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Deutsche Bank fined again; Credit Suisse in client tax probe; Novo Banco sold

* The EU will begin formal Brexit talks with the U.K. only as of May 22, when the bloc's European affairs ministers meet to approve more specific negotiating directives, an insider tells Bloomberg News.

* Meanwhile, the U.K. is teaming up with Luxembourg in opposing a proposed EU law that would require banking groups based outside the bloc to consolidate their EU activities under a single entity, Bloomberg News adds. The two countries say such a move would "needlessly add to costs and complexity without enhancing the effectiveness of resolution strategies."

* While Britain's formal Brexit talks with the EU are not slated to begin for several weeks, Switzerland has already commenced talks with the U.K. for a post-Brexit relationship, Bloomberg News reports. Swiss Economy Minister Johann Schneider-Amman told the newswire that the Swiss started talks "very, very early" to avoid legal impediments that could hurt businesses.

* France is pushing for the European Securities and Markets Authority, already based in Paris, to merge with the European Banking Authority and for the combined entity to be based in Paris, Les Echos reports. It adds separately that Luxembourg claims an agreement signed in 1965 means the EBA should be based there, while Dublin and Vienna have also made claims. The Irish Times also reports on Ireland being set to contest Luxembourg's claim that it has a legal right to house the EBA when it moves out of the U.K. due to Brexit.

* The ECB is likely to publish its strategy for terminating its quantitative easing program in June because its next monetary policy committee meeting in April is too close to the French elections, Les Echos writes.

* A survey of reserve managers at 80 central banks across the globe found that central banks see the pound sterling as a more stable investment than the euro despite uncertainty posed by Britain's exit from the EU, the Financial Times writes.

UK AND IRELAND

* The U.K. Financial Conduct Authority on Friday published near-final rules on the implementation of the updated Markets in Financial Instruments Directive, or MiFID II, allowing retail financial advisers to take written notes of conversations with clients or tape phone conversations. Investment banks and asset managers will meanwhile have to also record all instant messages and voicemails aside from landline calls to further boost transparency in trading securities, the Financial Times reports.

* Several executives at HBOS Plc had "concealed" a large-scale fraud at the bank's Reading office for about nine years, The Sunday Times writes, citing an internal report conducted by a senior Lloyds Banking Group employee. The report showed that senior HBOS officials had discussed the fraud, which entailed charging small-business customers high fees for personal gain, as early as February 2008.

* The U.K. government further reduced its stake in Lloyds Banking Group Plc to below 2% after the latest round of share sales. The government now has 1,410,483,319 shares in the lender, equivalent to 1.97% of voting rights, down from 2,104,606,310 shares and the same number of voting rights previously.

* Virgin Money Holdings (UK) Plc is this week expected to express interest in bidding for the troubled Co-operative Bank Plc, which put itself up for sale in February, according to The Times of London. U.S. private equity firms J.C. Flowers & Co. LLC and Cerberus Capital Management LP, as well as CYBG Plc, are also reportedly eyeing Co-op Bank.

* Meanwhile, Co-operative Group Ltd. will write off the value of its 20% shareholding in Co-op Bank, resulting in an approximately £140 million charge that will plunge the group to a statutory loss for the 2016 financial year, Sky News writes.

* Royal Bank of Scotland Group Plc is poised to book more than £125 million in legal costs relating to a case brought by disgruntled shareholders hit by the banking group's controversial £12 billion capital increase in 2008, City A.M. writes.

* Liontrust Asset Management Plc completed the acquisition of Alliance Trust Investment Ltd. from Alliance Trust Plc for a total consideration of up to £30 million. Liontrust issued 4,060,792 new ordinary shares worth 1 penny each to Alliance Trust as part of the consideration.

* Frenkel Topping Group Plc today commenced a formal sales process of the group as part of a review of strategic options to "accelerate the enhancement" in its competitive position and maximize shareholder value.

GERMANY, SWITZERLAND AND AUSTRIA

* A U.S. court imposed a $150 million fine on Deutsche Bank Group Services (UK) Ltd., a Deutsche Bank AG subsidiary in London, for its role in a Libor rigging scheme uncovered in 2012, Focus reports. The fine is not part of the $2.5 billion settlement Deutsche Bank already reached with British and U.S. authorities.

* Authorities raided Credit Suisse Group AG offices in London, Paris and Amsterdam last Thursday over possible tax offenses by clients, the bank said, adding that it was cooperating with investigators and emphasizing that it applied "a strict zero-tolerance policy" on tax evasion. Reuters, Bloomberg News and the Financial Times also report.

* Switzerland's attorney general ordered the freezing of CHF160 million of allegedly untaxed money on Credit Suisse accounts belonging to Álvaro Sobrinho, the former CEO of the Angolan unit of collapsed Portuguese bank Banco Espirito Santo SA, Tages-Anzeiger notes.

* Commerzbank AG's and Allianz Group's investment unit Pacific Investment Management Co. LLC is among the plaintiffs seeking to hold Wells Fargo & Co. responsible for billions of dollars of claimed investor losses from handling risky RMBS during the 2008 financial crisis, Handelsblatt reports.

* Norddeutsche Landesbank Girozentrale, in a surprise announcement, said it will not bid for HSH Nordbank AG, saying a merger with a competitor does not fit its strategy, Handelsblatt reports.

* Meanwhile, China's HNA Group Co. Ltd. and Apollo Global Management LLC are among at least five interested parties that are bidding for HSH Nordbank, Bloomberg News notes. The Financial Times also reports.

* DZ BANK AG reports preliminary 2016 net profit of €1.61 billion, down from €1.79 billion a year earlier. The effects of its merger with WGZ Bank included in the result amounted to €256 million.

* Wüstenrot & Württembergische AG reports consolidated net earnings of €235.3 million for 2016, down from €274.3 million a year earlier but above the forecast of €220 million.

FRANCE AND BENELUX

* A Banque de France study has dismissed concerns about a house-price bubble caused by low interest rates, Le Monde reports.

* ING Groep NV is dramatically expanding its workforce in the Netherlands, growing the business by 20%, Het Financieele Dagblad reports. The private bank has hired 85 new bankers, with CEO Ruud van Dusschoten saying the aim is to hire 100 private bankers in total.

* Belgian regulator Autorité des services et Marchés Financiers said BNP Paribas Fortis SA was fined €700,000 for continuing to sell Greek bonds in 2011, L'Echo reports, adding that it will also have to reimburse clients for losses.

SPAIN AND PORTUGAL

* Portugal reached a deal to sell 75% of Novo Banco SA to U.S. private equity firm Lone Star, which will inject 1 billion into the state-rescued lender, Reuters, the Financial Times and Jornal de Negócios report. The country's banking resolution fund will retain the remaining 25% of the so-called good bank carved from Banco Espírito Santo SA.

* The value of CaixaBank SA would grow by 4% if it bought the Spanish assets of Deutsche Bank, as it said it might last month, according to Autonomous analysts cited by Expansión. The Spanish lender could acquire Deutsche Bank's Spanish subsidiary without needing to raise more capital, the analysts added.

* Meanwhile, Banco Santander SA does not need to buy in order to grow "in a profitable way," according to President Ana Botín, Expansión writes. The bank could grow its client base organically in the U.K., Mexico and Brazil, Botín said.

ITALY AND GREECE

* The EU Competition Commission has asked for clarifications on the deal reached by Veneto Banca SpA and Banca Popolare di Vicenza SpA to settle possible shareholder claims on earlier losses as the agreement could breach EU rules on state aid, Milano Finanza writes. Meanwhile, Veneto Banca is expected to report a 2016 net loss of €1.4 billion, according to Il Sole 24 Ore.

NORDIC COUNTRIES

* Online lender Mybank has become Norway's newest bank and will try to attract customers by offering competitive interest rates on savings accounts and low interest rates on consumer loans, Dagens Næringsliv reports.

* Icelandic Finance Minister Benedikt Jóhannesson said his country would assess pegging the krona to another currency, probably the euro or pound, noting that maintaining the free-floating krona is "untenable," the Financial Times writes. Jóhannesson said pegging Iceland's currency against the Canadian dollar or Norwegian krone would be "absurd" as both currencies have depreciated while the krona has appreciated 20% in the past year.

EASTERN EUROPE

* Otkritie Financial Corp. Bank increased its holding in Russian insurer PAO Rosgosstrakh to 19.8% from 4.4% in a repo deal, news agency RBK reports. The transaction is reportedly part of preparations for a merger between Otkritie Holding JSC and Rosgosstrakh Group.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Ousted South Korean president arrested; YES Bank issues 49B rupees of shares

Middle East & Africa: Gulf banks close merger; Fitch warns of SA review; Togo banks to merge

Latin America: Condemnation over Venezuelan supreme court power grab; Banxico hikes rate

North America: Wells must face RMBS suits; BofI Holding reportedly under money-laundering probe

North America Insurance: Ryan unwilling to engage with Democrats; Minnesota reinsurance bill up for vote

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Bailout delays threaten financial sector, Greek economy, Alpha Bank warns: The uncertainty caused by negotiations over Greece's bailout is causing an uptick in bad loans and a deterioration in the wider economy, Alpha Bank executives said.

PZU's planned foreign expansion seen as unlikely by analysts: Poland's PZU would like to derive up to a quarter of its profits from foreign operations, but with its excess capital going on a bank acquisition, analysts are convinced the firm will more likely focus on the domestic market.

Lloyd's of London says new EU base in Brussels will cost 'tens of millions': Lloyd's of London's CFO John Parry said the "bandwidth and skill" of the Belgian regulator was a key determinant in its decision to opt for Brussels as the location of the insurance marketplace's EU subsidiary after Brexit.

European target for toxic loan reduction achievable in 2017, says NBG CEO: Targets set out by the ECB's Single Supervisory Mechanism for the reduction of nonperforming exposures in 2017 are "achievable," National Bank of Greece CEO Leonidas Fragkiadakis said.

David Hutter, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Mike Hatzidakis, Ali Kayalar, Yael Schrage, Brian McCulloch, Sophie Davies and Helen Popper contributed to this report.

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