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Danske saga rumbles on; UBS warns about Q3 revenue; Santander expects Brexit hit


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According to Market Intelligence, April 2023

Danske saga rumbles on; UBS warns about Q3 revenue; Santander expects Brexit hit

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.

Danske scandal

* Danske Bank A/S' share price fell 11.9% during the week on a wave of bad news. CEO Thomas Borgen left with immediate effect Oct. 1, having said in September he would serve until a successor was appointed. Jesper Nielsen was named interim CEO, but is not a candidate for the permanent role.

* The Danish lender could face fines of up to $9 billion in a worst-case scenario as punishment for suspicious transactions that flowed through its Estonia branch, Morgan Stanley said in a research report.

* Denmark's Financial Supervisory Authority ordered it to further increase its capital buffers, while the U.S. Justice Department is also conducting a criminal probe in the case.

* And the Financial Times reported that Danske handled as much as €8.5 billion of so-called mirror trades for Russian customers in a year, further depressing its shares Oct. 5.

Brexit news

* Banco Santander SA warned that Britain's imminent departure from the EU will likely precipitate a period of high uncertainty that could have an adverse material effect on its operating results, financial condition and prospects.

* The European Securities and Markets Authority called for tougher regulation of investment companies and funds based in so-called third countries outside the EU — e.g. the U.K. after Brexit — and offering services to investors in the EU.

* The U.K. Financial Conduct Authority will resist attempts to push for excessive financial deregulation post-Brexit, Chairman Charles Randell said.

* Paris is emerging as the preferred financial trading hub for continental Europe post-Brexit, as Bank of America Corp., JPMorgan Chase & Co., BlackRock Inc., Morgan Stanley and HSBC Holdings PLC prepare to move their EU operations to the French capital from London, the Financial Times reported.

* London Stock Exchange Group PLC-owned LCH Ltd. said it will close customer positions after 90 days' notice if a trade deal between the U.K. and EU is not inked by December, four people in touch with the clearing house told the FT.

On the deal table

* Banca Monte dei Paschi di Siena SpA could announce a deal with U.S.-based private equity firm Warburg Pincus LLC over the sale of its Belgian unit Banca Monte Paschi Belgio SA for nearly €50 million, Bloomberg News reported, citing people with knowledge of the matter.

* Schroders PLC may overtake BlackRock Inc. to clinch the mandate of Lloyds Banking Group PLC's £109 billion asset portfolio after the U.K. firm offered the British bank a stake in unit Cazenove Capital Management Ltd., insiders told the Financial Times.

* VTB Bank (PJSC) closed its acquisition of an 85% stake in Vozrozhdenie Bank from Bonum Capital (Cyprus) Ltd. following the receipt of all regulatory and supervisory council approvals.

Executive appointments

* Groupe BPCE named Stéphanie Paix deputy CEO in charge of the group's general inspection and Geraud Brac de La Perrière as head of risks for the group. The group also appointed Dominique Garnier and Christine Fabresse to its management committee.

* Credit Suisse Group AG Managing Director Lothar Cerjak left after almost 25 years at the bank to join Bitcoin Suisse AG, a Zug-based financial services firm that specializes in crypto-assets.

* BNP Paribas SA appointed Yann Gérardin to the post of group deputy COO in charge of corporate and institutional banking, effective Oct. 1, and Alain Papiasse as chairman of corporate and institutional banking.

In other news

* UBS Group AG's third-quarter revenue from transactions is "clearly under pressure," according to CEO Sergio Ermotti, Reuters reported. UBS is set to release its third-quarter results Oct. 25.

* A Spanish court will probe CaixaBank SA's 2017 takeover of Portugal's Banco BPI SA, after two unidentified shareholders filed a lawsuit against the Spanish lender, accusing it of insider trading and improper management, Reuters reported, citing court documents.

* The ECB gave Piraeus Bank SA until the end of 2018 to raise roughly €500 million in capital by selling Tier 2 bonds as part of a plan agreed with the Single Supervisory Mechanism, Bloomberg News reported, citing people with knowledge of the matter. The bank said shortly thereafter that it would aim to issue such a bond, a development that came after its shares fell nearly 30% at one point in Oct. 3 trading.

* U.S. authorities might impose a $1.5 billion penalty on Standard Chartered PLC for allegedly allowing customers to violate sanctions on Iran at least five years ago, Bloomberg News reported.

* A senior official of the European Court of Justice said the European Central Bank's quantitative easing program does not violate the central bank's mandate, the Financial Times reported.

* The ECB working group on euro risk-free rates said wants to delay the implementation of the new euro short-term rate, or Ester, which will replace the existing euro overnight index average, or Eonia.

Featured during the week on S&P Global Market Intelligence

Cyberrisk biggest threat to banks since 2008 crisis, says FCA chief: Data protection and the resilience of systems have taken on unprecedented importance, U.K. Financial Conduct Authority CEO Andrew Bailey said, given customers' increasing use of technology.