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SocGen expects €1B fine over US sanctions; job cuts at RBS, Lloyds

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SocGen expects €1B fine over US sanctions; job cuts at RBS, Lloyds

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.

Penalty box

* Société Générale SA expects to pay roughly €1.1 billion to U.S. authorities over transactions processed by the French bank involving countries that are subject of U.S. economic sanctions. The lender noted it has entered into more active discussions with the authorities and anticipates a conclusion to the matter within the coming weeks.

* ING Groep NV finalized a €775 million settlement agreement with the Dutch Public Prosecution Service over previous probes on requirements for client on-boarding and prevention of money laundering. The Dutch bank agreed to pay a fine of €675 million and €100 million for disgorgement. The U.S. Securities and Exchange Commission, meanwhile, decided not to take any enforcement action against ING Groep over the same matter.

* The Turkish government does not expect Türkiye Halk Bankasi AS to face a fine related to sanctions violations after a U.S. law firm found that it had not violated laws.

* The head of an unnamed foreign bank's unit in London was arrested after a bribery probe conducted by the U.K.'s National Crime Agency.

Buyers and sellers

* Piraeus Bank SA is preparing to put two new debt portfolios worth a combined €800 million on the market as part of its ongoing push to rid itself of toxic loans, CEO Christos Megalou told analysts during a call for the bank's first-half earnings. The bank reported a profit of €24 million for the second quarter, compared with €15 million in the first quarter.

* Poland's Alior Bank SA and Portugal's Millennium BCP submitted bids to buy Euro Bank SA, the Polish unit of Société Générale SA. French lender Crédit Agricole SA is also vying to acquire Euro Bank.

* Russia-based VTB Bank PJSC sold its New York-based unit VTB Capital Inc. to the subsidiary's management. The business will be renamed Xtellus Capital Partners and will provide brokerage services to VTB Group.

* BNP Paribas SA Luxembourg unit BGL BNP Paribas SA completed the acquisition of ABN AMRO Bank NV's ABN AMRO Bank (Luxembourg) SA and its fully owned subsidiary ABN AMRO Life SA.

* Austria's BAWAG PSK completed the acquisition of German building society bank Deutscher Ring Bausparkasse AG from Basler Versicherungen and SIGNAL IDUNA Gruppe.

* Idea Bank SA agreed to offload a 15% stake in unit Idea Getin Leasing to its main shareholder Leszek Czarnecki for 75 million Polish zlotys.

* Spain's Banca March SA purchased a portfolio of €550 million in assets under management from BNP Paribas SA's private banking business.

Game plans

* Royal Bank of Scotland Group PLC will close 54 England and Wales branches in January 2019, with 258 jobs expected to be made redundant.

* Lloyds Banking Group PLC cut 380 jobs as part of a restructuring that will in turn create 435 jobs in its transformation division. The British bank is also restructuring its commercial banking division and will eliminate several senior management roles to cut costs, Bloomberg News reported.

* HSBC Holdings PLC is close to the launch of a digital bank, a project for which it has appointed more than 100 people. Project Iceberg is expected to focus on small business customers and may launch by the end of 2018 in testing mode.

In other news

* Deutsche Bank AG may have helped curb illicit transactions at Danske Bank A/S 's branch in Estonia. An insider told Bloomberg News the German bank began rejecting transactions going through the Danske branch in 2014 and completely stopped its services a year later. Danske is facing accusations of allowing the laundering of $30 billion of Russian and ex-Soviet funds through the branch.

* TSB Banking Group PLC CEO Paul Pester will vacate the role after customers faced another IT issue related to its internet banking and mobile app channels on the weekend of Sept. 1.

* Banco Popular Español SA reported a net profit of €85.87 million in the first half of 2018, compared to a loss of €12.22 billion in the same period in 2017.

* Deutsche Bank AG will drop out of the Euro Stoxx 50 index on Sept. 24, reflecting the decline in the Frankfurt-based banking group's market capitalization, which has dropped 30% to €20 billion in 2018. German peer Commerzbank AG, meanwhile, will be replaced on Germany's blue-chip DAX index by local payments provider Wirecard AG, effective Sept. 24, according to Deutsche Börse AG.

* Greek banks are slightly ahead of the central bank's target of bringing the stock of gross NPEs down to €90.2 billion by June 2018. They have cut their combined nonperforming exposures by 6.1% to €88.6 billion in the six months to June 30.

Featured during the week on S&P Global Market Intelligence

New banks lobby UK regulator for level playing field on capital requirements: So-called challenger banks say that compared with larger, established banks, their lack of historic data on loan defaults means they are forced to hold more capital and are forced into riskier lending.

UK 'challenger banks' post higher H1 profit; CYBG bucks trend: Chart Watch: CYBG, which is in the process of acquiring rival Virgin Money Holdings (UK), swung to a loss in the six months to March-end from a year-ago profit due to higher provisions for the misselling of payment protection insurance.

Equities remain key driver for global investment bank revenues in Q2: Equities continued to drive revenue growth at leading global investment banks during the second quarter with smaller contributions from fixed income and advisory, data from business intelligence firm Coalition shows.

BBVA facing profit pressure, higher provisions on Turkish lira rout: Investor angst and currency market turmoil will put pressure on earnings at BBVA's Turkish operations and will likely lead to higher provisions, but analysts expect that the bank will endure a short-term bump for long-term gain.