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Commerzbank job cuts; Deutsche, BNP ink equities deal; UniCredit names chairman

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Commerzbank job cuts; Deutsche, BNP ink equities deal; UniCredit names chairman

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* Banks' lending and borrowing activity with non-bank financial institutions, such as investment funds and hedge funds, has risen sharply, according to the Bank for International Settlements. Non-bank financial institutions are increasingly integrated into the funding and lending patterns of international banks, with banks sourcing more of their funding in international currencies from such institutions, the BIS said in its quarterly review. The BIS also warned that hedge funds could expose banks to collateralized loan obligations, Bloomberg News noted.

* Meanwhile, the BIS said that the world's largest, most complex and interconnected banks have become less systemically important relative to peers. Researchers noted that there are important caveats to their findings, however, including the possibility that G-SIBs could exploit ways to take on risks that aren't adequately captured by regulators' scores.

* A total of 130 banks, including Deutsche Bank AG and Barclays PLC, joined a new framework backed by the United Nations to fight climate change, Reuters reported, citing Simone Dettling, banking team lead for the Geneva-based United Nations Environment Finance Initiative.

UK AND IRELAND

* Ireland-based Permanent TSB Group Holdings PLC sold €300 million of senior bonds which can be converted into equity, insiders told The Irish Times. The bonds carry an interest rate of about 2.13%.

* Investec warned of lower profits in the six months ending Sept. 30, compared to the prior-year period, due to challenging market conditions. Investec, which comprises London-listed Investec PLC and Johannesburg-listed Investec Ltd., said it expects headline earnings per share to be lower by about 15% to 18% over the period. Separately, the company made an £18.2 million gain from the sale of Investec Capital & Investments (Ireland) Ltd. to Brewin Dolphin Holdings PLC, The Sunday Times reported.

GERMANY, SWITZERLAND AND AUSTRIA

* Commerzbank AG mapped out a new strategic plan under which it is planning to close 200 branches and cut 4,300 jobs; integrate online bank comdirect bank AG by buying the 18% stake it does not own yet and delist it; and sell its 69.3% stake in Polish unit mBank SA. Pending approval from the supervisory board, the plan would involve investment of €1.6 billion, of which €750 million are earmarked for new technology and the rest for restructuring.

* Deutsche Bank AG agreed to transfer its global prime finance and electronic equities business to France-based BNP Paribas SA, pending regulatory approvals. Deutsche Bank, meanwhile, plans to add hundreds of staff and roughly €100 billion of assets to its wealth management unit, the Financial Times reported, citing an interview with the division's head, Fabrizio Campelli.

* Zurich Insurance Group AG appointed Peter Giger group chief risk officer, effective Oct. 1, subject to regulatory approval. He replaces Alison Martin, who became Zurich Insurance's CEO for Europe, Middle East and Africa and bank distribution, effective July 9.

* Iqbal Khan, a former head of international asset management at Credit Suisse Group AG who left the bank to become head of wealth management at UBS Group as of Oct. 1, has been tailed by private investigators on behalf of an unknown party in Zurich in recent weeks. After Khan noticed it and filed a criminal complaint, police arrested several people and Zurich's public prosecutor opened criminal proceedings for coercion and threat without further commenting on the issue, Inside Paradeplatz reported.

* The restructuring of Austria's Österreichische Volksbanken AG will lead to a cost reduction to €550 million this year compared to €615 million a year ago, Die Presse cited Director General Gerald Fleischmann as saying. He said he expected full year 2019 net profit for the group of €130 million, up from €115.2 million last year, and a further cost reduction to €500 million by 2020.

* Mainz-based North Channel Bk GmbH & Co. KG is allegedly involved in tax fraud and money laundering at a volume of €1.7 billion at the expense of the Danish and Belgian revenue services by exploiting weaknesses in the countries' tax systems, Süddeutsche Zeitung wrote.

FRANCE AND BENELUX

* Société Générale SA is planning to cut 530 jobs in its French retail division by 2023. Les Echos reported that two of 14 back offices would be closed, resulting in 360 job cuts out of a total of 3,000 in back-office staff.

* BNP Paribas' asset management unit is to cut about 100 jobs in Paris, or 10 % of its workforce, sources told L'Agefi.

* CNP Assurances SA will spend €1.53 billion to extend its exclusive distribution agreement with Caixa Seguridade in Brazil until February 2046, Les Echos and L'Agefi wrote. In August 2018, the two companies signed an exclusive agreement that would last until Feb. 13, 2041.

* Belgian bank KBC Bank NV has put money from its Czech subsidiary CSOB into an infrastructure fund in order to avoid being made to pay more taxes, De Tijd reported. The Czech Republic has plans to introduce a tax of up to 20% on the profits of foreign banks.

SPAIN AND PORTUGAL

* Banco de Sabadell SA securitized a €1 billion portfolio of consumer loans, a transaction that will allow it to deconsolidate them from its balance sheet, free up capital and generate an accounting surplus of €80 million before tax, Expansión reported. The operation will generate 10 basic capital points, so that the bank can close the year with a fully loaded common equity Tier 1 ratio of nearly 12%.

* Last week's floods in Spain could result in an insurance and reinsurance industry losses of above €287 million, Reinsurance News reported, citing analysts at Aon.

ITALY AND GREECE

* Italy-based UniCredit SpA appointed Cesare Bisoni chairman until the end of the current board's mandate in April 2021. Also, Martha Böckenfeld resigned as independent board member with immediate effect, saying she is going to take up an executive role which is incompatible with her current role.

* Banca Carige SpA shareholders approved a share capital increase of €700 million, which is part of the Italian bank's €900 million rescue plan. Over 90% of the bank's shareholders who attended a recent meeting voted in favor of the capital increase.

* Banca Generali SpA CEO Gian Maria Mossa told Affari & Finanza that the bank could make acquisitions in the private banking sector.

* Leonardo Del Vecchio could seek to change the rules for the appointment of the CEO of Mediobanca - Banca di Credito Finanziario SpA following his acquisition of a nearly 7% stake, Il Sole 24 Ore said, noting that current rules stipulate the CEO is chosen among the bank's three board members who have held an executive role for at least three years.

NORDIC COUNTRIES

* Danske Bank A/S named Johanna Norberg country manager in Sweden, Dagens Industri reported. Norberg previously worked as global head of capital markets at Danske Bank.

* Jyske Bank A/S lowered interest rates to minus 0.75% on corporate deposits and private individuals and levied a negative interest rate on private customers with more than 750,000 kroner in deposits. The decision comes in the wake of interest rate reduction by the ECB and by the central bank of Denmark.

* Danish authorities have filed charges of money laundering against Københavns Andelskasse, the small-sized Copenhagen-based lender that had its banking licence revoked in October 2018, FinansWatch reported. The country's financial services authority estimates that as much as 4 billion kroner in suspicious transactions passed through the bank in the 2017-2018 period, Berlingske Tidende reported.

EASTERN EUROPE

* State-owned JSC Russian Agricultural Bank could receive an additional 10 billion Russian ruble capital boost from Russia's budget by the end of 2019, having already obtained 15 billion rubles earlier this year, Vedomosti said. The additional financial resources are set to come from funds earmarked for the lender in Russia's 2020 budget.

* The London Court of International Arbitration ruled against PJSC Bank Uralsib in the lender's $8.6 million dispute with the holders of its subordinated debt, Vedomosti reported. Uralsib wrote off its subordinated debt following the lender's 2015 bailout by the Russian central bank, after which some of the debt holders launched arbitration proceedings against the bank to retrieve their investments.

* Polish lender Getin Noble Bank SA is facing a regulatory capital shortfall of 1.6 billion Polish zlotys and is working on an updated financial recovery plan, which it will present to the regulator at the beginning of October, news agency PAP reported. The lender also noted it will not be able to achieve a positive financial result in 2019.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: China sovereign fund posts FY'18 loss; NAB chief to start in December

Middle East & Africa: Investec warns of lower fiscal H1 profit; US sanctions Iran's central bank

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

First woman to run major UK bank will focus on costs and taking back control: Alison Rose will become the first woman CEO of a leading British high street bank on Nov. 1 when she takes charge of RBS, with Brexit and its economic impact a major factor due to the lender's concentration in the British market.

Leveraged loan market suggests Brexit little impediment to UK deals: In total, €7.83 billion of the European market's pipeline of deals comes from U.K. firms — including the debt backing the £5.9 billion take-private of Merlin Entertainments by a consortium of Blackstone, KIRKBI and CPPIB.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Stephanie Salti, 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.