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Texas banks in deal; Morgan Stanley cutting 1,500 jobs; Cboe buying EuroCCP


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Texas banks in deal; Morgan Stanley cutting 1,500 jobs; Cboe buying EuroCCP

Arlington, Texas-based BancAffiliated Inc. agreed to acquire Odessa, Texas-based Southwest Bank from Odessa SouthWest Bancshares Inc. in a stock-and-cash transaction. Under the agreement, BancAffiliated unit Affiliated Bank NA and Southwest Bank will merge, with Southwest Bank as the surviving entity. The deal is expected to close during the second quarter of 2020.

ArrowMark Partners agreed to acquire the platform and assets of StoneCastle Asset Management LLC, the external investment adviser to StoneCastle Financial Corp., through its subsidiary StoneCastle-ArrowMark Asset Management LLC. StoneCastle Financial's board appointed StoneCastle-ArrowMark Asset Management as the new investment adviser to StoneCastle Financial, subject to stockholder approval and the closing of the deal.

Confirming a recent media report, Cboe Global Markets Inc. agreed to acquire the Netherlands' European Central Counterparty N.V. for an undisclosed amount, subject to regulatory approvals. The deal is expected to finalize in the first half of 2020.

Morgan Stanley is cutting about 1,500 jobs globally, representing roughly 2% of the firm's total workforce, Bloomberg News reports, citing people with knowledge of the matter. The reductions are directed toward the technology and operations divisions, but also includes employees in sales, trading and research operations. Morgan Stanley reportedly plans to take a fourth-quarter charge of $150 million to $200 million related to the cost of the job cuts.

As part of a strategy to boost its $150 billion alternatives business, JPMorgan Chase & Co. is looking to raise as much as $1 billion for its mezzanine fund through its asset and wealth management arm, sources told Bloomberg News. The fund will reportedly focus on offering financing to firms using a hybrid of equity and debt.

An Australian criminal cartel lawsuit against Citigroup Inc. and Deutsche Bank AG was postponed after defense lawyers complained that the prosecution provided them a late-night redacted key witness statement the previous day, Reuters reports. The delay raises the risk of pre-trial hearings running into 2020, according to the report.

French markets regulator Autorité des marchés financiers imposed a €20 million fine on Morgan Stanley's U.K-based unit, Morgan Stanley & Co. International PLC, for allegedly manipulating the price of 14 French government bonds and eight Belgian bonds, as well as prices of French sovereign bonds futures contracts.

Sterling Bank and Trust FSB, a wholly owned subsidiary of Sterling Bancorp Inc., voluntarily and temporarily suspended its Advantage Loan program Dec. 9. in light of "an ongoing internal review of the program's documentation procedures." The company said in a regulatory filing that it is "difficult to estimate" how long the suspension will last but warned that if it is unable to replace the loan production volume from the program in a timely matter, or if it decides to alter the program, the company's results of operations could be adversely impacted.

According to a study conducted by law firm Cadwalader Wickersham & Taft and consulting firm Sia Partners, large banks are making the fastest progress in the transition away from the London interbank offered rate, expected to be discontinued after 2021, The Wall Street Journal reports. This is a result of the larger resources at disposal of these banks along with connections with regulators and experience of adjusting to systemic changes, the study found. Regional banks plan to take the transition on priority from 2020, it added.

More than 80 Japanese banks have showed interest in joining JPMorgan Chase & Co.'s blockchain technology-powered Interbank Information Network to encourage anti-money laundering measures, Bloomberg News reports, citing Daizaburo Sanai, an executive director at the bank.

In its Semiannual Risk Perspective, the Office of the Comptroller of the Currency described the federal banking system as "sound" due partly to a favorable credit environment and economic growth in the U.S. The report, however, flagged risks to the industry from adoption to new interest rate benchmark, technological advancement and innovation in core banking systems, cyclical changes and volatility in interest rates.

Invesco Ltd. founder and former Chairman and CEO Charles Brady died Dec. 7 in Atlanta. Brady was 84.

In other parts of the world

Asia-Pacific: Bank Mandiri names new head; Australia OKs IOOF acquisition bid

Europe: Deutsche warns of headwinds; Cboe to acquire EuroCCP; Kazakh banks to get aid

Middle East & Africa: Moody's revises outlook on African banks; Banco de Fomento Angola Q3 profit down

Now featured on S&P Global Market Intelligence

Agriculture loan delinquencies rise in Q3'19, but some see signs of optimism: Agricultural loan delinquencies increased in the 2019 third quarter as the industry continues to struggle. In dairy, dozens of farms have filed for bankruptcy over the last year, but some experts are optimistic given recent price stabilization.

De novo banks class of 2019 — New Jersey-based PiNG Bank files: Jersey City-based PiNG Bank filed to form a new bank on Nov. 27, marking the 20th application of the year and the first in New Jersey.

South Carolina bank M&A jolts to life: When United Bankshares Inc. announced its acquisition of Carolina Financial Corp., it was not only the largest amount ever paid for a South Carolina bank, it was also the most expensive deal in the state since Cooperative Bankshares Inc. offered to buy Bank of Jefferson at a valuation equal to 267.1% of the company's tangible common equity in March 2007.

As CECL implementation approaches, several banks 'scrambling' to finish models: Several banks have yet to provide an estimate on the expected effects , with one month left for meeting the current expected credit loss accounting standards' implementation deadline.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was down 0.22% to 26,436.62, and the Nikkei 225 inched decreased 0.09% to 23,410.19.

In Europe, around midday, the FTSE 100 decreased 0.93% to 7,166.27, and the Euronext 100 decreased 1.04% to 1,111.47.

On the macro front

The NFIB Small Business Optimism Index, Productivity and Costs and Redbook are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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