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Scope cuts Deutsche; Abanca closes in on Liberbank bid; NordLB, Helaba post Q1


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Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022

Scope cuts Deutsche; Abanca closes in on Liberbank bid; NordLB, Helaba post Q1

* The European Union could appoint its chief Brexit negotiator, Michel Barnier, as head of the European Commission as the horse-trading for the bloc's top jobs begins following the parliamentary elections, insiders told Bloomberg News. European Council President Donald Tusk said he aims to have at least two women in senior posts in the EU this year, Reuters reported.

* Meanwhile, incumbent European Commission President Jean-Claude Juncker said the EU will not renegotiate the Brexit deal that outgoing British Prime Minister Theresa May agreed, Reuters wrote. Juncker's comments come amid calls by U.K. Foreign Secretary Jeremy Hunt for a new withdrawal agreement and negotiating team.


* Barclays PLC is preparing to reenter the U.S. home loans market to bring additional revenues to its investment banking unit, Reuters reported. The British lender's head of securitized products, Scott Eichel, is leading the charge and has assembled a team of over 140 securitization bankers and traders.

* HSBC Holdings PLC is looking to increase its Asian retail wealth management staff by roughly 300 by year-end, the bank's head of retail banking and wealth management for Asia-Pacific, Kevin Martin, told Reuters. Martin added that HSBC will sharpen its focus on Singapore as the bank expects the country to be a "growth engine" in the next few years.

* British asset manager Schroders PLC acquired Munich-based real estate boutique Blue Asset Management, which manages €1.2 billion of assets on behalf of its clients across Germany, Austria and Switzerland.


* Scope Ratings downgraded Deutsche Bank AG's issuer rating and senior preferred debt rating to BBB from BBB+, reflecting the agency's view that high costs and regulatory scandals have left the German bank facing a steep path on the road to achieving sustainable profitability.

* Speaking at a New York conference, Deutsche Bank CEO Christian Sewing said he wants to keep a "substantial" business in the U.S. for private, corporate and institutional clients and did not mention details of planned cuts in its investment banking unit in the country, Handelsblatt wrote.

* Norddeutsche Landesbank Girozentrale's first-quarter consolidated profit rose to €54 million from the adjusted €43 million in the same period in 2018. The German shipping lender further reduced costs and total assets over the quarter, in line with its ongoing restructuring, but is still waiting on final regulatory approval for its state-backed recapitalzation.

* German prosecutors will provide broader details of how several global financial institutions used a dividend-stripping technique to help clients avoid taxes, insiders told Bloomberg News. The banks reportedly include M.M.Warburg & CO (AG & Co.) KGaA, Deutsche Bank, BNP Paribas SA, Société Générale SA and Merrill Lynch & Co. The case, said to be the most advanced in the cum-ex tax probe, covers losses of as much as €447.5 million for the government.

* UBS Group AG Chief Compliance Officer Markus Ronner said the Swiss lender expects regulatory costs to remain substantial over the coming years but would be lower than high levels it has incurred since 2014, Reuters reported. UBS expects regulatory expenses to be approximately CHF700 million annually.

* A U.S. court of appeals acquitted UBS Group in the case of collapsed energy firm Enron Corp., with judges in a class action filed by investors concluding that the Swiss bank cannot be held responsible for losses from Enron shares, Bloomberg reported.

* Landesbank Hessen-Thüringen Girozentrale reported first-quarter consolidated net profit of €42 million, down 19.2% year over year.

* Austrian financial market supervisory authority FMA significantly restricted trade of two risky financial products for retail investors by prohibiting marketing, distribution and sale of binary options and limiting contract for difference deals.


* French prudential regulator ACPR has called on banks in the country to speed up their restructuring process in order to maintain their profitability, Les Echos wrote.

* Bernard Delas, head of France's Autorité de Contrôle Prudentiel et de Résolution, or ACPR, has called on Scor SE and SGAM Covéa to resolve their conflict and reach an amicable agreement to ensure financial stability, Reuters wrote. The France-based companies have been embroiled in a heated dispute for months after Scor rejected Covéa's offer to buy the reinsurer.


* Spanish midsize lender Liberbank SA's shares rose 5.5% yesterday following a report that rival ABANCA Corporación Bancaria SA was close to making a bid for the bank.

* António Tomás Correia, president of the mutual association that owns Portugal's Caixa Económica Montepio Geral SA, condemned the Portuguese central bank's recent decision to fine him €1.25 million for failings during his time as CEO of the savings bank, Jornal de Negócios reported. Separately, Tomás Correia called for further investigation into the Boat Carvela debt operation involving Credit Suisse that caused the state lender losses of €340 million.

* Shareholders in Portugal's largest listed bank, Millennium BCP, will receive a dividend from June 11, marking its first dividend payment since 2010, Expresso and Jornal de Negócios reported. The bank will distribute 10% of its 2018 net profit, which totaled €301.1 million.


* The EU may ask Italy to pass a supplemental budget in order to meet the commitments made at the end of last year, Il Messaggero wrote, adding that Finance Minister Giovanni Tria will reply that further measures, in the current context of low nominal growth, risk being counterproductive.

* Italian banks in April increased their exposure to Italian government BTP bonds to €403 billion from €395.7 billion, exceeding the €400 billion mark for the first time in two years, MF reported.

* Banca Monte dei Paschi di Siena SpA sold a €130 million portfolio of unlikely-to-pay loans to Bank of America Merrill Lynch as part of its plan to reduce such loans by €2 billion at year-end, Il Sole 24 Ore reported.

* Cassa Centrale Banca Gruppo Bancario CEO Mario Sartori said the Italy-based lender is in discussions with a number of bidders interested in acquiring its €300 million portfolio of bad loans, according to Reuters. The entity, which is made up of small cooperative banks, is looking to complete a deal by 2019-end.

* Banco BPM SpA canceled the role of director general after the resignation of Maurizio Faroni due to the diamond scandal and named Edoardo Ginevra, head of nonperforming loans since 2017, as new CFO while Carlo Bianchi becomes new chief lending officer, MF reported. Il Messaggero also covered.

* Leonardo Rubattu could step down from the role of director general of Iccrea Holding SpA with the likely successor being Mauro Pastore, currently director general of the Rome Cooperative Bank, MF reported.

* Credito Emiliano SpA established Avvera, which will be operational from July and will focus on consumer lending and mortgages, Il Sole 24 Ore reported.


* In its new stability report, the Swedish central bank warned that banks could face loan losses of 771 billion kronor in the event of an extensive financial crisis, Svenska Dagbladet reported. The sum is 5x higher than what financial regulator Finansinspektionen and the EU has presented under the same scenario.

* Finansinspektionen, meanwhile, said commercial real estate companies are vulnerable to disruptions, which means that banks need increased risk weights to handle exposures to the market, Affärsvärlden reported. The regulator suggested that an increase to at least 30% from the current 23% is likely.


* U.S. Ambassador to Russia Jon Huntsman will not attend the upcoming St. Petersburg International Economic Forum to protest against the prosecution of Baring Vostok Capital Partners Ltd. founder Michael Calvey in Russia, Reuters reported. Calvey was detained in February over the alleged embezzlement of 2.5 billion Russian rubles from Public Stock Co. Orient Express Bank, in which Baring Vostok is a majority shareholder. He denies any wrongdoing.

* The Polish Financial Supervision Authority cleared the acquisition of Société Générale SA unit Euro Bank SA by Millennium BCP unit Bank Millennium SA, news agency PAP reported. Bank Millennium agreed to acquire a 99.78% stake in Euro Bank in November 2018.

* Poland-based Getin Noble Bank SA decided to withdraw from a deal to sell a 25% stake in brokerage unit Noble Securities to the lender's controlling shareholder Leszek Czarnecki, Parkiet reported. The bank reportedly decided that the transaction is no longer justified from an economic point of view and would not generate a positive financial result for the lender as initially expected in its financial recovery plan.

* Polish Finance Minister Teresa Czerwińska could be dismissed from the post as part of upcoming changes in the country's government, news agency PAP said. Bloomberg noted that Prime Minister Mateusz Morawiecki could take over Czerwińska's responsibilities.

* Ukraine-based JSC CB PRIVATBANK appealed the April ruling of Kiev District Administrative Court that declared the 2016 nationalization of the lender as unlawful. The court's decision was also recently appealed by the Ukrainian finance ministry and the central bank.


Asia-Pacific: Pakistan bourse CEO resigns; Kenanga gets regulatory nod to buy Libra Invest

Middle East & Africa: Israel's First International Bank sees Q1 profit up; MTN's mobile money push

Latin America: Banco de Bogotá's profit rises; BCI to enter payment processing market

North America: Global Payments buying Total System in $21.5B deal; Nasdaq pulls Oslo Børs bid

Global Insurance: Centene urged to weigh sale; NFIP in peril; First American Financial data leak


Banks capable of climate change transition without regulation, says Santander: The Spanish bank's global head of sustainability says banks will always aim to be ahead of regulators when it comes to tackling the risks climate change poses to their balance sheets.

Hiscox UK 'through the worst' of IT woes, says CEO: The specialist insurer's U.K. arm reported "subdued" growth in the first quarter because of the shift to a new IT system, and CEO Bob Thaker said restoring service to brokers is his "No. 1 priority."

KCB's 'overpriced' deal to acquire NBK could set it back years, warn analysts: The acquiring lender will effectively get a near-monopoly on public sector deposits though the deal, but it comes with risks due to National Bank of Kenya's high rate of nonperforming loans.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Yael Schrage, Stephanie Salti, Sophie Davies and Helen Popper 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.