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Metro Bank probes launched; Commerzbank faces fine; VTB, Alpha Bank profits down

UK AND IRELAND

* Regulators are expected to tell Metro Bank PLC to further shore up its capital buffers even after its successful capital raising, analysts said, as its share price fell again on news that three U.S.-based law firms are investigating whether it or its bosses committed securities fraud. The troubled British lender's shares closed 5.81% lower yesterday after The Guardian reported that Pomerantz and Levi & Korsinsky launched new probes, while Glancy Prongay & Murray confirmed that it was going to continue an investigation it began on behalf of investors in May.

* Legal & General Group PLC agreed to sell its general insurance business to Allianz Group unit Allianz Holdings PLC. The financial consideration of the deal, which is expected to conclude in the second half, consists of a base price of £242 million at completion and potential additional payments over a three-year period from ongoing commercial arrangements.

* Liverpool Victoria Friendly Society Ltd. signed an agreement to sell its residual 30.1% stake in LV= General Insurance to Munich-based Allianz for up to £365 million. The deal represents LV='s exit from its general insurance partnership with the German insurer.

* Bank of England Deputy Governor Dave Ramsden said the regulator should raise rates if the U.K. leaves the EU with a deal, as a smooth Brexit is expected to lead to a pick-up in growth, leading to excess demand and building domestic inflationary pressure.

* HSBC Holdings PLC is planning to cut at least 500 jobs within its global banking and markets division as part of the British lender's objective to achieve positive jaws, insiders told Bloomberg News.

* Barclays PLC is looking to expand its global banking operations in Asia and revive its markets business in the region with dozens of new hires in the next two to three years, Reuters reported.

* The Irish central bank fined Permanent TSB PLC €21 million as part of an investigation into the tracker mortgage scandal involving several Irish banks. The regulator also required the Permanent TSB Group Holdings PLC unit to pay €54.3 million in redress and compensation to affected customers.

* Ireland's central bank could impose total penalties of up to €350 million on banks as part of its investigation into the tracker mortgage scandal, sources told The Irish Times.

* Bank of Ireland Group PLC named Ian McLaughlin CEO of Bank of Ireland (UK) PLC, subject to regulatory approval. McLaughlin, who previously served as a managing director at Royal Bank of Scotland Group PLC, will succeed Des Crowley.

* The U.K. Financial Conduct Authority and Prudential Regulation Authority jointly fined local retail bank R. Raphael & Sons PLC £1.9 million for failing to properly manage its outsourcing arrangements between April 2014 and December 2016.

* The Association of Member Nominated Trustees filed a complaint with the U.K. FCA about the voting policies and practices of asset managers across Britain, mainland Europe and the U.S. The organization, which comprises U.K. pension funds worth £750 billion according to Financial News, said only a few fund managers had best practice guidelines on issues, such as climate change, gender and ethnic diversity.

* U.K.-based banknote printing firm De La Rue PLC CEO Martin Sutherland agreed to step down from his post.

GERMANY, SWITZERLAND AND AUSTRIA

* German financial supervisor BaFin is considering imposing a fine of up to €195 million on Commerzbank AG over suspected late disclosure of a strategy change in 2016, insiders told Handelsblatt.

* Credit Suisse Group AG made its debut in the Singapore dollar-bond market this week with a S$750 million perpetual bond issue at 5.625%, which draw strong interest from both institutional and private banking investors and total orders of more than S$2.7 billion, The Business Times cited Credit Suisse Asia-Pacific CEO Helman Sitohang as saying.

* Credit Suisse CEO Tidjane Thiam in an interview with L'Agefi does not think highly of cross-border mergers of banks in Europe, saying, "We are very skeptical about international takeovers and mergers across borders." He added that he was open to domestic consolidation in markets where Credit Suisse was already active.

* Austrian President Alexander Van der Bellen appointed Brigitte Bierlein as the country's first female chancellor, the Financial Times reported. Bierlein replaces Sebastian Kurz, who lost a no-confidence vote in parliament earlier in the week in the wake of a corruption scandal.

FRANCE AND BENELUX

* BNP Paribas SA is pondering the sale of its stake in units in Guinea, Burkina Faso and Mali, L'Agefi reported, citing a Bloomberg report. The French bank is not considering withdrawing from the African continent.

SPAIN AND PORTUGAL

* Banco Mediolanum SA appointed Igor Garzesi CEO, replacing Vittorio Colussi, Europa Press wrote. Garzesi has been director general of the bank since 2010.

* Portugal's central bank approved António Vila-Cova to remain chairman of Banco Finantia SA despite his having served previously as a director at Caixa Geral de Depósitos SA between 2004 and 2005, Jornal de Negócios reported, noting that the regulator had rejected some proposed directors at other banks on the grounds of their past positions at CGD.

ITALY AND GREECE

* Italian Deputy Prime Minister and League party leader Matteo Salvini is willing to end his alliance with the 5-Star Movement if his national coalition partner opposes his proposed fiscal measures, insiders told Bloomberg News.

* Intesa Sanpaolo SpA secured consent from five banking unions for 1,600 voluntary job layoffs, Reuters reported. The Italian bank also agreed to hire 150 new employees.

* Prelios and Intesa are finalizing the deal to dispose of €10 billion of unlikely-to-pay loans with the end of the due diligence expected in the second half of June, MF reported adding that the deal could see Prelios buy a €4 billion stock of UTP, while the remaining €6 billion would remain in the hands of the lender.

* Banca Popolare di Puglia e Basilicata SCpA securitized €502.3 million of mortgages not in receivership, MF reported.

* Andrea Cardamone stepped down as director general of Widiba, the online banking unit of Banca Monte dei Paschi di Siena SpA, and will be succeeded by Marco Marazia, currently sales director, MF wrote.

* Private equity firm Cinven is ready to make a €50 million offer to take over Italy-based insurer Pramerica Life SpA, a unit of U.S.-based Prudential Financial, MF reported.

* Greece's Alpha Bank AE reported first-quarter after-tax profit attributable to shareholders of €27.5 million, down from a restated to €65.4 million a year ago.

EASTERN EUROPE

* VTB Bank PJSC's first-quarter net profit attributable to shareholders of the parent fell to 46.6 billion Russian rubles from 55.6 billion rubles in the same period in 2018.

* VTB is considering various scenarios regarding Brexit, but its London division will continue to operate, although a number of activities will be shifted to Frankfurt, news agency Prime reported, citing deputy head Dmitry Olyunin.

* PAO Sberbank of Russia suspended its business plans related to cryptocurrencies, news agency TASS reported. Vice President Andrey Shemetov said the lender had been waiting for legislation that would allow it to trade cryptocurrencies, but the Russian central bank has a negative attitude towards this type of assets.

* The Russian central bank canceled the license of small local lender Kemsotsinbank, citing insufficient loan loss provisions and involvement in operations artificially inflating the size of its capital.

* The Russian central bank warned against the potential emergence of a "lending spiral" in the mortgage market, which could result in the growth of property prices, Vedomosti said.

* Getin Noble Bank SA believes that chances of its merger with sister unit Idea Bank SA have decreased significantly, and the merger would only be possible with the help of an external investor that would recapitalize the lender itself or the merged bank, news agency PAP reported. Getin Noble Bank head Artur Klimczak noted, however, that the lender should be able to restore its capital ratios on its own, without the potential help of an external investor or its main shareholder.

* Poland's Bank Guarantee Fund set up a new institution that could participate in rescuing financially troubled banks, Parkiet reported. The institution, named First Bank BFG, was registered in April and has a share capital of 275 million Polish zlotys.

* Eurasian Development Bank appointed Kazakhstan Prime Minister Askar Mamin chairman of its board of directors.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: IDBI Bank's Q4 net loss narrows YOY; Fitch lowers Canara Bank ratings

Middle East & Africa: Bank of Kigali in talks to buy insurer; Standard Bank climate risk plan rejected

Latin America: Mexico cuts 2019 GDP forecast; Brazil looks to ease further reserve requirements

North America: BofA faces suit; FDIC chair eyes community bank deposits; CFPB settles with BSI

Global Insurance: Conn. public health bill; tornado slams Kansas; Reliance General sale talk

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

UK lenders make strides with Open Banking, but fintechs still frustrated: The initiative, which is designed to democratize banking data, has created a major technical challenge for the U.K.'s largest lenders, but banks are rising to the occasion of keeping Open Banking services up and running — most of the time.

Global i-banks see weakest Q1 in three years with revenue drops across the board: First-quarter revenues at the 12 leading global investment banks fell for the first time since 2016 with drops booked across all major business lines, including fixed income, equities trading, and advisory services, research firm Coalition said.

Lloyd's shake-up forcing business shift for managing general agents: The drive for underwriting profit at Lloyd's is pushing some U.K. MGA business to the company market, but MGAs say Lloyd's capacity is still available for more specialist risks.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Yael Schrage, Stephanie Salti, Sophie Davies and Helen Popper 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.