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Fresh UK insider-trading probe; Piraeus in €328M deal; France vs. Credit Suisse


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Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022

Fresh UK insider-trading probe; Piraeus in €328M deal; France vs. Credit Suisse

* The ECB will likely keep it its lending rates negative, having announced a third round of targeted longer-term refinancing operations, or TLTRO, slated for September, Bloomberg News wrote. Banks in Italy and Spain, however, are expected to have reduced access to the scheme, as the central bank will consider overall TLTRO balance. Meanwhile, Oxford Economics said ahead of the ECB's monetary policy meeting this week that the regulator will likely revise in June its rate guidance for a rate increase.

* A group of 14 financial firms in the U.S., Europe and Japan led by UBS Group AG has invested £50 million in new crypto-currency platform Fnality International, which will develop the utility settlement coin, a bitcoin-like token designed to settle cross-border trades, The Wall Street Journal reported. Other banks involved in the project include Barclays PLC, Banco Santander SA, Commerzbank AG and ING Groep NV.


* The U.K. Financial Conduct Authority is investigating claims that a Citigroup Inc. employee with access to price-sensitive information on large deals leaked tips before the deals became public, news outlets including The Wall Street Journal and the Financial Times covered. The fresh probe signals that an ongoing trial on an insider network may be wider than previously known.

* London Stock Exchange Group PLC agreed to acquire France-based data provider Beyond Ratings SAS for an undisclosed amount to bolster its information services business, particularly on environmental, social and governance matters. LSE said its existing FTSE Russell index would explore multi-asset solutions using Beyond Ratings' data, risk models and ESG research forte.

* HSBC Holdings PLC has moved to end its long-term corporate broking partnership with U.S.-based Goldman Sachs Group Inc. following a review led by CFO Ewan Stevenson, insiders told Sky News. The group's executives are believed to have not yet identified a replacement for Goldman Sachs. It is unclear if HSBC would also split with Credit Suisse Group AG.

* Neil Woodford's flagship fund, Woodford Equity Income Fund, has suspended redemptions for at least 28 days, effective immediately, as the it looks for ways to reposition illiquid investments, news outlets including Bloomberg News and Sky News covered. The decision reportedly follows a request from the Kent County Council to withdraw some £250 million it had invested.

* U.K. payments firm WorldRemit Ltd. aims to raise $175 million in a series D funding round led by TCV, Accel and Leapfrog Investments, subject to regulatory approval. The company said it would use the funding to further drive growth and to diversify its products.

* British fund manager Glennmont Partners raised €850 million in its third funding round for clean energy, the proceeds from which will be used to invest in renewable projects in Europe and the U.K., Reuters noted.


* Commerzbank AG faced serious IT problems yesterday with numerous payment transfers not executed, Der Spiegel wrote. The bank confirmed the glitch and said it will reprocess the payments.

* Switzerland-based Union Bancaire Privée UBP SA and France's Rothschild & Co. SCA stuck a private equity partnership, under which the banks will jointly provide private and institutional clients strategy to diversify their private equity portfolios.


* Credit Suisse Group AG is under investigation by France's Parquet National Financier for allegedly aiding and abetting clients evade tax, reported. A spokesperson for the Zurich-based group said it has not been aware of any further action by French authorities since April 2017, around the same time when the PNF searched the bank's premises in Paris, London and Amsterdam.

* The Scor SE-sponsored Atlas Capital UK 2019 PLC catastrophe bond has closed. The transaction will provide the group with multiyear risk transfer capacity of $250 million against named storms in the U.S., earthquakes in the U.S. and Canada and windstorms in Europe.

* France's CNP Assurances SA bought the 49.9% stake held by Bank of Cyprus Holdings PLC in CNP Cyprus Insurance Holdings for €97.5 million to fully own the company. The deal is subject to regulatory approval and is expected to close in the second half.

* ING Groep CEO Ralph Hamers said there is limited logic for cross-border combinations between EU banks as the bloc's banking union initiative is still incomplete, Reuters reported.

* The Belgian central bank has requested banks to be more cautious when granting loans, De Tijd reported. The Belgian government will temporarily increase the banks' capital requirements to slow down an increase in lending, according to the report.


* Caixa Geral de Depósitos SA is scheduled to pay €200 million in dividends to the Portuguese state on Wednesday, Jornal de Negócios reported. It will be the bank's first payout to the government since 2010. The amount corresponds to 59% of the €496 million profit it recorded in 2018.

* The liquidation committee of Banco Espírito Santo SA did not recognize the credit requested by Venezuelan state oil company PDVSA, claiming the €2 billion investment was transferred to Novo Banco SA after the bank collapsed, Jornal de Negócios wrote. Aside from PDVSA, more than 20,000 entities reclaimed payments from investments but were not recognized by the commission.


* Greece's Piraeus Bank SA will sell 80% of its internal recovery banking unit to Sweden's Intrum AB for €328 million and retain a 20% stake in the entity, which will be transformed into a new servicing platform for nonperforming assets. The new platform will exclusively manage the Greek bank's stock of nonperforming exposures and all new inflows for an initial 10-year period, along with a second servicing platform for the lender's real estate-owned assets, as well as new inflows.

Meanwhile, Piraeus Bank swung to a net result attributable to shareholders from continuing operations of €14 million in the first quarter from a year-ago loss of €79 million. The Athens-based lender plotted a new five-year strategy, aiming to reach a single-digit nonperforming exposure ratio, a cost-to-income ratio in the low 40s, a return on tangible equity of a high single digit and a regulatory capital 200 basis points above expected requirement by 2023.

* Giuseppe Conte, Italy's prime minister, threatened to stand down if the League and the Five Star Movement, the two main political parties in the country, do not resolve their disagreement, Bloomberg News wrote.

* The Italian central bank granted SIA S.p.A. the tender to manage the Centrale di Allarme Interbancaria, the computerized archive of illicit bank and postal checks and credit and debit cards, for an eight-year period.

* Atos is once again eyeing the possibility of a deal with SIA after a 2009 attempt to acquire SIA fell through, MF said.

* Banco BPM SpA CEO Giuseppe Castagna said M&A activities would be part of the Italian bank's new business plan, but cautioned that there should be a "clearer political and macroeconomic environment in order to understand where Italy is going," Reuters reported, citing Affari & Finanza.

* BPER Banca SpA is examining the possibility of investing in Banca Carige SpA although management has not yet made a decision about taking part in a Carige rescue, MF said. Separately, private equity group Hellmann & Friedman has begun evaluating the possibility of an investment in Carige, Il Messaggero said.

* TCS Group Holding PLC is seeking to raise $300 million in a primary capital increase through the issuance of new shares equivalent to as much as 10% of the company's issued share capital. The capital hike will be done through a bookbuilding process to institutional and other qualified investors.


* Nordea Bank Abp is offering a 10-year term mortgage loan at a 1% fixed interest rate in Denmark, the lowest ever offered to the home mortgage market in the country, Dagens Næringsliv wrote.

* U.S.-based PayPal Holdings Inc. has pumped €10 million into Sweden-based financial data provider Tink AB, Reuters reported. Tink will allocate the funding for its expansion and for product development.


* Lenders connected to the Russian central bank's instant payment system, want the regulator to provide them with credit support to ensure the uninterrupted operations of the system, especially during weekends and bank holidays, and to prevent the suspension of payments and potential image problems for the system, Kommersant reported.

* The Polish Financial Supervision Authority refused to approve the planned merger of Getin Noble Bank SA and Idea Bank SA, arguing that capital shortage would pose risks to deposits held at the banks in case of the merger, Parkiet reported.

* Polish banks could face challenges arising from low profitability, news agency PAP reported, citing the Polish central bank's financial stability report. The issue would particularly affect smaller banks, making them more vulnerable to shocks and reducing their ability to absorb losses. The central bank also advised local lenders to monitor risks associated with consumer loans and be cautious with real estate financing due to high activity on the local housing market, PAP said.

* The Kazakh central bank held its policy rate at 9.0%, saying inflationary expectations remain below annual inflation, Reuters noted.


Asia-Pacific: IAG exits New Zealand life insurance business; Fitch cuts ICICI Bank's ratings

Middle East & Africa: Absa's Ghanaian unit fined; Kenya moves to curb illicit flows

Latin America: Brazil mulls 20B reais fiscal boost; Dominican Republic maintains key rate

North America: Goldman buying PE-backed Capital Vision; Wells seeks to settle tax credit probe

Global Insurance: Humana rules out Centene deal; Scor's $250M cat bond; $4.6M Buffett lunch


Big tech risks for insurers 'dwarfed' by the scale of the opportunity: The biggest challenge insurers face from technology is in figuring out how to take advantage of the opportunities it presents while not disrupting existing businesses too much, said KBW's co-head of European research, William Hawkins.

Credit Suisse, BNP Paribas lead the global i-bank pack in Q1 YOY revenue growth: The European firms were the only two among 13 leading global investment banks to book first-quarter trading revenues that were higher than a year ago. On a quarterly basis, all banks saw revenue growth, rebounding from the turmoil in late 2018.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni 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.