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CaixaBank share sale; Commerzbank job cuts; AEGON's Ukraine exit


Commercial Banking: June 22nd Edition


Commercial Banking Newsletter June Edition - 2022


Street Talk | Episode 96: Considering recession risks, prospects that the Fed achieves a 'soft landing'


Insight Weekly: US recession outlook; mortgage activity slowdown; climate disclosure push

CaixaBank share sale; Commerzbank job cuts; AEGON's Ukraine exit

EBA chief says stateaid could be used to tackle NPLs: European Banking Authority ChairmanAndrea Enria said state aid should be used to solve a bank's problems with badloans if necessary, Reuters reports.Enria made the statement when asked if the use of public funds could bereasonable to help solve BancaMonte dei Paschi di Siena SpA's bad loan woes.

* ECB President Mario Draghi said yesterday that while lowinterest rates tend to squeeze banks' net interest margins and lead to"downward rigidity" in their deposit rates, the high number of banks inthe eurozone is also partly to blame for weak profitability in the bankingsector, the Financial Times reports.

* The ECB allotted €45.27 billion for banks in the second ofits four new targeted longer-term refinancing operations, following lukewarmdemand during the first TLTRO II in June, accordingto Reuters.

* Global investment banks expect the City of London to loseits ability to clear euro-denominated swaps after the U.K. officially leavesthe EU and are preparing plans to deal with such event, Bloomberg News writes.Officials from both France and Germany have called for clearing in euro swapsto be transferred to their countries in a post-Brexit EU.


Johnson hints atArticle 50 trigger timetable: U.K. Foreign Secretary Boris Johnson said heexpects the British government to trigger Article 50 of the Lisbon Treaty andstart formal Brexit negotiations "by the early part of next year," The Wall Street Journal reports.Johnson added that he does not think the U.K. will need the full two-yearperiod for negotiations stipulated in Article 50 to work out the country's newrelationship with the EU.

* The Bank of England's Financial Policy Committee reaffirmedthat it expects to maintain the countercyclical capital buffer rate for banks'U.K. exposures at 0% until at least June 2017. The FPC said the current outlookfor financial stability in the U.K. remains challenging, and that heighteneduncertainty regarding the near-term macroeconomic outlook and Britain's futurerelationship with the EU are reinforcing domestic risks.

* BoE Governor Mark Carney joined the chorus of centralbanks saying monetary policy alone cannot address the low inflationenvironment, citinga growing consensus that "escaping this low-growth, low-inflation trapwill require a rebalancing between monetary, fiscal and structuralpolicies." Carney said structural reforms could not only raise potentialgrowth directly but also give monetary policy more traction.

* The U.S. Commodity Futures Trading Commission to pay a $500,000civil money penalty to settle charges of record-keeping failures. The unit was alsorequired to cease and desist from committing further violations of relevantCFTC regulations.

* Randall& Quilter Investment Holdings Ltd. today announced theacquisition of United States Sports Insurance Co. LLC, a wholly owned captiveinsurer of USA Swimming Inc. R&Q paid a total consideration of $2.1million, financed by a drawdown on the group's revolving credit facility withRBS.

* Novae GroupPlc said CFO Charles Fry is steppingdown from the board today and will leave the group with effect from Oct.31. Novae named Reeken Patel interim CFO while it undertakes a search for apermanent replacement.

* Consumer protection group Which? calledon British banks to improve protection for customers against bank transferfraud, saying safety standards have not kept pace with the increasing number ofbank transfers. Which? wants regulators to formally investigate the scale ofbank transfer fraud and how much it is costing customers, and to propose newmeasures to ensure consumers are better protected if they are tricked intomaking a bank transfer.

* LondonMarket Group namedChris Beazley its first permanent CEO. Beazley takes over Nov. 7 from Ben Reid,who was seconded from EY as interim CEO and will return to the auditing firm asan executive director.

* The Central Bank of Ireland saidthe net asset value of investment funds in the country rose 4.3% over thesecond quarter to €1.457 trillion due to positive revaluations of €39 billionand strong transactions of €22 billion in the period.


Commerzbank could cutmore jobs: CommerzbankAG is planning to eliminate thousands of jobs as it struggles with declining earnings due tolow interest rates and weak demand for loans, Reuters reports.The figure is expected to be much higher than the 1,500 jobs that were underrecent internal discussion. An insider said as many as one in 10 employeescould lose their jobs group-wide, adding that a reduction of 5,000 was"entirely plausible."

* Deutsche BankAG is closing its private banking arm in Australia as part ofefforts to streamline its operations, TheAustralian reports.The move will result in the loss of 15 jobs and affect three product offeringsin Australia: advisory, lending and portfolio management.

* Meanwhile, Deutsche Bank reshuffled management at severaldivisions including corporate and investment banking, naming Mark Fedorcik headof the division in the Americas to succeed Paul Stefanick, who was named to thenew role of chairman of global corporate and investment banking, ThomsonReuters' IFR reports.The bank will also establish an executive council at its debt capital marketsbusinesses, headed by Jeff Urwin as head of corporate and investment banking.

* Run-off platformFrankfurter Lebensversicherung AG, owned by Chinese investor Fosun, is taking overthe life insurance subsidiary of ARAG Holding SE. Thedeal, which Insurance Dayestimatesto have cost less than 30 million, gives Frankfurter Leben 92% ofARAG Lebensversicherungs AG and includes 322,000 contracts and 2.8 billion of invested funds.


AEGON exits Ukraine:AEGON NV entered intoan agreementto sell 100% of its shares in Aegon Life Ukraine PJSC to , marking the Dutch group'sexit from the Ukrainian market. TAS Group will merge Aegon Life Ukraine withits existing life insurance business under the brand TAS Life.

* 's sale of car andvehicle leasing company Arval to Belgian subsidiary BNP Paribas Fortis SA could happen at the end of 2016 orat the start of 2017, according to L'Echo. TheBelgian unit will make a capital increase to finance the deal. Les Echosalso has a report.

* BNP Paribasmobile bank Hello bank! clinched a partnership with crowdlending platform to enable its clients to lend money tosmall and medium-sized companies in exchange for an attractive yield, LesEchos writes.

* The VersaillesCourt of Appeal will rule today whether former rogue traderJérôme Kerviel will have to pay the bank €4.9 billion in damages, according to Les Echos and L'Echo. This amount reflects the level of losses that thebank purportedly incurred as a result of Kerviel's actions in 2008.

* La Caisse desDépôts announced the sale via a private placement of 4% of  its shareholding in Veolia, according to L'Agefi. Following the transaction, the publicentity will keep 4.62% of the capital of the group and 8.36% of its votingrights.

* FormerOptima Bank NV CEOJeroen Piqueur told a Belgian parliamentary inquiry into the bank's bankruptcythat he has no regrets about his management decisions, De Tijd reports.

*Belfius Banque SA isplanning to commercialize its technology for mobile banking for financialinstitutions abroad, De Tijd reports.The move will help the bankdiversify its revenue stream in a low rate environment, according to L'Echo.


CaixaBank sellsshares to fund Banco BPI bid: In an effort to boost its capital reservesfor its takeover bid for BancoBPI SA, yesterday sold sharesequivalent to nearly 10% of its capital for €1.32 billion, Reuters reports.The sale, the price of which represents a 3.67% discount on CaixaBank's closingprice yesterday, is expected to increase the Spanish bank's core capital ratiounder the strictest fully loaded criteria to between 13.6% and 14.2% from 11.5%at June-end.

* New documents obtained in the Bahamas offshore leaksshowed that Banco SantanderSA helped create more than 500 companies in the island nation overa 15-year period, accordingto El Mundo. A total of 560 companieswere supported by Santander between 1990 and 2015 through Santander Bank &Trust. A Santander spokesperson, however, said the bank's activity in theBahamas was legal.

* BancoPopular Español SA Chairman Ángel Ron called for an easing ofregulations to help smaller banks thrive, noting that they survived through thefinancial crisis without receiving state aid, unlike their bigger peers, EuropaPress reports.Ron indicated that regulation should not act as a strangle hold on medium-sizedbanks and underlined the need for political initiative to enable such banks tohelp finance and develop the economy.

* had sufficientprovisions at the time of its stock market debut according to documents sent toa judge investigating alleged irregularities in the IPO, El Economista reports.The bank had €10.6 billion in provisions in 2011 prior to the listing.

* The new president of Caixa Geral de Depósitos SA, António Domingues, willhave to take part in a parliamentary hearing in the commission inquiry into thebank on Tuesday. Dinheiro Vivo notes that the investigation willlook into the bank's management since 2000 to determine how the bank reachedthe stage of needing a recapitalization process.

* Portuguese banks are having a difficult time building upcapital, delivering adequate profits and boosting capital through earnings dueto a sluggish operating environment, according to FitchRatings. The agency believes that asset quality is still a major weakness forthe banking sector, making banks vulnerable to risks from the highly indebtedPortuguese economy.


MPS may turn to Italy for help: European regulators expect Banca Monte dei Paschi diSiena to ask the Italian government for support amid anticipation that thebank's cash call would fall short, euro zone officials tellReuters. Italy, however, is expected to oppose such a move if bank bondholderswere to suffer losses.

* Intesa SanpaoloSpA took approximately €5 billion at the ECB's second TLTRO II, according to Reuters.

* Bayview, Idea Fimit, Lindorffand a consortium composed of Apollo and FBS are in the short list to acquire agross €500 million nonperforming loan portfolio being sold by on behalf of 42Italian cooperative lenders, MF says.Due diligence is set to begin Oct. 3, with nonbinding offers expected byNovember.


Norway maintains bankcapital buffer rate: The Norwegian Ministry of Finance yesterday decidedto keep the countercyclical capital buffer rate for banks unchanged at 1.5%, inline with advice from the Norwegian central bank.

*Nordea Bank AB (publ)is to shut down its subsidiary operations in the Cayman Islands, Dagens Industri reports. Themove is linked to a group-wide streamlining program launched in 2015, which wasaccelerated in the wake of the Panama Papers scandal.

*Totens Sparebank'sdecision to restructure operations and improve profitability will lead to staffcutbacks, Dagens Næringsliv reports.The bank expects to complete this latest round of restructuring by the end of2017.

* FaroeIslands-based P/FBankNordik secured clearance from Iceland's competition authoritiesto sell insurance subsidiary Vørður to Arion Bank, Berlingske Business reports.The transaction cost is 278 million kroner. BankNordik expects to complete thedivestment by mid-October.


IMF slams Russia's financial sector review: The International Monetary Fundsaid in its notes regarding Russia's Financial Sector Assessment Program thatthe current model of financial recovery and bank resolution is flawed and that thedecision-making process for resolution measures using federal budget fundsshould require the approval of the Ministry of Finance, Kommersant reports.

* PAO Sberbankof Russia's investment arm, Sberbank CIB, intends to register onthe Shanghai Gold Exchange, Kommersantreports.

* The Polish Financial Supervision Authority will issue anopinion on the latest presidential proposal regarding relief for FX mortgageholders at the beginning of October at the latest, Parkiet reports.Under the proposal, banks would refund part of the spreads calculated ongranted forex loans to their clients.


Asia-Pacific: FSC to reveal Mega Bank's NY branch accounts; China to crack down onfake overseas M&A

Middle East and Africa:

Latin America: New head for BTG's private equity biz; Argentina plans eurobond

North America: Leon Cooperman prepares his defense; payday lenders get hit inCanada, California

North America Insurance: DOJ broaches Anthem-Cigna merger dispute; The Hartford's TalcottResolution up for sale


Capitalhit the price of victory as CaixaBank looks set to win BPI:CaixaBank looks finally to be on the brink of winning its battle for control ofPortugal's BPI following the removal of a cap on its voting rights cap. But thedeal might force it to raise capital to expand into a market riddled withproblems, said analysts.

Lloyd's ofLondon defends reserve releases as they boost H1 underwritingresult: Lloyd's of London's director of finance, John Parry, deniedthat the marketplace's insurers are using reserve releases to boost results inweak underwriting periods.

RBS runningout of options for Williams & Glyn as Santander walks away fromdeal: With the deadline for the sale of Williams & Glynlooming, RBS is coming under increasing pressure after Banco Santanderreportedly pulled out of a deal to buy the unit, while the DoJ may hit theBritish lender with a heavy fine.

Sheryl Obejera, EdMeza, Stephanie Salti, Meike Wijers,Jennifer Laidlaw, Mariana Aldano, Heather O'Brian, Mike Hatzidakis, GerardO'Dwyer, Beata Fojcik and Ali Kayalar contributed to this report.

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