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UBS revises targets as FY'19 profit falls; JPMorgan speeds up Brexit plans


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UBS revises targets as FY'19 profit falls; JPMorgan speeds up Brexit plans

* Global shadow banking assets shrank for the first time in a decade, to US$183.7 trillion in 2018, in part due to stock market declines, which reduced the value of assets held by investment funds globally, according to the Financial Stability Board. Lending by nonbank financial intermediaries continued growing in 2018, up 3% from the previous year, driven by the euro area.

* European Ombudsman Emily O'Reilly has launched an investigation into the appointment of Adam Farkas, former executive director of the European Banking Authority, as the new CEO of the Association for Financial Markets in Europe. The move, announced in September last year, triggered a backlash from European Parliament members who were concerned about a conflict of interest.

* French central bank Governor François Villeroy de Galhau said the ECB must incorporate climate risk into its lending rules and economic models instead of merely buying green bonds, Reuters wrote. Meanwhile, the Bank for International Settlements said central banks cannot be expected to save the world from climate change, pushing instead for global coordination in financial regulation and government policy, the news agency reported.

* The European Commission proposed settlement procedures for future disputes between the U.K. and the EU, under which London could lose preferential access to the European market or be slapped with fines if it breaches the terms of a post-Brexit deal with the bloc, the Financial Times reported.


* Lloyds Banking Group PLC vowed to cut carbon emissions linked to its loan portfolio by more than half over the next decade, the FT reported, citing Fiona Cannon, the lender's group director of responsible business. Lloyds also said it will boost lending to businesses such as renewable energy generators and introduce new products such as green mortgages.

* Lloyds suspended legal action against former customer Trevor Mealham after facing pressure from outgoing U.K. Financial Conduct Authority head Andrew Bailey to delay cases against small business owners until a new redress scheme has considered them, The Times reported.

* Spencer Lake, HSBC Holdings PLC's former vice chair of global banking and markets, has partnered with former executives of British technology investment firm NEX Opportunities to launch a fund of up to £125 million called Element Ventures, which will invest in new financial technologies, an insider told Financial News.

* Paul Mainwaring will retire as CFO of British online trading platform IG Group Holdings PLC, with his departure date to be announced in due course. The group said it has begun to search for Mainwaring's successor with help from an external search firm.

* French bank Natixis expects funds to return to affiliate H2O Asset Management after concerns on some of the company's thinly traded bonds led to significant outflows in 2019, Bloomberg News reported, citing Natixis Investment Managers International SA CEO Jean Raby.

* Irish bank AIB Group PLC named former Tesco Ireland executive Geraldine Casey as its new chief people officer, bringing the number of women on its executive committee to five, equal to the number of men, Irish Independent reported.


* UBS Group AG reported fourth-quarter 2019 net profit attributable to shareholders of $722 million, up from $315 million a year earlier, while full-year 2019 attributable net profit declined year over year to $4.30 billion from $4.52 billion. The Swiss banking group also outlined new targets for 2020-2022, including a return on common equity Tier 1 capital of 12% to 15%, a cost-to-income ratio of 75% to 78%, pretax profit growth in global wealth management of 10% to 15%, a CET1 ratio of approximately 13% and a CET1 leverage ratio of roughly 3.7%.

* Meanwhile, UBS agreed to sell a 51.2% majority stake in asset management unit UBS Fondcenter to Deutsche Börse AG's post-trade services provider Clearstream for an undisclosed amount.

* Commerzbank AG plans to strengthen its corporate banking business in Europe and will hire 150 new staff to expand with tailored financing services for companies in France, northern Italy and Austria and later on in Belgium, the Netherlands and Spain, wrote.

* German prosecutors said six former bankers accused in cum-ex trade fraud made nearly $33 million in bonuses from the alleged fraud. The prosecutors did not reveal the identity of the accused or name the bank they worked for, but prosecutors previously filed charges against six former bankers of the now-defunct Maple Bank GmbH, according to reports.

* According to German financial regulator BaFin, small and medium-sized banks, savings banks and all other financial institution that are classified as less significant must comply with a core Tier 1 capital ratio of around 13.15% in the future, up from 12.2% two years earlier as a result of last year's stress test, Börsen-Zeitung wrote.

* Vienna's commercial court sentenced Erste Group Bank AG for several illegal passages in its general terms and conditions, saying that 15 out of 18 clauses for the bank's online banking service as well as for savings books and deposit boxes were impermissible, Die Presse wrote, adding that Erste Bank will appeal.


* U.S. bank JPMorgan Chase & Co. has purchased a second building in Paris in a bid to transfer more employees from its euro-related trading operations from London due to Brexit, the FT reported, citing Kyril Courboin, the lender's head of France. Courboin said London, which hosts 10,000 of the bank's employees, will continue to serve as its regional hub for trading activities not denominated in euros.

* French central bank Governor François Villeroy de Galhau confirmed yesterday that the profit-sharing provision could be taken into account in the calculation of the solvency ratio of insurers, in order "to bring French practice in line with that of the other countries concerned, particularly Germany," Les Echos wrote.

* The National Bank of Belgium has very recently taken the view that the conditions were now met for granting a banking license to NewB, the cooperative launched in 2011 in the wake of the banking crisis, sources told L'Echo.

* Rabobank is part of a consortium including Goldman Sachs investing £7.5 million in British online mortgage broker Trussle, Het Financieele Dagblad wrote. Rabobank has reportedly invested €150 million in the broker. Meanwhile, fellow Dutch bank ABN AMRO Bank NV has invested for the second time in Swedish financial technology company Tink, Het Financieele Dagblad also reported.

* ING Groep NV will no longer use external investment funds in a bid to cut costs, according to Het Financieele Dagblad. The bank has launched the new Select Fund which should reduce asset management costs by up to 0.4% per year.


* Portugal's central bank said it has asked local lender EuroBic, formerly known as Banco BIC Português SA, about transfers between Angola and Dubai related to Angolan billionaire Isabel dos Santos after media reports revealed files focused on alleged financial schemes used by dos Santos to build her business empire, Reuters reported. Dos Santos, who indirectly owns 42.5% of Eurobic, said the allegations against her were completely unfounded.

* The European Investment Bank and Banco Bilbao Vizcaya Argentaria SA agreed to facilitate €600 million to Spanish SMEs and midcaps. Under the deal, the country's second-largest banking group agreed to grant €300 million through a risk-sharing financing agreement, a first of its kind between the two entities, Europa Press reported.

* Spanish lender CaixaBank SA has begun applying artificial intelligence to its Virtaula online employee training platform to tailor courses for individual employees, according to Finextra.


* Italian interbank deposit fund FITD is looking for a general manager for Banca Popolare di Bari SCpA, with bankers Fabio Innocenzi and Fabrizio Viola seen as possible candidates, according to MF. FITD could also reportedly seek a replacement for current CFO Luigi Jacobini, the son of former Popolare di Bari Chairman Marco Jacobini.

* The European Commission is expected to give its verdict in early February on plans for Banca Monte dei Paschi di Siena SpA to sell €11 billion to €12 billion in nonperforming loans to a bad bank managed by state-controlled bad loan manager AMCO, MF wrote.


* Norwegian Finance Minister Siv Jensen said she will resign from government along with her right-wing Progress Party following a cabinet decision to help a woman suspected of being affiliated with the Islamic State return home to Norway, Reuters wrote.

* Allan Aaskov, Lollands Bank A/S' newly appointed CEO, plans to focus on expanding the Danish lender's product offering while extending its reach regionally in a bid to grow its customer base, FinansWatch reported.


* Moody's said the Turkish central bank's credibility will likely be harmed by the country's new negative real interest rates, which also risks hurting investor confidence and amounts to a credit negative for banks' funding, Reuters reported.

* Tatiana Orlova, who was recently appointed first deputy chair of the management board at Russia-based JSC JSCB International Financial Club, plans to acquire a stake worth 2 billion rubles at the lender. She also intends to divest her stake in PJSC Transkapitalbank, which amounts to around 10%, according to Kommersant.

* PJSC Moscow Exchange MICEX-RTS unit MOEX Innovations increased its holding in bank guarantees and factoring services provider Digital Partners to 12.5% from 1.41%, Vedomosti wrote. The companies will also launch a digital platform with factoring and other complex financial products.


Asia-Pacific: Hana Financial board OKs insurer buy; 3 Indian banks appoint heads

Middle East & Africa: NBK FY'19 profit up YOY; PE firm seeks controlling stake in Isracard

Latin America: Argentina tweaks Leliq auctions; Caixa plans management change at insurance arm


Shareholder lawsuits pile up against Danske Bank amid money laundering scandal: A growing number of lawsuits accuse Danske Bank of misleading investors and inflating the bank's share price by failing to inform the market about its money laundering shortcomings.

Declining rates raise specter of new mortgage renegotiation wave at French banks: The number of French borrowers renegotiating mortgages to take advantage of low interest rates has started rising again, leading to concerns about the long-term impact on banks' profitability.

Climate change could prompt 'green swan' event, next crisis, BIS executive says: Central banks will need to be more proactive in calling for broader and coordinated change to maintain financial and price stability over longer periods of time, according to the authors of a new report.

Deza Mones, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Stephanie Salti, Praxilla Trabattoni and Helen Popper contributed to this report.

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