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ASR to launch IPO, but AIB's delayed; banks draw ECB dollars; UBS hires Blessing

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


ASR to launch IPO, but AIB's delayed; banks draw ECB dollars; UBS hires Blessing

Banks draw dollarsfrom ECB: Two unidentified banks took out $1 billion from the ECB throughthe central bank's weekly U.S. dollar auction yesterday, Reuters reports.Dealers said the two lenders might have found it hard to source dollars morecheaply on the market because of their lack of good collateral. The transactionfollowed a $1.2 billion drawdown by a single bank on April 27, but dealers saidthe trend is not necessarily evidence that one or more banks in the eurozoneare struggling to raise dollars, as was the case in 2008 and 2011.

* Deutsche BankAG, BarclaysPlc and UBS GroupAG have each decided to terminate between 20,000 and 35,000customer accounts in their corporate and investment banking divisions, insiderstellthe Financial Times. Accounts wereclosed either because they became unprofitable or because they were consideredtoo risky under regulations against money laundering. The moves followedsimilar actions by other global lenders, including .

* Shareholders of the European Bank for Reconstruction and Development electedSuma Chakrabarti to a second four-year term as head of the lender, Reuters reports.Chakrabarti, who defeated Polish central banker Marek Belka, urged theretention of the lender's presence in Russia, where the EBRD suspended newlending after the west imposed sanctions over the Ukraine crisis. RussianDeputy Finance Minister Sergei Storchak described the freeze as"politicized" and "discriminatory."

UK AND IRELAND

AIB IPO likelydelayed: Irish Finance Minister Michael Noonan said yesterday that thegovernment's planned sale of a 25% stake in Allied Irish Banks Plc is more likely to take place inthe first half of 2017 than in the last quarter of 2016, Reuters reports.The global market turmoil made the original plan to float a portion of thelender this year unlikely, the IrishIndependent notes.

* Policymakers at the Bank of England are expected to leavethe base rate at a record low 0.5% when they meet today, Bloomberg News writes.The central bank is also expected to provide an update on how a possible Brexitis affecting the economy. Meanwhile, Chancellor George Osborne saidthe Treasury and the BoE are drawing up contingency plans to ensure thestability of the financial markets should Britain vote to leave the EU.

* Elsewhere, the Irish government is encouraging ,Royal Bank of Scotland GroupPlc and other banks based in the U.K. to relocate their trading andsupport staff to Ireland in the event of a Brexit, Bloomberg writes.

* U.K. Prime Minister David Cameron plans to extendthe criminal offense of "failure to prevent" to other economic crimessuch as fraud and money laundering. Writingfor The Guardian, Cameron said theplan is meant to hold firms accountable for criminal activities that take placewithin them.

* A former Barclays Plc banker pleaded guilty in 2014 to a chargerelating to the manipulation of LIBOR, Sky News reports.Peter Johnson's guilty plea was made public after the judge in the trial offive other former Barclays employees lifted a ban on its publication. TheGuardian and Reutersalso have reports.

* LloydsBanking Group Plc faces protests from employees after it namedformer HBOS manager Harry Baines to oversee the group's £30 billion pensionscheme, the Financial Times writes.

* Baltic Exchange Chairman Guy Campbell said yesterday thattalks between the bourse and a number of potential buyers are continuing,Reuters reports.The exchange wants any potential buyer to avoid undermining its central role inshipping.

GERMANY, SWITZERLANDAND AUSTRIA

UBS hiresBlessing: UBS GroupAG namedformer Commerzbank AGCEO Martin Blessing president of personal and corporate banking and presidentof UBS Switzerland, effective Sept. 1. He succeeds Lukas Gaehwiler, who willbecome chairman of the Switzerland region.

* ZurichInsurance Group Ltd. reportedfirst-quarter net income after tax attributable to shareholders of $875million, down from $1.22 billion a year ago. The general insurance combinedratio was 97.7%, up 1 percentage point from the year-ago period but animprovement compared to the 103.6% figure for full year 2015.

* Swiss LifeHolding Ltd.'s first-quarter gross written premiums fell10% on a yearly basis to CHF6.68 billion from CHF7.39 billion. Income from feesand commission rose to CHF332 million from CHF316 million, supported by growthin unit Swiss Life Asset Managers, which achieved CHF2.3 billion in net newassets under its third-party asset management. The company expects a netinvestment yield of at least 3% for full year 2016, it said.

* Michael Reuther, Commerzbank's head of corporates andmarkets, tellsGermany's Bild newspaper that thelender will stop carrying out so-called cum/cum trades, which allow foreigninvestors to avoid paying a German tax on dividends, because they are "nolonger socially accepted." Commerzbank has drawn widespread criticism forthe practice.

* UniCreditBank Austria AG is set to cut more than 2,000 jobs in Austria by2018, Die Presse reports,citing a document from Italian labor union First Cisl.

* The Swiss government yesterday agreedon a final version of new too-big-to-fail bank rules. The law, which goes intoeffect July 1, includes a requirement for a 5% going concern leverage ratio forUBS and Credit Suisse GroupAG, the country's two biggest banks. They also face a going concerncapital requirement of 14.3% of risk-weighted assets, with both figuresrepeated on a gone-concern basis.

* DeutscheBörse AG CEO Carsten Kengeter yesterday voiced confidence that thegroup will gain all necessary regulatory approvals for its merger withLondon Stock Exchange GroupPlc, Reuters says.

FRANCE AND BENELUX

ASR set tolaunch IPO?: Sources tellBloomberg News that ASR NederlandNV is planning to file an intention to float tomorrow, kicking offthe IPO of the nationalized insurer.

* CréditAgricole SA reportedfirst-quarter net income group share of €227 million, down year over year from€784 million. The bank booked a €399 million net charge to reflect the impactof the project to simplify CréditAgricole Group's structure.

* KBC GroupNV reportedfirst-quarter net profit attributable to equity holders of the parent of €392million, down from €510 million in the first three months of 2015. Impairmenton loans and receivables fell to €4 million from €73 million.

* AEGONNV reportedfirst-quarter consolidated net income attributable to equity holders of €143million, down year over year from €289 million. Underlying first-quarter pretaxearnings amounted to €462 million, up from €432 million in the first quarter of2015, as higher earnings from Europe more than offset lower earnings from theAmericas.

* French Finance Minister Michel Sapin has summoned chairmenof French banks named in the Panama Papers, Reuters reports.Sapin said "it would not be tolerable" if the banks indeed allowedfraud, money laundering and tax evasion. LeMonde yesterday publishedthe number of active offshore companies set up by Mossack Fonseca for clientsof French financial institutions. At the end of 2015, had 71 left;BNP Paribas SA six,Crédit Agricole 54 and CréditMutuel Group 11.

* The French government agreed at the beginning of April tostick to the status quo regarding the evolution of the capital of , sources tellLes Echos. The government finds ittoo risky for the public sector to endorse the project supported by PhilippeWahl, La Poste chairman and CEO, to set up a large financial public institutionby increasing its stake in CNP Assurances through .

* Eight employees of insurer , including CEO BernardThiry, may have to appear in criminal court in a case of suspected insurancefraud, De Tijd writes.Anonymous letters to court have led to three investigations into politicianStéphane Moreau over a 2010 property claim in which he appears to have takenout a policy after the damage occurred.

* Dutch regulators agreed to ease the bank-like capitalrestrictions they imposed on Euronext NV in June 2014, paving the way for theexchange operator to pursue M&A, FinancialNews writes.Euronext is due to release a new strategic plan tomorrow.

SPAIN AND PORTUGAL

Liberbank Q1net interest income falls YOY: Liberbank SA reported first-quarter attributable net profit of €38million, down from €57 million in the same period of 2015, as net interestincome slid 10.2% year over year to €116 million, while net provisions totaled€102 million, up from no charge in the first quarter of 2015. Net impairment onfinancial assets also rose, to €70 million from €50 million.

* The Bank of Spain will reduce its provisions for lawsuitsconnected to BankiaSA's IPO and BancoGallego SA after several rulings in its favor, Expansión reports.The bank's provisions will be €40 million lower because Bankia will nowreimburse retail investors for their losses in its ill-fated public offering. Inthe case of Banco Gallego, minority shareholders launched lawsuits after thebank was sold for €1 to Banco deSabadell SA.

* Spanish banking foundations received a total of €513million in dividends charged to 2015 accounts from the banks belonging to theirgroups, Expansión writes.La Caixa received €320 million, more than double the €150 million obtained inthe previous year.

* Portugal's Banco de Investimento Global SA formally launchedoperations in Mozambique yesterday, with CEO Carlos Rodrigues saying at anopening ceremony that rapid economic growth in recent years justified foreigninvestment in the country, DiárioEconómico reports.

ITALY AND GREECE

Generaliapproves new management structure; Q1 profit falls YOY: Generali today reporteda first-quarter net result attributable to the group of €588 million, comparedto the year-ago €682 million. Group CFO Alberto Minali said the result wasachieved on the back of significant losses at equities markets and record-lowinterest rates. The insurer's board of directors yesterday approveda new organizational structure that includes the creation of a new functionconsolidating responsibilities for the existing global business lines unit and theEMEA, Asia and Americas regions. Frédéric de Courtois, who has been CEO ofAXA in Italy since2007, will head the new global business lines and international division.

* Restoring Greek banks' access to the ECB's refinancinglines could be on the agenda of the June 2 meeting of the central bank'spolicymakers, insiders tellBloomberg News. The ECB board could propose a new waiver on Greece's junk-rateddebt if a staff-level deal between the government and its creditors were to bereached.

* BancoPopolare Società Cooperativa will present its merger plan withBanca Popolare di MilanoScarl on Monday and kick off its capital increase May 30, MF reports.Popolare di Milano CEO Giuseppe Castagna tellsIl Sole 24 Ore that the recent sharpfalls in the banks' share prices will not affect the share exchange ratio inthe merger, which has already been set.

* Italy's Atlante fund may need to be strengthened withadditional resources after already having raised €4.25 billion, FinanceMinister Pier Carlo Padoan toldBloomberg Television. Meanwhile, the fund could be involved in the juniortranche of a €600 million BancaPopolare di Bari SCpA securitization under a government-backed guaranteescheme, MF writes.

* Banca IFISSpA is close to the purchase of GE Capital Interbanca SpA from General Electric, beatingrival offers from Lone Star, Apollo and Credito Valtellinese SC, Il Sole 24 Ore writes.

NORDIC COUNTRIES

Nykredit Q1profit up YOY: NykreditRealkredit A/S reportedfirst-quarter group net profit of 705 million Danish kroner, up from 686million kroner in the same period in 2015. First-quarter income from corebusiness declined on a yearly basis to 2.79 billion kroner from 3.05 billionkroner.

EASTERN EUROPE

PZU Q1 profitdrops YOY: PZU SAreportedfirst-quarter IFRS net profit attributable to equity holders of the parentcompany of 486.6 million Polish zlotys, down from 941.3 million zlotys in theyear-ago period. Gross written premiums rose to 4.80 billion zlotys from theyear-ago 4.68 billion zlotys.

* RaiffeisenBank International AG CFO Martin Grüll indicated that the group mayexclude foreign-currency loans in the planned disposal of its Polish arm,similar to what General Electric Co. did to overcome regulatory hurdles in thesale of Bank BPH SA,Bloomberg News reports.

* There is no offer for Asya Katilim Bankasi AS for the moment, Hurriyet reports,citing Sakir Ercan Gul, the head of Turkey's Savings Deposit Insurance Fund. Thelender will be liquidated if the fund cannot find a buyer by the end of May. Alawyer for shareholders of the lender said there are still pending legal casesabout its seizure and that any sale carried out before those are resolved wouldbe inappropriate.

* Turkey will host an Islamic "megabank" within ayear, Mehmet Simsek, Turkish deputy prime minister for economic and financialaffairs, told reporters, accordingto Anadolu Agency. Simsek said Turkey has been in contact with the IslamicDevelopment Bank to found a megabank in Turkey, adding that Indonesia has asimilar request.

* The Russian central bank carried out limited sales ofdomestic treasury bonds from its portfolio in April and May to manage liquidityin the banking sector, Vedomostiand Reutersreport. This is the first time the regulator used this instrument since 2011, Vedomosti notes.

* The Russian government has amended requirements for banksin which state companies and other government-related entities are allowed tokeep their funds, Kommersant writes. A minimum capitalrequirement for such banks has been increased to 25 billion rubles, whilelenders affected by sanctions, as well as systemically important banks, includingforeign-owned  Rosbank, Raiffeisenbankand UniCredit Bank, will also be allowed to hold deposits and funds ofstate-related companies.

IN OTHER PARTS OF THEWORLD

* Fitch Ratings upgraded Argentina's long-term foreign currency issuerdefault rating to B from RD following the resumption of the country's debtpayments with restructured bondholders.

* Brazil's Senate spent hours debating over a vote onwhether to send President Dilma Rousseff for a full impeachment trial, whichwould result in her suspension from office, BBC News reports.Seventy-one of the 81 senators registered to speak for up to 15 minutes, with45 having spoken as of 12:35 a.m. local time.

* The Organisation for Economic Co-operation and DevelopmentsaidBahrain, Lebanon, Nauru, Panama and Vanuatu have now committed to sharefinancial account information automatically with other countries in a bid tofight tax evasion. Argaam reportsthat Bahrain and Portugal signed an agreement to avoid double taxation andmoney laundering.

NOW FEATURED ONS&P GLOBAL MARKET INTELLIGENCE

Volatilemarkets hit Allianz's solvency and profits: Markets hit Allianz'sSolvency II capital in the first quarter.

ABN AMROkeeping an eye on possible 'Basel IV' capital impact: Withfirst-quarter profit hit by lower fee income and higher regulatory levies, theDutch bank is focused on reducing costs while preparing for possible regulatorycapital changes.

Munich Re CFOdefends profit forecast cut, insists ERGO restructuring will payoff: Munich Re CFO Jörg Schneider on May 10 defended the company'sdecision to cut its 2016 profit forecast to €2.3 billion from between €2.3billion and €2.8 billion.

Concerns overcapital, asset quality remain at UniCredit: CEO Federico Ghizzoniexpressed confidence as he was queried by analysts about capital and assetquality.

Rich Lovie, Ed Meza,Stephanie Salti, Praxilla Trabattoni, Chantal Groothengel, Beata Fojcik, HelenPopper, Mike Hatzidakis, Gerard O'Dwyer, Yael Schrage and Ali Kayalarcontributed to this report.

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