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Basel takes aim at window dressing; BPM sells NPLs; CS announces buyback


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Basel takes aim at window dressing; BPM sells NPLs; CS announces buyback

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.

Done deals

* Banco BPM SpA agreed to sell roughly €7.8 billion in bad loans to Credito Fondiario SpA and U.S. fund Elliott International LP. The deal will also include the creation of a specialized servicing platform with a banking license, with the company to be 70% owned by Credito Fondiario and 30% owned by Banco BPM.

* Norwegian Finans Holding ASA agreed to acquire a 40% stake in Ireland-based Lilienthal Finance Ltd., a wholly owned subsidiary of investment firm HBK Holding AS, which is controlled by Norwegian Air Shuttle ASA.

* Danske Bank A/S unit Danica Pension Livsforsikringsaktieselskab agreed to sell its Swedish pension unit Danica Pension Försikringsaktiebolag (publ) to an investor consortium comprising Nordic private equity fund Polaris and German private equity fund Acathia Capital GmbH. The unit will be sold for about 2.6 billion Swedish kronor, or about 1.9 billion Danish kroner.

Deals in the making

* JSC Alfa-Bank's owners informally discussed a possible sale of the Russian lender with local rival VTB Bank PJSC and UniCredit, several months and more than a year ago, respectively, the Financial Times reported. The owners were seeking between $7 billion and $8 billion for Alfa-Bank, but none of the talks advanced.

* UniCredit SpA CEO Jean Pierre Mustier dismissed the possibility of the lender merging with another bank until late 2021 at the earliest, according to a Euromoney report.

* PAO Sberbank of Russia received some bids for a 39.2% stake in Croatian food producer and retailer Agrokor, which is undergoing a restructuring.

* Germany's government is in high-level talks to find ways on how it could assist a potential merger between Deutsche Bank AG and Commerzbank AG.

Regulatory actions

* The Basel Committee on Banking Supervision proposed tightening rules to prevent banks from artificially boosting their leverage ratios, so-called "window dressing," thereby creating a false impression of their core strength. The committee said it noticed heightened volatility in money markets and derivatives markets around key dates, suggesting potential regulatory arbitrage by some banks.

* The Central Bank of the Russian Federation canceled the banking license of JSC Zlatkombank for a range of violations, including failure to comply with anti-money laundering and terrorism financing legislation.

* The EU approved a joint venture between Spanish bank Banco Santander SA's consumer finance division and the financing arm of South Korean car manufacturer Hyundai Motor Co. The joint venture will be based in Germany.

In other news

* Otkritie Holding JSC withdrew a 28 billion Russian ruble suit against the Russian Deposit Insurance Agency and former unit National Bank Trust PJSC.

* Credit Suisse Group AG intends to boost its dividend and launch a two-year share buyback program that could total up to CHF3 billion, the company said Dec. 12.

Featured during the week on S&P Global Market Intelligence

Credit Suisse CEO: We can raise dividends when regulators stop changing rules: Tidjane Thiam defended his bank's dividend policy, saying Credit Suisse needed a high buffer for "things outside of its control" such as regulatory changes. The bank's first share buyback plan since 2006 was met with lack of enthusiasm on the market.

UniCredit posts lowest return on risk-weighted assets in Q3 among EU, US banks: Chart Watch: The Italian lender's third-quarter returns on risk-weighted assets stood at 0.09%, down 318 basis points compared to a year earlier, according to data from S&P Global Market Intelligence.

Shares surge after Unicaja, Liberbank confirm potential tie-up talks: The banks confirmed preliminary talks after a Spanish paper reported the lenders had hired investment banks to advise them. The transaction would take place through a capital increase by Unicaja and a share swap with Liberbank shareholders.