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CYBG, Virgin Money announce £1.7B tie-up; Allianz considers large-scale M&A deal

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CYBG, Virgin Money announce £1.7B tie-up; Allianz considers large-scale M&A deal

* The Bank for International Settlements said macroprudential regulations introduced after the financial crisis should be extended to asset management funds that offer credit, known as shadow banks, and fintech firms. Existing macroprudential policy requires banks to have so-called countercyclical capital buffers.

UK AND IRELAND

* The board of Virgin Money Holdings (UK) PLC agreed to a roughly £1.7 billion takeover offer by CYBG PLC. Under the terms of the all-share deal, Virgin Money shareholders will receive 1.2125 new CYBG shares for each Virgin Money share.

* The U.K. Financial Conduct Authority will look into the application of new MiFID II rules rules that require asset managers to separate the cost of research from trading commissions and transaction costs, the Financial Times reported. The regulator is concerned about inconsistencies in the way the rules have been interpreted.

* London-based Life Company Consolidation Group agreed to acquire Equitable Life Assurance Society, the scandal-hit mutual life assurance company that came close to collapse in 2000. The deal has a price tag of £1.8 billion, the Financial Times reported.

* Microfinance firm ASA International said it intends to proceed with an IPO on the London Stock Exchange, with admission of the company's shares expected to occur in July. ASA International added that it aims for an initial dividend payout ratio of 30% of prior-year net income.

* Digital wallet provider London Block Exchange reached a deal with U.K.-based ClearBank Ltd. that will allow its domestic customers to trade digital currencies without moving funds overseas, insiders told Reuters.

* U.K. peer-to-peer lender Ratesetter is in discussions with potential backers for a £30 million funding round that is expected to value the company at roughly £280 million, insiders told Sky News.

* Bank of England executive Chris Salmon will join HSBC Holdings PLC in September as global chief control officer for global markets in the British firm's investment bank, Thomson Reuters' IFR reported, citing an internal memo to staff.

GERMANY, SWITZERLAND AND AUSTRIA

* Allianz Group is considering a large-scale acquisition, with RSA Insurance Group PLC, Aviva PLC, Zurich Insurance Group AG and QBE Insurance Group Ltd. potentially in the frame, The Sunday Times reported.

* German reinsurer Hannover Re is thinking of increasing its dividend payout ratio due to strong profitability over recent years, Reuters reported, citing the firm's CFO.

* HSH Nordbank AG posted a first-quarter group net loss attributable to shareholders of €104 million, mainly due to expenses related to its privatization. The German bank expects restructuring and privatization costs to continue to weigh on its 2018 results, with a projected pretax loss of roughly €100 million for the year, although it noted that this could change once the privatization is closed.

* RBC Capital Markets LLC, the investment unit of Royal Bank of Canada, is doubling its staff in Frankfurt to 40 and will make the German office a hub for its entire business in the European Union, Handelsbatt reported.

* Wind-down proceeds of Heta Asset Resolution AG, the bad bank of Hypo Alpe-Adria-Bank International AG, are ahead of plan and will amount to €10.5 billion in 2018 instead of an initial forecast of €9.6 billion, the bank said.

* IKB Deutsche Industriebank AG posted a consolidated net loss of €215 million in the financial year to March 31, compared to consolidated net income of €26 million a year ago, mainly owing to non-recurring effects of restructuring of liabilities. Operating result exclusive of one-time effects improved to €90 million from €63 million in the period.

* Credit Suisse Group AG is eyeing Madrid and Frankfurt as possible alternatives to London after Brexit, backing away from its expansion plans for Ireland, the Irish Independent wrote.

FRANCE AND BENELUX

* Bank of America Corp. named Bernard Mourad, formerly an adviser to French President Emmanuel Macron, as head of corporate and investment banking for France, effective in September, Reuters reported, citing sources.

* Belgian asset manager ABK Bank is set to relaunch next week with a new name and under new management, De Tijd reported.

SPAIN AND PORTUGAL

* After four years, customers who lost money after the collapse of Banco Espírito Santo will start receiving partial reimbursement. The first tranche of payments to the former clients who accepted the agreement, a total of €140 million, will be made on June 22, Jornal de Negócios said.

* A French subsidiary of American fund Cerberus has agreed to purchase the 87.5% stake Novo Banco SA holds in France's Banque Espírito Santo et de la Vénétie. The value of the transaction has not been disclosed; the deal is still pending approval from relevant stakeholders, Jornal Económico wrote.

ITALY AND GREECE

* Intesa Sanpaolo SpA is in talks with several potential partners regarding an investor for its wealth management division, Reuters wrote, citing the bank's CEO.

* Banco BPM SpA completed the securitization of €5.1 billion in bad loans, with the issue of three tranches, reported Reuters.

* UniCredit SpA's Croatian unit Zagrebacka Banka sold €245.7 million in gross bad loans to B2 Kapital, said Reuters.

* An Italian administrative court ruled it does not have jurisdiction to hear a case brought by the Italian state against Morgan Stanley over derivatives transactions, which included a request for €2.7 billion in damages, reported Reuters.

NORDIC COUNTRIES

* The Danish Competition and Consumer Authority is investigating whether Danske Bank A/S, Jyske Bank A/S, Nordea Bank AB (publ), Svenska Handelsbanken AB (publ) and Sydbank A/S breached currency exchange surcharge controls and rules when increasing card-based surcharges in recent months, Berlingske Tidende reported.

* Denmark's financial regulator has ordered Basisbank A/S to strengthen its credit risk controls connected to its lending, Politiken reported. This follows an audit of the bank's credit management, solvency and lending practices. The regulator described the bank as having a "high risk appetite" that potentially exposed it to significant credit risk.

EASTERN EUROPE

* The Russian central bank canceled the license of JSC Bank Voronezh and placed the lender into provisional administration until the appointment of a receiver or a liquidator, saying the bank was involved in operations aimed at concealing its actual financial situation.

* PAO Promsvyazbank announced a tender offer to buy back its 2019 eurobond ahead of potential sanctions that could be imposed on the lender due to its planned cooperation with Russian defense sector companies, Kommersant reported. The total value of the 5.25% bond amounts to $250 million, with $188.4 million still outstanding.

* Polish law enforcement authorities detained GetBack SA's former CEO Konrad Kakolewski, who is suspected, among other things, of market manipulation, providing false information in stock markets reports, and activities that resulted in financial damage for the company, Rzeczpospolita reported.

* PPF Investment Group will acquire a 100% stake in Serbia-based Telenor banka a.d. Beograd as part of a deal to buy the telecom assets of Telenor ASA in central and eastern Europe, news agency CTK reported.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: 2 Japanese banks to merge in 2019; Australian regulator takes Westpac to court

Middle East & Africa: Barclays Africa to ax top retail bank jobs; Sudanese central bank chief dies

Latin America: Argentina replaces central bank chief; Mexico eyes more tariffs on US imports

North America: IMF warns of higher recession risk in US; 2 SD banks to merge into Minnwest Bank

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Europe's bank failure rules on trial amid Banco Popular legal fallout: The resolution of Spain's Banco Popular was hailed as a success by regulators, but out-of-pocket investors beg to differ, setting the stage for legal battles and posing questions about the future of Europe's bank failure rules.

Big western European banks to race for top CEE market spots: After laying the groundwork in central and eastern Europe, banks such as UBS, UniCredit and SocGen are aiming to boost retail lending and take a leading role in these markets in 2018.

Ben Meggeson, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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