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Commerzbank to raise Comdirect stake; Gibraltar bank levy; Danske fine estimate


Banking Essentials Newsletter: January 11th Edition


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The Road to Basel IV: Navigating the challenge facing European banks


Basel Framework- Utilizing data to analyze the capital position of European banks.

Commerzbank to raise Comdirect stake; Gibraltar bank levy; Danske fine estimate

* China said the Shanghai-London Stock Connect scheme is functioning normally, denying reports that it temporarily halted the stock exchange link over political tensions with the U.K., Reuters reported. The reports on the scheme's suspension "do not match facts," China Securities Regulatory Commission spokesman Chang Depeng said at a press briefing.

* Gibraltar is set to impose a financial levy on banks doing business in the U.K. after Brexit. Following a consultation, the Gibraltar Financial Services Commission set out proposals for a U.K. Single Market Levy payable by all regulated firms that "passport" into the U.K., including bank and insurance firms.


* British government agencies are trying to determine if a cyberattack actually caused a trading outage in August 2019, insiders told The Wall Street Journal. In the past two months, a British intelligence agency has reportedly reached out to London Stock Exchange Group PLC seeking more details about the incident, and the U.K.'s Treasury is also involved.

* The Bank of England's Prudential Regulation Authority will look into the quality of financial reporting at companies, including U.S. banks Goldman Sachs Group Inc. and Morgan Stanley, unnamed sources told Sky News. It comes weeks after Citigroup Inc. was fined £44 million for lapses in regulatory reporting.

* Heightened supervision in the U.K. financial services sector following the 2008 financial crisis has increased systemic risk due to multiple regulators with no overarching strategy, according to lobby group U.K. Finance, the Financial Times reported. In a submission for the U.K. Treasury's review of the sector's regulatory framework, the trade body also noted that the reforms have led to higher compliance costs.

* Senior figures in the City of London are urging the U.K. Treasury to appoint an outsider to succeed Andrew Bailey as head of the Financial Conduct Authority, according to Financial News. Bailey recently became governor of the Bank of England.

* Investment bankers in London are bracing for cuts of up to 20% on their 2019 bonuses owing to a slumping job market and slumping revenues, Financial News reported.

* Shareholders in some of the biggest companies in the U.K. are urging CEOs to invest in the stocks of their companies ahead of their annual general meetings, the FT reported.

* Starling Bank Ltd. has hired bankers to help in its plan to open an international bank in Dublin that would allow it to offer its current account services in the EU post-Brexit, according to The Sunday Times. The British digital lender is in the process of forming Starling International in Ireland after it clinched a license last year. The bank reportedly plans to enter France, Germany and the Netherlands.

* Ireland's central bank is opposing a plan by the government to increase its responsibility in combating money laundering, noting that the extra work should be assigned elsewhere, The Sunday Times reported.


* Commerzbank AG will acquire an equity stake in Comdirect Bank AG from U.K.-based institutional investor Petrus Advisers LLP for an undisclosed sum. The deal would increase Commerzbank's stake in Comdirect to more than 90%, giving it the legal right to squeeze out the online lender's shareholders.


* BNP Paribas SA will form an electronic currency trading and pricing platform in Singapore to support electronic trading of 50 currencies, Bloomberg News reported.

* Société Générale SA is under fire for having closed the personal, professional, and joint account of a client who criticized the bank on Twitter, as well as her partner's personal account and her nine-year old child's savings account, La Tribune reported.

* Dutch banks are engaged in a hiring war to recruit money laundering specialists after a spate of high-profile cases at some of the country's biggest lenders forced the Dutch central bank to implement stricter control mechanisms, Het Financieele Dagblad reported.

* Belgian insurer Ageas has spent €500 million on a buyback of so-called FRESH securities, a perpetual bond that failed lender Fortis had issued, De Tijd reported.


* CaixaBank SA has incorporated blockchain technology into its catalogue of services through digital commerce platform, with the aim of strengthening foreign trades, Europa Press reported.

* Portugal's central bank and an audit conducted by Ernst & Young concluded that correct procedures were followed in a case involving a real estate sale by Caixa Central de Crédito Agrícola Mútuo that has put further scrutiny on the management of the savings bank, Expresso reported. The property in question was bought by the ECS asset management company, according to a Público report. The mother of one of the directors of the savings bank serves as a director at ECS, but the EY audit found no irregularities in the sale, leading to an anonymous tipoff to the central bank.

* A Portuguese fintech set up by former central bank director António Varela has been ordered to halt operations by the monetary authority, Expresso reported. The startup, called Netinvoice, established a platform for small companies to sell invoices as a way to raise financing, but is now looking into starting an alternative business after the central bank ruled that "only institutions authorized to grant credit in Portugal could register on the platform as invoice buyers."

* Portuguese insurer Fidelidade - Companhia de Seguros SA is about to close the sale of five properties to U.S. private equity firm Cerberus Capital Management for some €125 million, Expresso reported.

* The Portuguese central bank is looking into the suitability of businesswoman Isabel dos Santos as a shareholder in local banks after an Angolan court recently ordered that her assets be frozen, Reuters reported. Dos Santos, Africa's wealthiest woman, currently owns 42.5% of Banco BIC Português SA.


* The European Commission has requested that a new company to be established to which Banca Monte dei Paschi di Siena SpA's nonperforming loans would be spun off to be sold to Italian state-controlled bad loan manager AMCO have a capitalization of €1 billion, up from the €600 million foreseen, said La Repubblica. It is said to be part of a compromise that would see AMCO buy such assets at fair value. The size of the planned bad loan sale to AMCO has now fallen to €9.5 billion to €10 billion following a €1.8 billion NPL disposal at 2019-end.

* Banco BPM SpA CEO Giuseppe Castagna denied speculations of a possible merger between the bank and Italian peer Unione di Banche Italiane SpA, saying the rumor was "an abstract idea," Reuters wrote, citing newspaper Il Messaggero.

* Banca Popolare di Sondrio SCpA said its 2019 results were better than the previous year, while its nonperforming loan ratio had fallen to about 12.5% and could decline to approximately 9% by March with the sale of another €1 billion in bad loans, Reuters reported.

* Fellow lenders have shown no interest in acquiring Banca Popolare di Bari SCpA, which is now under extraordinary administration, Corriere Economia said.

* Businesses and household deposits in Greece fell to €139.57 billion in November 2019 from €139.69 billion the previous month, Reuters reported, citing central bank data.


* The fines that Danske Bank A/S may have to pay due to its alleged involvement in money laundering could reach roughly 13.5 billion kroner, or approximately $2 billion, according to estimates by Jyske Bank A/S, Bloomberg News reported.

* In connection with a money laundering case against four companies with accounts at Nykredit A/S, prosecutors said warnings from the bank led to charges against three Estonians, accused of laundering 166 million Danish kroner, FinansWatch reported. A verdict in the case is expected in March.


* Turkish President Tayyip Erdogan expects interest rates and inflation in the country to drop to single digits in 2020, Reuters reported, citing an interview with CNN Turk.

* The Warsaw District Court sided with a Polish couple in a Swiss franc-indexed mortgage loan dispute with the local branch of Raiffeisen Bank International AG, annulling the loan contract, Parkiet reported. Raiffeisen is yet to decide whether it will appeal the verdict of the Polish court and demand remuneration from the borrowers for the use of capital for the time when the loan was granted.

* Kazakh investor Kenges Rakishev plans to purchase local insurance company Amanat, reported.

* North Macedonian President Stevo Pendarovski requested Interior Minister Oliver Spasovski to form a caretaker government following the resignation of Prime Minister Zoran Zaev, with snap parliamentary elections to take place April 12, SEENews wrote.

* Former Croatia Prime Minister Zoran Milanović is set to become the country's new president, Reuters reported. Milanović, who represents the Social Democratic Party, secured 52.7% of votes in the second and final round of the presidential election, while incumbent President Kolinda Grabar-Kitarović received 47.3% of the votes.


Asia-Pacific: China updates lending rules; Indian bourse seeks approval for IPO

Middle East & Africa: Burgan Bank to sell stake in Iraqi bank; 2 Angolan lenders set to recapitalize


EU taxonomy to provide investment benchmarks, transform environmental reporting: A new classification system on environmentally friendly investments will require companies and investment firms to radically change the way they analyze and report on their performance.

Sheryl Obejera, Daniel Stephens, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Brian McCulloch, 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.