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Danish FSA asks Danske to bolster capital; court to probe CaixaBank/BPI deal

* Tougher capital rules for banks drawn up after the financial crisis are working, according to Basel Committee data, which shows top banks are in more robust health than in 2015. The shortfall in total loss-absorbing capacity for 111 large internationally active banks with Tier 1 capital of more than €3 billion was €25.8 billion at 2017-end, more than 70% lower than it was at 2015-end.

* A senior official of the European Court of Justice said the ECB's quantitative easing program does not violate the central bank's mandate, the Financial Times reported.

UK AND IRELAND

* The U.K. Competition and Markets Authority issued legal directions to Lloyds Banking Group PLC after the group failed to submit annual payment protection insurance reviews and gave customers incorrect PPI data.

* Irish central bank Governor Philip Lane said the regulator has received more than 100 Brexit-related applications from financial services firms seeking to set up or extend their operations in the country.

* U.K. asset manager Rathbone Brothers Plc appointed Jennifer Mathias group finance director, effective April 1, 2019, replacing Paul Stockton.

GERMANY, SWITZERLAND AND AUSTRIA

* Munich Re Co.'s board has authorized the repurchase of up to 11 million of the company's shares for a maximum total purchase price of €1 billion.

* Zurich-based catastrophe insurance data provider Perils AG said its final loss estimate for extratropical Cyclone Xavier, which primarily affected Germany on Oct. 5, 2017, stands at €324 million.

* DZ Bank AG plans to cut 485 full-time jobs, almost 10% of its staff, and reduce costs for external service providers by 50% by 2022, while targeting an operating profit growth of 3.5% annually by then, Reuters reported.

* A senior compliance officer at Commerzbank AG has won a gender and maternity discrimination claim against the German lender, the Financial Times reported.

* Potential investors in a stake of Norddeutsche Landesbank Girozentrale have time until the beginning of next week to make their offers, Handelsblatt wrote.

* Banca dello Stato del Cantone Ticino is ending its cooperation with Lugano-based Soave Asset Management Ltd. to build up a service platform for intermediaries and is returning its 30% stake to the latter's shareholders, saying that new legal conditions are making the project unviable.

FRANCE AND BENELUX

* Groupe BPCE appointed Christine Fabresse deputy CEO in charge of retail banking and insurance, among other changes to its general management committee.

* French information technology firm Capgemini SE will acquire a 20% stake in Azqore, a unit of CA Indosuez Wealth SA specializing in technology outsourcing services and banking transactions for wealth managers, for an undisclosed sum. The deal is expected to be completed by the end of October.

* Dutch investors association VEB called for ING Groep NV accountants Ernst & Young and KPMG to be stripped of their confidentiality agreement in order to provide shareholders with clarity on their role in a money laundering scandal involving the bank, De Telegraaf reported.

* ING said it is merging its computer systems in Belgium with those in the Netherlands, following technical issues at its Belgian unit, Bloomberg News reported.

SPAIN AND PORTUGAL

* A Spanish court will look into possible irregular activities in CaixaBank SA's 2017 takeover of Portugal's Banco BPI SA, Reuters wrote. The investigation reportedly comes after two unidentified shareholders filed a lawsuit against the Spanish lender, accusing it of insider trading and improper management.

* The Portuguese banking system's nonperforming loan portfolio fell 6.5% to €32.4 billion in June from March, according to the latest quarterly data from the country's central bank, Jornal de Negócios reported.

* Portugal's Millennium BCP has filed a complaint before the EU General Court in Luxembourg against the European Commission over the contingent capitalization mechanism that could lead the country's banking resolution fund to inject €3.89 billion into state-rescued Novo Banco SA, Jornal de Negócios reported.

* Portugal's Caixa Económica Montepio Geral caixa económica bancária SA is set to be renamed Banco Montepio as part of a rebranding at its 325 branches, Jornal de Negócios reported.

* Portugal's central bank has given preliminary approval for the DIF Broker brokerage firm to buy Lisbon-based fund management company Optimize Investment Partners, Jornal Económico reported. It said the acquisition would be implemented gradually, giving the brokerage and its shareholders an 85% stake in the fund manager by 2020.

ITALY AND GREECE

* The Italian government is looking at reducing the amount of interest payments and write-downs that banks can deduct from their taxable income as part of measures to fund the 2019 budget, an insider told Reuters.

* Italy is drawing up new measures for its GACS state guarantee scheme in a bid to ease disposals of bad loans and is mulling potentially extending the scheme to unlikely-to-pay loans, Reuters reported.

* Italy's Banca Monte dei Paschi di Siena SpA is in advanced talks to sell Belgian unit Banca Monte Paschi Belgio SA to U.S.-based private equity firm Warburg Pincus LLC, insiders told Bloomberg News, adding that the potential deal could value the unit at nearly €50 million.

* Monte dei Paschi has shortlisted Cerberus, Bain Capital and Aurora Recovery Capital-Farallon for the sale of its €420 million unlikely-to-pay loan portfolio named Alpha 2, MF reported, noting that the lender aims to seal a deal by the beginning of 2019 at the latest.

* Cassa depositi e prestiti SpA named CEO Fabrizio Palermo also director general while Paolo Calcagnini was named new CFO, MF reported. Il Sole 24 Ore also covered.

* Italian market regulator Consob agreed to impose €2.6 million in fines on top managers and members of the board of auditors of Banca Popolare di Bari SCpA for violations that took place between 2014 and 2016, Il Sole 24 Ore reported.

* Moody's said Greece's move to lift limits on cash withdrawals from domestic bank accounts and further ease capital controls are credit positive for Greek banks, Reuters reported.

* The Greek government is drawing up an asset protection scheme to assist Greek banks in offloading bad loans and has shown the plan's details to EU competition authorities and banking supervisors, insiders told Reuters.

* Former Barclays PLC CEO Bob Diamond's Atlas Merchant Capital LLC will invest more than €100 million in Greek online-focused lender Praxia Bank SA, Bloomberg News reported. Praxia Bank CEO Anastasia Sakellariou said the lender plans to raise as much as €300 million in additional capital by 2022 and has held talks with potential investors. The bank is looking at hiring 300 staff over the next five years.

NORDIC COUNTRIES

* Danske Bank A/S' shares closed 4.60% lower yesterday after it said that Denmark's Financial Supervisory Authority has ordered it to further increase its capital amid an ongoing money laundering scandal. The Danish regulator estimated that the bank must increase its so-called Pillar II add-on requirement to at least 10 billion Danish kroner, compared to the 5 billion kroner projection in May, amid rising compliance and reputational risks. Danske also confirmed that it is in dialogue with the U.S. Justice Department about a criminal investigation related the case.

* Danske Bank carried out up to €8.5 billion worth of so-called mirror trades for its Russian clients in 2013, the Financial Times wrote.

* Swedbank AB (publ) said it is not under any investigation related to its anti-money laundering practices. Sweden's FSA said the risks for serious money laundering issues at Swedish banks are "relatively limited" as lenders' activities in the Baltic region are mainly focused on domestic customers, whereas money laundering concerns at Danske Bank's Estonia branch are focused on non-residential accounts, Reuters noted.

* Nordea Bank AB (publ) also said it is not under investigation over potential money laundering in the Baltics, Reuters reported.

* Finland-based peer-to-peer lender Fellow Finance Oy ended its IPO early due to oversubscription. A total of 2,593,658 shares in the company, representing 44.6% of pre-IPO shares and votes and up to about 36.4% post-IPO, were offered to institutional investors in and outside Finland. The employee offering was priced at €6.96 per share, and the other offerings at €7.73 per share.

* Swedish financial group Avanza Bank Holding AB (publ) has appointed Åsa Mindus Söderlund CEO of Avanza Pension, Realtid reported. Söderlund, currently CEO of Avanza Fonder, replaces Annika Saramies, who is leaving Avanza after 11 years.

EASTERN EUROPE

* Ukrainian central bank Deputy Governor Kateryna Rozhkova said stress tests revealed that at least eight Ukrainian lenders need to be recapitalized for 6.1 billion hryvnia, adding that another five banks might also require more capital in the worst-case scenario, Reuters reported. All the banks will have to implement a restructuring plan by the end of 2019, Rozhkova noted.

* Slovakian Finance Minister Peter Kažimír is interested in replacing Jozef Makúch as central bank governor if the latter steps down, Reuters reported, citing Prime Minister Peter Pellegrini.

* Paweł Surówka, CEO of Polish insurer PZU SA, said he expects more consolidation between domestic banks and that two to four deals could take place in 2019, Reuters reported.

* Three potential investors submitted offers to purchase assets from financially troubled Polish debt collector GetBack SA, and the offers will be submitted to the company's creditors council for consideration, Rzeczpospolita reported.

* A Slovenian court ordered state-owned lender Abanka d.d. to repay €1.3 million to two owners of subordinated bonds written off during the country's bank overhaul in 2013 and 2014, Reuters reported.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Luxembourg, Australia sign fintech deal; Moody's downgrades Suruga Bank ratings

Middle East & Africa: Saudi lenders finalize merger deal; Sudan to set daily exchange rate

Latin America: Brazil's B3 settles with antitrust body; Chile passes bank modernization bill

North America: Hedge fund to return money to investors; Powell says rate hikes should continue

Global Insurance: Aetna to stay put; Transamerica settles suit; alt capital's 'bloody nose'

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Political will may not be enough to drive Deutsche, Commerzbank merger: A merger between German's Deutsche Bank and Commerzbank is difficult to imagine in the short term despite recent government statements that reignited speculation about a potential deal, according to analysts.

Cyberrisk biggest threat to banks since 2008 crisis, says FCA chief: Misconduct, crime and technological systems failure or data abuse at banks are much bigger risks than financial regulators had foreseen, said Andrew Bailey, CEO of the U.K.'s Financial Conduct Authority.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Yael Schrage, Stephanie Salti, Praxilla Trabattoni and Helen Popper contributed to this report.

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