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* Christine Lagarde, the incoming European Central Bank president, signaled loose monetary policy to stimulate inflation and mitigate risks while speaking to lawmakers in Brussels yesterday, Bloomberg News reported. She recommended "a highly accommodative policy" to allow the eurozone to address external vulnerabilities, but promised to take potential consequences of an unconventional monetary policy seriously.
* Estonian central bank Governor Madis Müller is the latest ECB policymaker to express skepticism about relaunching the ECB's asset-buying scheme, telling Bloomberg that a large stimulus package would be disproportionate to economic conditions. Müller also told Eurofi Magazine that eurozone banks remain vulnerable to a wider economic slump due to their weak profitability despite holding higher capital, Reuters reported.
* The ECB's supervisory board is prioritizing the reduction of bad loans at banks in the eurozone and the acceleration of preparations for a no-deal Brexit scenario, Reuters reported, citing Andrea Enria, the board's chair.
* The EU's Economic and Monetary Affairs committee confirmed the appointment of Yves Mersch as the ECB's vice chair for banking supervision, Bloomberg News reported.
* The European Competition Commission is looking into whether Facebook's Libra currency threaten competition, Reuters reported, citing Commissioner Margrethe Vestager, who added that the examination is being done even before the product's launch so that the body "can be ready to act swiftly if an intervention were to prove necessary."
UK AND IRELAND
* The U.K. House of Commons yesterday approved legislation designed to stop an abrupt no-deal Brexit next month and instead seek another delay to the U.K.'s departure from the EU. Lawmakers defeated Prime Minister Boris Johnson's motion seeking to schedule snap elections for Oct. 15. The motion received 298 votes in favor, compared with 56 against, but it needed a two-thirds majority, or the support of 434 lawmakers, to pass.
* CYBG PLC expects to increase its provisions to cover costs related to missold payment protection insurance claims by between £300 million and £450 million as complaints and information requests spiked in the days leading to the Aug. 29 deadline to seek redress. It came after RBS said it expected an additional charge of up to £900 million for PPI claims. Co-operative Bank PLC said it also received a "substantially greater volume" of inquiries and complaints than expected prior to the deadline, and is assessing its impact on both operational processing and redress costs.
* Just Group PLC said it may have to hold an additional capital of £130 million by the 2021-end because of new Prudential Regulation Authority rules that require more capital behind lifetime mortgages, one of its key products.
* Schroders PLC announced several appointments yesterday aimed at improving its client-focused investment business, with Charles Prideaux taking on the newly created post of global head of investment and Johanna Kyrklund taking on additional responsibilities as group chief investment officer.
* Over 37% of British legacy borrowers are "mortgage prisoners," according to a report by S&P Global Ratings. Of those borrowers, 62% could refinance and reduce their monthly payments on average by £108 under a proposal by the U.K. Financial Conduct Authority.
GERMANY, SWITZERLAND AND AUSTRIA
* The record-low interest rates will destroy the European financial system in the long term, Deutsche Bank AG CEO Christian Sewing has warned. Speaking at the Handelsblatt Banking Summit in Frankfurt, Germany, yesterday, Sewing said the low interest rate environment is a competitive disadvantage of about $40 billion for European banks compared to U.S. rivals.
* At the same conference, Commerzbank AG CEO Martin Zielke took aim at Germany's three-pillar model comprising commercial, cooperative and public banks, saying the system was primarily responsible for the lack of profitability in the country's banking sector, Handelsblatt reported.
* Briton bankers Martin Shields and Nicholas Diable are standing trial in Germany for allegedly defrauding the German government of some €447.5 million through a controversial cum-ex share trading scheme, The Guardian reported. The accused parties could face 10 years of jail time, but the sentence could be lowered since they agreed to help in the prosecution of other suspects.
* UBS Group AG is due to disclose to employees today hundreds of possible job cuts at its investment bank as it seeks to drive profitability and cut costs at the division following several quarters of lackluster performance, insiders told the Financial Times. The envisaged overhaul would also reportedly include the combination of the Swiss bank's main equities division with its smaller foreign exchange, rates and credit trading operations, while all debt and equity capital markets functions would be combined into one global unit. Meanwhile, UBS is considering cooperations with peers, other than mergers, as it wades through challenges in the industry, Reuters wrote, citing CEO Sergio Ermotti.
* UBS Group AG has raised $225 million from private clients for the KKR Global Impact Fund, marking as one of the largest investments to date in the private equity impact investment vehicle.
FRANCE AND BENELUX
* Dutch healthcare insurance premiums are set to rise by €3 to €118 a month, De Telegraaf reported. The Dutch government will make an official announcement on healthcare premiums on Sept. 17, when the Dutch king officially opens the parliamentary year in the Netherlands.
* Belgian tax authorities have already made 25,548 requests to banks for information on account holders this year, with numbers being boosted by the authorities now being able to request details of foreign accounts held by Belgians, L'Echo reported.
SPAIN AND PORTUGAL
* Spanish insurance group Mapfre SA purchased a 10% stake in financial advisory firm Abante, with the objective of developing its asset management business. Moreover, the country's largest insurance group reserved itself an option to reach a 20% shareholding within three years, Cinco Días reported.
* Banco Luso-Brasileiro, Banco ABC Brasil and the Artesia fund management company are the three candidates bidding to buy the Brazilian unit of Portugal's state-run lender Caixa Geral de Depósitos SA, Jornal de Negócios reported. The three bidders are expected to present their purchase proposals in October and the Portuguese bank aims to complete the sale by year-end. Banco ABC Brasil said it had been asked by Caixa to present an offer to buy the Banco Caixa Geral – Brasil but that "there is no proposal or binding contract under negotiation for the acquisition of BCG Brasil." The sale of Caixa's Brazilian business was one of the conditions for Brussels to approve the bank's recapitalization plan.
* Portugal's Novo Banco SA will sell a €3 billion portfolio of bad credit to U.S. fund manager Davidson Kempner, Jornal de Negócios reported, citing Bloomberg. Davidson Kempner had reportedly been chosen over Bain Capital. It did not give a price for the deal, but media reports have said proposals for the portfolio were between €200 million and €300 million.
ITALY AND GREECE
* Italian Prime Minister-designate Giuseppe Conte has named veteran lawmaker Roberto Gualtieri as the country's new finance minister, Bloomberg News wrote. Gualtieri has been the chair of the European Parliament Committee on Economic and Monetary Affairs since 2014. Meanwhile, Italian President Sergio Mattarella has given the go signal for the new coalition government, which is expected to be formally sworn in today, the FT noted.
* Insurance regulator Ivass cleared IBL Banca's increase of its stake in Net Insurance to to 17.5% from the current investment of under 10%, MF reported.
* Market watchdog Consob named Mario Mori director general, Il Sole 24 Ore reported.
NORDIC COUNTRIES
* Christian Baltzer and Jim Ditmore are resigning as CFO and COO, respectively, of Danske Bank A/S as part of broader shakeup of the Copenhagen-based lender's executive board. Danske Bank has hired Stephan Engels to replace Baltzer in April next year, when his contract as CFO of Germany's Commerzbank AG expires. Until such time, Jacob Aarup-Andersen, currently Danske Bank's wealth management head, will act as CFO, while CEO Chris Vogelzang will take on the COO's responsibilities until Ditmore's successor is identified.
* Nordea Bank Abp named Frank Vang-Jensen president and group CEO, subject to regulatory approval. He will replace Casper von Koskull, who will retire by the 2020-end. Vang-Jensen will continue to be the Finnish bank's group head of personal banking until a replacement for that role is identified.
* The founder of Danish pension company Norli Pension, Thomas Vinge Hansen, has acquired a majority stake in Norwegian pension adviser Gabler, Finanswatch reported. The acquisition is in line with Vinge's ambitions to expand his business in the Nordic region.
* Anna-Greta Lundh is stepping down as CEO Länsförsäkringar Södermanland next summer, Realtid reported.
* Danish financial regulator Finanstilsynet has given Danish online shops a transitional period of 18 months to comply with new EU rules on security for online purchases, Berlingske Business reported.
EASTERN EUROPE
* A bank established in Russia last year to consolidate toxic and noncore assets of bailed-out banks will return up to 60 billion rubles to the country's central bank as a result of asset sales by the end of 2019, Banki.ru wrote.
* Polish Development Minister Jerzy Kwiecinski said the government will not help banks in coping with potential costs due to giving out foreign-currency loans equivalent to about $32 billion, Bloomberg News reported. Meanwhile, S&P Global Ratings warned lenders with exposure to such loans that they may incur losses and face lawsuits, causing them to increase their capital buffers and hedge currency positions.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: China joins JPMorgan indexes; Australia IPOs; Moody's Indian bank rating actions
Middle East & Africa: BlackRock opens Saudi office; KCB sets National Bank of Kenya takeover in motion
Latin America: Chile cuts key rate by 50 basis points; Swiss Re sells Sul América stake
North America: Colo. CU to acquire bank; Cboe Europe pursues Dutch hub regardless of Brexit
Global Insurance: Reinsurance sector forecasts; Scor strategic plan; NatGen Swedish sale
NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE
Global i-banks' H1 revenues fall to lowest level since 2006: The world's 12 largest investment banks posted combined revenues of $76.8 billion in the six months to June-end, their lowest aggregate first-half results since 2006, according to business intelligence firm Coalition.
UBS CEO says M&A is not the only way to get European banks 'out of the hole': Consolidation is inevitable in the fragmented European market but it is not the only way for European banks to recover, Sergio Ermotti said.
Scor reviewing certain business lines after 2019 price increases disappoint: The lines the global reinsurer is monitoring include marine, aviation, engineering and provision of capital to third-party syndicates at Lloyd's of London.
Industry needs to tackle 'silent' problem before Scor grows cyber cover: Scor is looking at supplementing its in-house cyber modelling tools with third-party models, according to Global P&C CEO Jean-Paul Conoscente.
Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Roman Savinov, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper contributed to this report.
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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.
