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HSBC gets new CEO; 3 global banks settle LIBOR case; ASR issues CoCos

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Top 100 Banks: Capital Ratios Show Resilience to the Pandemic

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Banking Essentials Newsletter: October Edition


HSBC gets new CEO; 3 global banks settle LIBOR case; ASR issues CoCos

* ECB policymakers have broadly agreed to extend the central bank's asset buying program at a lower volume, possibly by nine months, insiders told Reuters. The exact amount of purchases, which is currently at €60 billion per month, is still up for debate with views varying between €25 billion and €40 billion. A decision on the asset purchases, which is set to expire by year-end, is due Oct. 26.

* The European Banking Authority has warned against watering down existing authorization standards for institutions seeking to relocate to within the EU in light of Brexit, and cautioned firms against setting up "empty shell" companies. The EBA also urged the European Commission to consider revising legislation regarding the current system of assessing access for overseas investment firms, which it described as "suboptimal." The Financial Times covered.

* HSBC Holdings Plc, Deutsche Bank AG, and Citigroup Inc. will pay a combined $132 million to resolve a U.S. lawsuit brought by future traders accusing them of rigging the London Interbank Offered Rate, Reuters reported.

UK AND IRELAND

* As expected, HSBC has appointed John Flint executive director and group CEO. Flint, currently CEO of HSBC's retail banking and wealth management division, will replace Stuart Gulliver in February next year.

* Lloyds Banking Group Plc agreed to acquire Zurich Insurance Group AG's U.K. workplace pensions and savings business for an undisclosed amount. The deal is expected to partially close in the first quarter of 2018, followed by the subsequent completion and transfer of assets after receipt of required regulatory and legal approvals.

* Michael Roemer, Barclays Plc's chief compliance officer, is leaving the bank to take up the same post at U.S. lender Wells Fargo & Co.

* British banks and building societies are cutting back their supply of unsecured credit to consumers following repeated warnings from the Bank of England about surging debt levels, The Times reported. A report by the BoE found that the availability of unsecured credit declined in the past three months — its fastest pace since 2009 — and that lenders surveyed by the central bank aim to rein in lending further toward the end of the year, The Daily Telegraph noted.

* BoE Chief Economist Andy Haldane has warned against reversing financial regulations introduced after the global financial crisis in the name of promoting economic dynamism, saying such a move would risks a repeat of past regulatory mistakes, Reuters reported.

* Man Group Plc reported funds under management of $103.5 billion as of September-end, compared to $95.9 billion at the end of June. Net inflows amounted to $2.8 billion in the quarter ended Sept. 30, which it said was driven by strong inflows into alternative risk premia and emerging market debt strategies.

* S&P Global Ratings revised the outlook on Lloyd's of London to negative from stable on expectations of further major losses from Hurricane Maria and other potential catastrophe events in the fourth quarter in addition to the £3.3 billion of losses Lloyd's already said it expects to book from hurricanes Harvey and Irma.

* Hyperion Insurance Group Ltd. has mandated Morgan Stanley to explore potential interest from financial investors for a minority stake in the company, in a deal that could value the British insurer at more than £1 billion, sources told Reuters.

* Aviva Plc unit Aviva International Holdings Ltd. is selling its entire 49% in joint venture First-Aviva Life Insurance Co. Ltd. to Taiwan's First Financial Holding Co. Ltd.

GERMANY, SWITZERLAND AND AUSTRIA

* Austria's Constitutional Court upheld a contested law obliging UniCredit Bank Austria AG to pay the full €790 million costs for shifting 3,300 staff into the state pension system to save costs, and not just €240 million it had originally planned to pay, Die Presse reported. Parent firm UniCredit SpA said the ruling will not affect its results, Reuters noted.

* BAWAG PSK's books are already covered for its listing, which is set to be the biggest IPO in Austria's history, Reuters reported.

* The German Finance Ministry reiterated that it was not under time pressure to offload the state's stake in Commerzbank AG, Reuters noted.

* HSH Nordbank AG CEO Stefan Ermisch told WirtschaftsWoche that he expects offers for the whole of the ailing lender and not just for parts of its business, noting that an "economically sensible solution" was "very close."

* Vontobel Holding AG's asset management arm is merging its thematic investing and sustainable investing units into a new segment with AUM of about CHF10 billion.

* Notenstein La Roche Privatbank AG named Patrick Fürer CEO, effective Oct. 23. Fürer, currently the Swiss lender's chief of operations and finance, replaces Adrian Künzi, who is leaving after six years at the bank.

* Maerki Baumann & Co. AG appointed Gérard Piasko as chief investment officer, effective Jan. 1, 2018. Piasko most recently served at the Swiss unit of Deutsche Bank.

FRANCE AND BENELUX

* AXA Investment Managers SA CEO Andrea Rossi confirmed to staff that AXA has been approached by several players interested in a potential transaction with the asset management arm, but stressed that AXA IM remained one of the group's strategic assets, Reuters reported.

* Dutch insurer ASR Nederland NV has successfully raised €300 million with the first issue in the European insurance sector of a contingent convertible bond denominated in euros, Het Financieele Dagblad reported. The perpetual restricted Tier 1 contingent convertible notes pay a fixed interest rate of 4.625%, resettable after 10 years.

* Outgoing Dutch Finance Minister and Eurogroup President Jeroen Dijssebloem will temporarily join the European Stability Mechanism as a strategic adviser once he leaves his ministerial post, Het Financieele Dagblad reported.

* Argenta Spaarbank NV has given up its plans to expand its agencies in the Walloon areas of Belgium, and said it will target the area for digital bank expansion instead, L'Echo reported.

SPAIN AND PORTUGAL

* S&P Global Ratings said the political dispute between Madrid and Catalonia is unlikely to lead to rating downgrades for Spain, though the autonomous region remains vulnerable. The agency warned, however, that a sharp slowdown in the Catalan economy caused by escalating political tensions could put downward pressure on the ratings of some 40 rated Spanish companies.

* AXA unit Axa España has resolved to move the headquarters of life insurance and pensions divisions Axa Vida and Axa Pensiones to Bilbao from Barcelona amid the current Catalan independence movement.

* Novo Banco SA sold one third, or 36.65%, of its participation in IT solutions company Vortal to Vallis Capital Partner, as part of the bank's strategy to get rid of nonstrategic assets, Jornal de Negócios reported.

ITALY AND GREECE

* Banca Carige SpA said it was confident its debt swap would go through after preliminary results showed bondholders tendered €455 million of the notes out of a maximum €510 million subject to the offer, an acceptance rate that indicated bondholders were likely to approve mandatory conversion of the bonds at upcoming meetings, Reuters reported.

* Banco BPM SpA will evaluate next week offers received from Società Cattolica di Assicurazione -Società Cooperativa and Covéa for the establishment of two bancassurance joint ventures, MF said, adding that the offers are seen valuing 100% of the two JVs at about €1.1 billion to €1.2 billion.

* Binding offers for a €1 billion nonperforming loan portfolio being sold by the bad bank set up to house the bad loans of Banca delle Marche SpA and three other small-sized lenders bailed out at the end of 2015 are due Oct. 16, Il Sole 24 Ore reported, adding that the bad bank is also said to be planning €1.5 billion to €2.5 billion of an NPL securitization deal backed by state guarantees.

* Banca Popolare di Bari SCpA is financially solid, Italy's Economy Ministry said in response to a request from a member of Italy's parliament seeking information following reports that a judicial investigation uncovered significant losses at the bank, MF wrote.

* Italy's central bank would like strong management to guide the cooperative lending holding companies to be set up under Iccrea Banca SpA and Cassa Centrale Banca Credito Cooperativo del Nord Est SpA, Il Sole 24 Ore said. Bankers Fabrizio Viola and Roberto Nicastro have been rumored as possible candidates to lead the two groups.

NORDIC COUNTRIES

* The Finnish government has proposed to give the country's FSA the opportunity to increase the capital requirements for the country's banks by between one percentage point and five percentage points, Affärsvärlden reported, citing Bloomberg News.

* The Swedish public prosecutor has asked for the arrest of the CEO and founder of pension company Allra, Alexander Ernstberger, Expressen reported. He is suspected of gross breach of trust, and could risk up to six years in prison if found guilty.

* Norway-based Komplett Bank ASA plans to launch an IPO by the end of this year, Dagens Næringsliv reported. The bank said that it will make a capital increase of between 400 million Norwegian kroner and 500 million kroner.

* Finland's Sampo Oyj has acquired 7.6% of the shares in Swedish bank Nordax Group AB (publ), Realtid reported.

EASTERN EUROPE

* TCS Group Holding Plc acquired a 55% stake in online payments solutions developer CloudPayments. The group will also have the right to acquire the remaining shares of the company within two years. Financial details of the deal were not disclosed.

* Russia's central bank established that PAO AK Bars Bank trader Artem Lyulinsky was involved in market manipulation activities between 2011 and 2016, earning 77 million Russian rubles on the transactions, but the losses for Ak Bars Bank stemming from his activates could have been two or three times higher, Vedomosti reported.

* Czech central bank board member Vojtech Benda told Hospodarske Noviny that the Czech economy is slightly overheated therefore it would benefit for an interest rate increase by 50 to 75 basis points by the end of 2017. The central bank's main rate is now at the level of 0.25%.

* The privatization agency of Bulgaria's capital Sofia will hold a one-stage tender to sell a 67.6% stake in Municipal Bank Plc, hoping to get at least 45.65 million Bulgarian leva from the sale, SEENews reported.

* Kazakhstan-based Bank RBK JSC and JSC Qazaq Banki have decided to abandon their merger plans.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: US urges World Bank to inspect China lending; 3 Iranian banks eye India branches

Middle East & Africa: World Bank cuts SSA growth outlook; Bank Muscat's 9-month profit drops 4.9%

Latin America: Brazil warns against initial coin offerings; Chilean banks eye perpetual bonds

North America: JPMorgan Q3 net income up 7.1%; BofA signs Paris lease

North America Insurance: Trump executive order expected today; Medica suit over Minn. contracts dismissed

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Danske Bank denies anti-Israel bias after being added to Colorado blacklist: Colorado is the latest U.S. state to add a European bank to a list of companies in which its pension fund is banned from investing for alleged anti-Israel bias. But Danske Bank, also blacklisted in New York, says it has not singled out Israeli firms.

New HSBC CEO 'will not rock the boat': Incoming HSBC CEO John Flint, who will take over from Stuart Gulliver when he retires in February 2018, is perceived to be a safe pair of hands, analysts said.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Sheryl Obejera, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Brian McCulloch, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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