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Weekly news through July 8


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Weekly news through July 8

SNL Financial offers our top picks of bankingnews stories and more published throughout the week.

Brexit fallout     

* The Bank of England's Financial Policy Committee decided to the countercyclical capitalbuffer rate to zero percent of banks' exposures from 0.5% in a bid to encourageBritish banks to continue lending amid uncertainties stemming from the U.K.'s decisionto leave the EU. The new rate is likely to be in place until at least June 2017.

* S&P Global Ratings revisedthe outlooks on a number of major U.K. lenders, including Barclays Plc, HSBC Holdings Plc, LloydsBanking Group Plc, SantanderUK Plc and NationwideBuilding Society, to negative from stable. The agency said the Brexitvote had increased the risks of adverse economic developments. S&P, meanwhile,revised to stable from positive the outlook on Royal Bank of Scotland Group Plc.

* Deutsche Börse AGCEO Carsten Kengeter suggested settingup a dual holding company after his company's planned merger with .The setup would involve two holding companies, one based in the U.K. and one inthe EU, which could ease German regulators' concerns about housing the new group'sheadquarters in London following the Brexit vote. LSE Group shareholders the merger earlier in theweek.

* RBS CEO Ross McEwan said a sharp drop in the group's share price followingthe Brexit referendum has delayedits privatization by "at least a couple of years." McEwan signaled thatRBS could return to profitability in 2018 after reporting a full-year loss for theeighth year in a row in 2015.

* The IMF warnedthat the Brexit vote, if accompanied by a significant slowdown in the U.K., couldhurt the profitability of Norwegian banks and insurance firms "given theirdirect and indirect exposures" and could lead to asset quality deterioration. The IMF urged the Norwegian government to be prepared to provide liquidityto the banking industry in the event of a systemic liquidity crunch.

Regulatory action

* The European Banking Authority will launch in September its 2016 EU-wide transparency exercise,examining a sample of more than 100 banks. The exercise will be independentfrom the 2016 EU-wide stress test and will cover data on banks' capital, risk-weightedassets, and P&L, among others.

* EU finance ministersare expected to opposeany disproportionate increase of costs on banks in Europe that could arise fromthe Basel Committee on Banking Supervision's review of global banking rules. Indraft conclusions it said "the reform package would not be expected to resultin a significant increase in the overall capital requirements for the European bankingsector."

* The Swiss Federal Tax Administration ordered UBSGroup AG to turn over information linked to a French request for assistanceon tax matters. The request concerns a number of accounts pertaining to former andcurrent French-domiciled clients and is based on data from 2006 and 2008.

* The U.K. Serious Fraud Office is seeking a retrial of Stylianos Contogoulasand Ryan Reich, two former Barclays traders charged with conspiracy to defraudby rigging U.S. dollar LIBOR. A jury failed to reach verdicts on the two after an11-week trial that led to the convictionof other former Barclays traders Jonathan Mathew, Jay Merchant and Alex Pabon.

* Austrian Chancellor Christian Kern and Finance Minister Hans Jörg Schellingsaid the country's bank levy will be reducedto less than €100 million per year for all lenders combined from the current figureof about €380 million.

Cutting exposures

* The ECB BancaMonte dei Paschi di Siena SpA to reduce its stock of nonperforming loans.The Italian bank has until Oct. 3 to come up with a plan to reduce its NPL ratioto 20% by 2018.

This may force the bank to additional capital.

* Deutsche Bank AGis considering sellingat least $1 billion in shipping loans to minimize its exposure to the industry.

Provisions, provisions

* Five Dutch banks will recognizeadditional provisions in their second-quarter results to cover derivatives compensation.Rabobank expects to makean additional provisionof €500 million, followed by ABN AMROGroup NV at €360 million and INGGroep NV at about €150 million. SNSBank NV and Van LanschotNV will also recognize extra provisions.

* CaixaBank SAcould book up to €750 million in additionalcharges if a court orders Spanish banks to fully reimburse clients forexcess interest payments due to floor clauses on mortgage contracts. Banks werepreviously ordered to reimburse customers for any excess payments beginning May9, 2013.

Featured during the week on S&P Global MarketIntelligence

: Chart Watch: Just two of Europe's 25 largest commercialbanks by total assets produced positive total returns in the first half of 2016,according to S&P Global Market Intelligence data.

: According to figures from S&P Global Market Intelligence,13 leading and secondary Italian banks have a total of €260 billion in NPLs. Inorder to achieve an 80% coverage ratio, they would need €89 billion in fresh capital.

:The Bank of England's Financial Policy Committee has given banks increased capacityfor lending, but it also highlighted the risks to the economy in the wake of Brexit.

S&P Global Ratings and MarketIntelligence are owned by S&P Global Inc.