trending Market Intelligence /marketintelligence/en/news-insights/trending/NbujL586swyQ2jiZT1hRDg2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Higher leverage ratio eyed; Piraeus Bank expects 2016 profit; Iceland gets new PM

Blog

Banking Essentials Newsletter - February Edition, Part 2

Podcasts

StreetTalk – Episode 74: Investor sees legs in strong credit performance, US bank stock rally

Blog

Street Talk – Episode 74: Investor sees legs in strong credit performance, US bank stock rally

Blog

The Evolution of ESG Factors in Credit Risk Assessment: Environmental Issues


Higher leverage ratio eyed; Piraeus Bank expects 2016 profit; Iceland gets new PM

Basel eyes higher leverage ratio for G-SIBs: The Basel Committee onBanking Supervision yesterday launcheda consultation on proposed revisions to the Basel III leverage ratio framework.The committee said ahigher leverage ratio for global systemically important banks may be necessaryto maintain the relative roles of the risk-based ratio and the leverage ratioin the regulatory capital framework. Reuters notesthat the proposed changes include softer capital requirements for banks withlarge derivatives portfolios. BloombergNews and the Financial Times also have reports.

* The European Banking Authority'slatest quarterly updateshowed that banks' average common equity Tier 1 ratio increased further by 60basis points to 13.6% in the fourth quarter of 2015, due to an increase incapital and a decline in risk-weighted assets. Meanwhile, banks' profitabilityremains low, with average ROE falling 1.7 percentage points on a quarterlybasis to 4.7%. Credit quality and the level of legacy assets also remain aconcern, according to the regulator. Reuters has a report. 

* Germany's finance ministry saidthe EU must transpose the G-20 agreement on total loss-absorbing capacity intolaw without watering down bank-failure rules that have already been enacted inorder to have a "credible and workable EU resolution regime,"Bloomberg reports.The finance ministry insisted that "at least the biggest banks" musthave a minimum requirement of own funds and eligible liabilities of at least 8%of total liabilities.

UK AND IRELAND

More branch closures on the horizon: , andBarclays Plc areconsidering shutting down roughly 400 branches this year, insiders tellReuters. HSBC may close the highest number of branches at about 200 while RBSand Barclays may cut their branch networks by roughly 100 branches each.

* 'sBank of SingaporeLtd. agreed to acquire Barclays Bank Plc's wealth and investment management businessin Singapore and Hong Kong for roughly $320 million. Pending approval from theSingapore High Court, the transaction is expected to close by 2016-end. Thesale is part of Barclays CEO Jes Staley's efforts to restructure the business,Reuters notes.Bloomberg also covers.

* European banks that purchasedbonds backed by U.K. mortgages, bank loans and credit-card debt would have toreplace a maximum of €108 billion of the securities if Britain were to vote toleave the EU, Bloomberg writes.A partner at law firm DLA Piper, which specializes in structured credit, warnedthat the banks could face a liquidity issue as the assets might no longer counttoward their emergency cash reserves.

* U.K. Treasury Select CommitteeChairman Andrew Tyrie yesterday called on Chancellor George Osborne to clarifywhether fines classified as compensation payments to regulators are taxdeductible, Reuters reports.There is confusion whether last year's rule changes, which stopped taxdeductibility for compensation payments to customers, cover compensationpayments to regulators.

* Fitch Ratings saida series of weather events in the fourth quarter of 2015 impacted theprofitability of U.K. nonlife insurers, but flood losses were within the annualbudget for weather-related losses for most insurers due to benign weatherduring the rest of the year. The agency expects competition in the segment tocontinue to be strong.

GERMANY,SWITZERLAND AND AUSTRIA

Allianz sellsSouth Korean ops: yesterday that it agreed to sellits South Korean insurance and asset management businesses to China'sAnbang Insurance GroupCo. following an extensive review. Allianz will sell the businessesfor more than $3 million, accordingto Reuters.

* saidtoday that the minimum price for a capital increase designed to fund itstakeover of BTG PactualGroup's BSISA will be CHF6.12 per share. Up to 81,699,347 newly issued registeredshares will be offered in the rights issue.

* BTG Pactual and are at odds on who shouldbear potential losses related to BSI's dealings with 1Malaysia DevelopmentBhd., Bloomberg writes.BSI, which was acquired by BTG Pactual from Generali last year and is beingsold to EFG International, is cooperating with global regulators after itsSingaporean unit handled accounts for the controversial Malaysian state-runfund.

* suspended fiveemployees in its wealth management unit who may have violated rules, financeblog Inside Paradeplatz writes.Among the affected employees is Serene El Masri, head of private wealthmanagement for the Middle East and Africa.

* Joachim Nagel, a board member atthe Deutsche Bundesbank, could move to KfW and take over the post of current KfW ChairmanNorbert Kloppenburg, Handelsblatt writes,citing an unconfirmed report by Reuters.

* Alexander Vollert was namednew chairman of the board of AXAKonzern AG effective September 2016. He succeeds incomingAXA CEO Thomas Buberl.

* stepped up itshiring spree in Asia Pacific, as CEO Tidjane Thiam said it is the best time toattract talent while rival financial institutions are retreating from theregion, Bloomberg reports.Separately, eight executives from the group's Brazilian fixed-income andstructured products operations left the group, while the business' managingdirector, Sergio Machado, will depart soon, insiders tellthe newswire.  

* CEO Martin Schollsaidin an interview with Finanz & Wirtschaft that he was astonished bywhat he believes to be unrealistic growth targets of competitors such as CreditSuisse, whose CEO Tidjane Thiam wants the Swiss business of the bank to grow by40% in just two years. Scholl said: "That is not realistic. Who says suchthings hasn't done his homework."

* Austrian Finance Minister HansJörg Schelling and the province of Carinthia are open to new negotiations withcreditors of Heta AssetResolution AG to avoid a long legal dispute, Die Presse notes.

* Michael Grahammer is steppingdown as CEO of Hypo LandesbankVorarlberg, which has been named in the Panama Papers, ORF reports. Grahammersaid the bank was not doing anything illegal regarding its offshore deals andthat his resignation was "no confession of guilt."

* Hong Kong-listed Citychamp Watch& Jewellery Group Ltd. will acquire a 68.85% stake in fromValartis Group AG forCHF110.5 million, Reuters reports.Citychamp also offered to acquire a 29.45% interest from minority investors atsimilar terms.

FRANCE ANDBENELUX

New Panama Papers probe: French prudential supervisor ACPRwill investigate the existence of offshore accounts following news thatSociété Générale SAset up 979 offshore companies through Panama-based law firm MossackFonseca, Les Echos writes. In an interviewwith Le Figaro, SocGen CEO Frédéric Oudéa expressed outrage at whathe said were inaccuracies and the dangerous mix of information regarding thelender. L'Agefi also reports

* European regulators nearlyhalved to €227.7 million the fine imposed on SocGen in a EURIBOR-rigging caseas a result of a new calculation on the value of the sales offered by the bank,Les Echos writes.Initially, the bank was fined €446 million.

* confirmed yesterdaythat the simplification of its capitalistic structure would be completed duringthe third quarter, Les Echos writes.

* A group of hackersyesterday attacked several banking websites in Belgium, including that ofBNP Paribas FortisSA, according to L'Echo. and have also beentargeted by the attacks. De Tijd alsocovers.

* yesterday that it named OlgaZoutendijk, currently vice chairman of the supervisory board, as chairman.

* saidyesterday that the group's Solvency II level calculated according to theapproved partial internal model stood at 201% as of 2015-end.

SOUTHERN EUROPE

Piraeus Bank eyes profitability in 2016: Chairman MichalisSallas said the lender will return to profitability this year, accordingto Euro2day. Sallas said PiraeusBank's nonperforming loans ratio is expected to drop to less than 17% by 2018,leading to lower provisions. He also said the bank will divest its Cypriotoperations by mid-summer this year as it scales back its foreign activities,Reuters writes.

* Chair LoukaKatseli said capital controls in Greece could be lifted within the next fewmonths, Kerdos reports.

* UniCredit SpA looks set to move forward with plans tounderwrite Banca Popolare diVicenza SpA's planned €1.76 billion share issue, Reuters reports.UniCredit is respecting its commitment as terms of the underwriting contractwere too strict, an insider tells the newswire.

* An Italian decree establishing aguarantee system to help banks offload bad loans will now become law afterreceiving backing in the Italian senate, accordingto Reuters. The decree also contains measures to group 371 small creditcooperatives under a single holding company.

* The ECB authorized toredeem 1.8 million of shares from investors at €7.29 per share, Reuters says.

* began negotiationswith trade unions regarding a restructuring of the bank's workforce,potentially leading to cuts of up to 1,200 employees or 5% of the bank's workforce,El País writes.The bank's management explained that the reductions would be effected through600 early retirements and 600 voluntary redundancies.

* Standard & Poor's RatingsServices yesterday revised Bankinter SA's outlook to positive from stable, sayingthe bank is enhancing its liquidity position.

* Grupo Catalana Occidente SA will acquire Basqueinsurance company Previsora Bilbaína for €125 million, Expansión writes.

* CaixaBank SA and Isabel dos Santos have resumednegotiations over the Spanish lender's attempt to acquire the Angolaninvestor's stake in Banco BPISA, an insider tellsReuters. The parties have until Sunday to meet European regulations requiringbanks to fully provision for Angolan assets.  

* Portuguese Prime MinisterAntónio Costa is expected to tell ECB President Mario Draghi that state-ownedbank Caixa Geral de DepósitosSA must stay in public hands and be recapitalized with statefunding, Jornal de Negócios reports.The future of Novo BancoSA will also be on the agenda when Draghi visits Lisbon today, asthe government seeks to sound him out on possible alternatives if the newattempt to sell the lender fails.

* The Portuguese central bankrecently sent to the ECB the necessary paperwork to pass regulatoryresponsibility for Banco EspíritoSanto SA to a commercial court, paving the way for the entity to beliquidated by the end of the month, Diário Económico reports.

NORDIC COUNTRIES

Iceland has new PM: Iceland appointed Fisheries MinisterSigurður Ingi Jóhannsson prime minister and called for early elections in theautumn, Reuters reports.The development followed the resignation of Sigmundur Davíð Gunnlaugsson asprime minister in the aftermath of the Panama Papers.

* Riksbank Governor Stefan Ingvessaid the Swedish FSA should be merged with the country's central bank, Realtid reports.Ingves said the Swedish framework for macro-prudential supervision needs to bereviewed and that such a merger would make supervision more efficient.

* Moody's said yesterday thatinterest-only mortgage limits will benefit Swedish banks and covered bonds. TheSwedish FSA's proposed amortization rule, which requires mortgage borrowers topay down their loans to a 50% loan-to-value ratio, is expected to reduce creditrisk and help reduce indebtedness.

* Resurs Holding AB yesterday that it intendsto proceed with an IPO and the listing of its shares on Nasdaq Stockholm. TheIPO is expected to consist entirely of existing shares and the listing isexpected to take place in the second quarter.

* has received the greenlight to resume its buyback program for 2016 after the program was temporarilystopped by the Danish FSA, Børsen writes.

EASTERN EUROPE

Albanian central bank cuts rates: The central bank of Albaniadecided to reduce its benchmark interest rate to 1.50% to boost lending amid aslump in inflation, Reuters reports.The Bank of Albania also indicated that it will adopt more stimulus measures in2016.

* B&N Bank(PJSC) is close to acquiring a 49% stake in insurance company VSK, Vedomosti reports, adding that an agreement on the purchase could be reached Sunday. Thevalue of the transaction is estimated at 7 billion Russian rubles.

* PAO AbsolutBank, which was selected to act as an investor in a financialrecovery program for PJSC BalticInvestment Bank, plans to curb the regional network of the latterlender by 20%, Vedomosti writes.  The move is expected togenerate 70 million rubles in savings in 2017.

* will reduce the numberof management board members to three from six as of June as part of an ongoingrestructuring, but the outgoing members will continue to work for , Kommersant reports.

* TheSlovak banking sector is resilient to potential shocks, Reuters reports, citing the Slovak central bank. The regulator noted thateight lenders would record losses under its crisis scenarios, and thecapital of some of the banks could drop below the 8% minimum requirement in theworse of its two stress scenarios. The central bank also said that risks forthe Slovak banking sector include low interest rates that endangerprofitability.

IN OTHER PARTSOF THE WORLD

* Argentina asked its creditors for more time to makedebt repayments under a landmark agreement recently reached between theparties, Bloomberg reports.The government will be unable to meet the April 14 repayment deadline due to a courthearing, putting the agreement at risk of breaking apart unless the bondholdersagree to postpone the deadline, said Argentine Finance Minister AlfonsoPrat-Gay.

* The U.S. Department of Labor the long-awaited finalfiduciary standard rule to fanfare, with Secretary Thomas Perez calling it a"huge win for the middle class." The finalized version provides somerelief for financial services and insurance companies compared to previousiterations, but the bulk of the regulation appears to have remained intact.

NOW FEATURED ON SNL

BPCE indanger of missing cost targets: The French bank has been fallingbehind its competitors in tackling operating costs.

BaselCommittee proposes changes to derivatives treatment in leverageratio: The Basel Committee on Banking Supervision has issued aconsultative document on the Basel III leverage ratio framework, proposing changesto the treatment of derivatives and outlining how the world's largest banks mayhave to meet additional requirements.

Q&A: LV='sJohn O'Roarke on the impact of new tech on UK motor insurance: Themanaging director of LV='s general insurance division explains why he thinksthe U.K. motor insurance industry could shrink to a third of its current size,where liability will lie in the age of self-driving cars, and what this couldmean for traditional motor insurers.

Chart Watch:Share price falls take toll on European bank market cap: Turbulentmarkets in the first quarter shook up SNL Financial's quarterly ranking ofEuropean banks by market capitalization.

Leo Magno, ArnoMaierbrugger, Stephanie Salti, Praxilla Trabattoni, Heather O'Brian, BeataFojcik, Kees Pijnappels, Esben Svendsen, Thanasis Kakalis, Helen Popper and AliKayalar contributed to this report.

TheDaily Dose has an editorial deadline of 7 a.m. London time. Some external linksmay require a subscription.