Girozentrale to zero, Handelsblatt reported. The move by the 20 banks, which hold a combined 9% in NordLB, follows similar actions by savings banks in neighboring Lower Saxony. The more than 40 banks, which hold a 26% stake, reportedly wrote off more than €400 million in NordLB's value.

* German prosecutors in Cologne have launched an investigation against Deutsche Bank AG in connection with possible offenses stemming from dividend stripping trades, Handelsblatt reported.

* Credit Suisse Group AG said it will begin a share buyback program of up to CHF1.5 billion Jan. 14. The Swiss lender expects to repurchase at least CHF1.0 billion of shares, subject to market and economic conditions.

* UBS Group AG executive Ben Smyth, who filed a case against the Swiss lender in November 2018 over discrimination related to whistleblowing, has left the bank, with the case now settled, insiders told Thomson Reuters' IFR.

* Swiss private bank Mirabaud & Cie SA has acquired Galloway Gestora De Recursos Ltda, a Brazilian asset management business specializing in emerging market debt. The company will become part of Mirabaud Asset Management, the Mirabaud Group's specialist division focused on investment management and advisory services.

* Kathrein Privatbank AG CEO Susanne Höllinger has resigned, Die Presse wrote. Board member Harald Holzer has been appointed interim CEO.

FRANCE AND BENELUX

* Axa CEO Thomas Buberl said the French insurer is set to shift employees to Ireland from Britain and France as Brexit inches closer to realization in March, Reuters reported. Buberl did not specify the number of staff Axa plans to move.

* Japan's Norinchukin Bank will set up a branch in Amsterdam amid Britain's pending exit from the EU, Het Financieele Dagblad reported.

SPAIN AND PORTUGAL

* Ibercaja Banco SA is in the final stages of preparations for its next IPO, scheduled to take place in the spring, and has appointed Morgan Stanley and JPMorgan as general coordinators of the stock offering, Expansión wrote.

* Workers' unions estimate that CaixaBank SA's planned redundancies will affect between 2,000 and 2,500 employees of the bank, EFE reported.

* Banco de Sabadell SA's Mexican subsidiary has acquired an additional stake of 49.27% in Sofom SabCapital, increasing its stake in the multipurpose financial company to 51%, Expansión wrote.

* Portugal's central bank has fined three former executives of failed lender Banco Espírito Santo SA a total of €3.4 million for allegedly hiding the risks of a €3 billion loan granted by the bank to Angolan unit Banco Espírito Santo Angola, Expresso and Jornal de Negócios reported.

ITALY AND GREECE

* Italian cooperative bank Banca Popolare di Bari SCpA plans to carry out a share issue for up to €300 million and a placement of €200 million in subordinated debt to clean up its balance sheet, an insider told Reuters.

* The Italian populist government's change of heart about using state funding to support the ailing Banca Carige SpA is a positive development for the bank, analysts said.

* Banca Carige could issue a state-guaranteed bond of roughly €1 billion next week, Reuters reported, citing Il Messaggero. Meanwhile, UniCredit SpA could consider acquiring Banca Carige if the Italian government would provide financial support for the deal, insiders told Reuters. It also emerged that France's Crédit Agricole SA is among 10 potential buyers that may be interested to acquire Carige if the bank were to reduce its nonperforming loans and borrowing costs, an insider told Bloomberg.

* Iccrea Holding SpA's shareholders approved the new bylaws and a €250 million capital increase that will bring the core Tier 1 ratio to 13.5%, MF reported.

* Banca Popolare di Sondrio SCpA is in pole position to take over Farbanca SpA, MF reported.

* Banco BPM SpA reduced its exposure to real estate company Statuto to €570 million from an original €900 million and plans to reduce it further, MF reported.

NORDIC COUNTRIES

* Danske Bank A/S has postponed a planned bond issuance after Hermitage Capital Management Ltd. founder and CEO Bill Browder said he plans to reveal new information on the money laundering case linked to the Danish lender, Bloomberg News reported. Browder said he urged French authorities to probe Danske Bank in connection with the case instead of treating the Danish lender as a witness, Reuters wrote.

* Nasdaq Technology AB is completing its recommended public cash offer to shareholders and warrant holders of Sweden-based Cinnober Financial Technology.

* Icelandic financial technology company Meniga hf. acquired Swedish rewards platform Wrapp for an undisclosed amount.

EASTERN EUROPE

* Banco Santander SA unit Santander Bank Polska SA plans to lay off up to 1,400 employees, or around 11% of its workforce.

* VTB Bank PJSC completed the acquisition of controlling stakes in PJSC West Siberian Commercial Bank and PJSC Sarovbusinessbank.

* The Russian central bank issued warnings for the management of JPMorgan Chase & Co.'s Russian subsidiary over noncompliance with money laundering legislation, including failure to submit information about financial transactions subject to mandatory control, Vedomosti reported. The bank could also face fines of between 10,000 Russian rubles and 100,000 rubles.

* Polish debt collector Best SA filed a lawsuit against Kredyt Inkaso SA, two former members of Kredyt Inkaso's management board and auditor Grant Thornton Frąckowiak, demanding 51.8 million Polish zloty compensation for losses incurred during the purchase of Kredyt Inkaso shares in 2015, Parkiet reported.

* Alior Bank SA denied a news report published by Puls Biznesu, which suggested that the bank was facing a hefty regulatory fine for the alleged misselling of financial products offered by a local financially troubled investment fund manager, Rzeczpospolita reported.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Hong Kong fines FWD Life; Woori Bank ex-CEO sentenced to prison

Middle East & Africa: Brookfield drops bid for Abraaj's Turkish assets; Italy's Azimut enters Egypt

Latin America: Moody's LatAm outlook for 2019 stable; 2 Banxico board members named

North America: BlackRock promotes likely CEO successor; State Street firing 15% of senior execs

Global Insurance: Zurich sued over NotPetya; Fed backs NAIC capital regime; European winter storm

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Bleak outlook for European investment bank revenues amid geopolitical woes and a maturing credit cycle: After a turbulent 2018, European investment banks are not likely to see a turnaround in trading revenues in 2019, as late-cycle risks and geopolitical tensions continue to worry investors and drive market volatility.

French bank profits will remain under pressure even if rates rise: Profits at French lenders will not necessarily benefit from a potential interest rate rise in 2019 as high costs, tough competition and increasing investments weigh on banks' bottom line, according to analysts at S&P Global Ratings.

Doubts grow that the ECB will be able to raise rates in 2019: Weakening economic indicators and stubbornly low inflation have led many economists to re-evaluate whether the European Central Bank will be able to hike rates this year.

Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Sophie Davies and Helen Popper 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.