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In This List

Barclays' Q3 loss; Commerzbank plan concern; Bank J. Safra Sarasin criminal case

Street Talk - Ep. 64: Coronavirus jumpstarts digital adoption

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Street Talk - Ep. 63: Deal talks continue amid bank M&A freeze, setting up for strong Q4

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Street Talk - Ep. 62: 'Brutal' outlook for oil demand offers banks in oil patch no relief

Amid Q1 APAC Fintech Funding Slump, Payment Companies Drove Investments


Barclays' Q3 loss; Commerzbank plan concern; Bank J. Safra Sarasin criminal case

* The ECB maintained the interest rate on the main refinancing operations and rates on the marginal lending and deposit facilities at 0.00%, 0.25% and negative 0.50%, respectively. Outgoing ECB President Mario Draghi said the benefits of negative interest rates to the economic performance of the euro area "more than offset" the negative impact on the banking sector. During his eight-year term, the ECB never hiked rates but made cuts eight times.

* Global cross-border bank claims totaled $31 trillion in the second quarter, up 6% year over year, marking the highest annual growth rate since the financial crisis, statistics from the Bank for International Settlements showed.

UK AND IRELAND

* U.K. bank Barclays PLC swung to an attributable loss of £292 million in the third quarter from a year-ago profit of £1.05 billion, hit by litigation and conduct costs rising to £1.57 billion from £105 million, largely due to hefty provisions for mis-sold payment protection insurance claims.

* U.K. Prime Minister Boris Johnson proposed a Dec. 12 general election if Brexit is postponed until Jan. 31, 2020. If lawmakers agree to an election, Johnson said his government will make as much time possible available for parliament to scrutinize his Withdrawal Agreement Bill. The House of Commons will debate and vote on the election proposal Oct. 28, according to Commons leader Jacob Rees-Mogg.

* The European Parliament's Conference of Presidents recommended that European Council President Donald Tusk accept Britain's request to delay Brexit until Jan. 31, 2020, to allow more time to examine the Withdrawal Agreement carefully. However, the extension could end earlier if the ratification and consent procedures for the bill are completed ahead of the deadline.

* Barclays retracted its decision to abandon a partnership with the Post Office after the plan drew flak from campaigners and members of parliament, the Financial Times reported. The partnership allows Barclays clients to withdraw money from branches of the Post Office.

* Andrew Bailey, head of the U.K. Financial Conduct Authority, called for more transparency in the risks related to nonbanking investments, to ensure people receive "clear meaningful" disclosures when making investment decisions. He noted that the Undertakings for Collective Investment in Transferable Securities, or UCITS, rules should be reformed and that the FCA should sometimes impose limits or bans on certain investments.

* Richard Pym plans to resign as nonexecutive chairman of AIB Group PLC and Allied Irish Banks PLC after the approval of the group's 2019 annual report in March next year. According to media reports, Pym is seen as a possible replacement for Metro Bank PLC's chairman, Vernon Hill, who has resigned. AIB, meanwhile, appointed Brendan McDonagh as its new deputy chair, effective immediately.

* Jeremy Masding will step down as CEO and a director of Irish bank Permanent TSB Group Holdings PLC next year. The effective date of his departure is yet to be decided. He plans to deliver an overhaul plan that includes closing branches and letting go of 10% to 15% of its workforce, industry sources told The Irish Times.

* CashEuroNet UK LLC, the biggest remaining payday lender in the U.K., will cease to operate by the end of the year largely due to what it called difficult regulatory conditions, the Financial Times wrote.

* Schroders PLC won the mandate to manage Woodford Patient Capital Trust plc, which Neil Woodford resigned from last week amid the collapse of his investment empire, news outlets including the Financial Times and City A.M. covered. Woodford Patient Capital Trust will be renamed Schroder UK Public Private Trust.

GERMANY, SWITZERLAND AND AUSTRIA

* Some top investors of Commerzbank AG, including Cerberus Capital Management LP, are concerned that the Frankfurt-based lender's recently unveiled strategy would not be enough to secure its future, insiders told Bloomberg News. The investors are reportedly opposing the new plan, saying the profitability target has been halved and the planned sale of Polish unit mBank SA is a mistake, among other concerns. Regulators are also said to be unconvinced that the new plan would be sufficient.

* Switzerland's federal prosecutor's office launched a criminal case against Basel-based Bank J. Safra Sarasin AG for its alleged involvement in a corruption and money laundering scandal surrounding Brazilian oil company Petrobras and construction company Odebrecht, Tages-Anzeiger reported.

* A U.S. court did not sentence two former Deutsche Bank AG traders — Matthew Connolly and Gavin Campbell Black — to serve prison time for their alleged involvement in rigging the London interbank offered rate, Reuters reported. Instead, Connolly and Black will serve home confinement for six and nine months, respectively.

* Negative interest rates in Switzerland do not serve their economic purpose anymore, after being in place for almost five years, as the economy has already recovered from the Swiss franc shock, with stable prices and the currency no longer overvalued, according to a study by the Swiss Bankers Association. The SBA noted that it is now time for the country to exit a crisis mode since negative rates adversely affect the economy and should remain "an extraordinary monetary policy measure" and not a "norm."

* Swiss bank UBS Group AG plans to introduce blockchain technology in its trading department in order to tokenize assets, beginning with loans and structured products, Finews wrote.

* Switzerland's Glarner Kantonalbank has concluded an 11-year responsibility claim against former banking executives and supervisory board members with a settlement and will receive CHF5 million from the defendants. The claim concerned the allegedly aggressive credit policy of the bank which led to losses in 2008.

FRANCE AND BENELUX

* Belgian cooperative bank Crelan NV will sign an agreement to buy the Belgian banking business of French insurance group AXA SA for €540 million in cash in a deal that will create the fifth largest Belgian bank, Belgian financial daily L'Echo reported. The sale also includes the transfer of Crelan's insurance arm to AXA.

* Paris-based reinsurer Scor SE saw its third-quarter consolidated net income group share rise 44.4% year over year to €115 million from €80 million. For the nine months to Sept. 30, the company's consolidated net income group share totaled €401 million, up from €342 million a year ago.

* The U.S. Financial Industry Regulatory Authority fined BNP Paribas Securities Corp. and BNP Paribas Prime Brokerage Inc., both units of French banking group BNP Paribas SA, some $15 million for shortfalls in their anti-money laundering systems and supervisory failures in over four years involving penny stock deposits and resales and wire transfers.

* A recent theft of data at Allianz Global Insurance has affected 2.3 million Dutch customers, De Tijd reported. Personal data including addresses and bank details could have fallen into the wrong hands, the German insurer said.

* ING Groep NV's Belgian division has told its workers' council it plans to close an additional 22 branches amid a decline in footfall, De Tijd reported.

* ING's CEO, Ralph Hamers, in an interview with Handelsblatt said the bank was interested in selected acquisitions in Europe in order to add specialized teams or new technologies.

* France-based Rothschild & Co. SCA has acquired Livingstone UK, a Livingstone Partners LLP entity based in the Britain, for an undisclosed sum, L'Agefi wrote. The Livingstone London team comprises 34 bankers specialized mostly in M&A and special situations.

SPAIN AND PORTUGAL

* Spain's Banco de Sabadell SA saw its third-quarter attributable net profit rise on a yearly basis to €251 million from €127 million, with provisions for nonperforming loans dropping to €124 million from €203 million.

* Major Portuguese banks Millennium BCP, Novo Banco SA and Caixa Geral de Depósitos SA wish to implement negative interest rates on deposits, in order to be able to compete with other European banks, Jornal de Negócios reported. However, the central banks has ruled out the possibility of interests below zero, saying current legislation does not allow for it.

* BNP Paribas Securities Services has acquired the depository business of Spain-based Mapfre Asset Management's investment vehicles, wrote Europa press.

ITALY AND GREECE

* Italian investment bank Mediobanca - Banca di Credito Finanziario SpA reported net profit of €270.6 million in the quarter ended Sept. 30, a 10.3% increase from €245.4 million a year ago.

* Italy-based Banca del Fucino SpA sold €202 million in nonperforming loans and €95 million in unlikely-to-pay loans to AMCO, the bad loan management group owned by Italy's Treasury, said MF.

* The CEO of BPER Banca SpA said the Italian bank aims to sell more than €1 billion in bad loans to cut its nonperforming exposure ratio to below 9% next year, a year earlier than the objective laid out in a three-year plan unveiled in February, Reuters reported.

* Italy faces resistance from EU authorities to its plan to cut bad loans at Banca Monte dei Paschi di Siena SpA, two sources close to the matter told Reuters. It wants to cut the bank's nonperforming loan ratio to 5% by spinning off around €10 billion of problem loans and merge them with assets of bad loan manager AMCO.

* Italy's parliament gave its initial approval to a decree that will protect Milan's Borsa Italiana stock exchange from foreign takeovers, said Reuters, noting that the exchange is considered strategic since it controls domestic government bond trading platform MTS. The bourse is owned by London Stock Exchange Group PLC, which recently saw off a takeover bid from Hong Kong Exchanges and Clearing.

NORDIC COUNTRIES

* The Swedish central bank maintained its repo rate at negative 0.25% but said it "will most probably" raise the rate to zero percent in December despite a slowing economy.

* The Norwegian central bank maintained its policy rate at 1.50% as economic growth and inflation conditions remained largely within expectations. Øystein Olsen, central bank governor, said the policy rate will "most likely remain at the present level in the coming period" based on rate-setters' assessment.

* Danish insurance group Topdanmark A/S posted third-quarter after-tax profit of 285 million kroner, down from the year-ago 459 million kroner. The company raised its after-tax profit forecast for the 2019 full year to a range of 1.30 billion kroner to 1.40 billion kroner, versus 1.25 billion kroner to 1.35 billion kroner previously.

* Finnish insurer Sampo Oyj will no longer focus on annually increasing its nominal dividend "with government bond yields expected to remain negative for some time to come," President and Group CEO Kari Stadigh said. The board will review the dividend policy in early February 2020.

* Danish pension group ATP has netted its highest ever third quarter return on investments, Politiken reported. Its investment portfolio generated a return of 36.9 billion kroner before costs and taxes.

EASTERN EUROPE

* The Ukrainian central bank lowered its key policy rate for the fourth time in 2019 to 15.5% from 16.5%, saying inflation is nearing its target. If inflation steadily declines to the target, the key policy rate could be lowered to 8% by the end of 2021, the central bank also noted.

* Poland-based Alior Bank SA expects its net earnings in the third and fourth quarter of 2019 will take a 147 million zloty hit due to the September ruling of the European Court of Justice regarding the proportional reimbursement of fees in case of early repayment of consumer loans, Rzeczpospolita wrote. The lender also plans to book a 57 million zloty provision in the third quarter for the reimbursement of fees linked to loans repaid before the ruling.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: China Vanke Q3 profit rises 31.64% YOY; HNA to transfer stake in US$3.6B project

Middle East & Africa: NCB, First Abu Dhabi post higher profits; Angola ups bank cash reserve ratio

Latin America: Chile's central bank cuts rate; Paraguay's central bank slashes growth forecast

North America: Aircastle exploring alternatives; US banks fear losing $88B in payments revenue

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Polish banks face drawn-out saga to resolve forex mortgages problems: Polish banks may not face a previously-predicted doomsday scenario regarding their exposure to foreign exchange home loans, but the issue will continue to be a cloud over the sector for several years to come, analysts say.

Commerzbank's sale of mBank set to attract 'huge interest' in Poland and beyond: As the German company prepares to put its profitable Polish subsidiary on the market for an estimated €2.1 billion, analysts expect strong interest from Polish and international lenders, despite the bank's exposure to controversial forex mortgages.

Question mark over NatWest Markets' future as it helps drag parent RBS to loss: The state-owned bank's troubled investment banking business was hit hard by volatile foreign exchange markets in the summer and is far behind performance targets with incoming CEO Alison Rose likely to put it under intense scrutiny.

Ben Meggeson, Arno Maierbrugger, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Stephanie Salti, Sophie Davies and Mariana Aldano 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.