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FCA reveals i-bank findings; BNP to sell Dutch bank; EC lays out reporting rules

Banking Essentials Newsletter December Edition Part 2

Banking Essentials Newsletter - November Edition

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University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts


FCA reveals i-bank findings; BNP to sell Dutch bank; EC lays out reporting rules

EC proposes reportingrequirements: As expected, the European Commission yesterday proposed theintroduction of public reporting requirements for the largest firms operating inthe EU and in tax havens to address concerns stemming from the Panama Papersscandal. The new rules would require about 6,500 large companies operating inthe union to annually disclose their profits and taxes on a country-by-countrybasis.

* Meanwhile, tax officials from 28 countries will today meetin Paris to launch a global effort to assess the information revealed by thePanama Papers, accordingto The Guardian. Panama'sattorney general late yesterday carried out a raid of law firm MossackFonseca's offices, Reuters notes.

* Standard & Poor's Ratings Services yesterday saidmultilateral lending institutions can accommodate an additional $1 trillion ofcredit exposures in aggregate, representing a 72% rise from the $1.5 trillionof exposure outstanding as of March 15.

UK AND IRELAND

FCA revealsi-bank findings: The U.K. Financial Conduct Authority today publishedthe interim conclusions of its investment banking market study, finding areasin primary capital market services where improvements could encouragecompetition. The regulator found that cross-selling could make it harder forbanks that do not offer lending facilities to compete for primary market services.The FCA also published a discussion paper on proposed improvements to providinginformation to investors during IPO processes.

* The IMF warned in its latest world economic outlook reportthat a British departure from the EU could do "severe regional and globaldamage" by disrupting established trading relationships. The IMF cut itsbaseline projection for global growth this year to 3.2%, broadly in line withlast year and down 0.2 percentage point from the last projection in January,saying global recovery has weakened further amid increasing financialturbulence.

* Meanwhile, the heads of Banco de Sabadell SA, cosmetics firm L'Oréal andengineering company Siemens, as well as business lobby groups from France,Germany, Spain and the Netherlands, will today meet with U.K. Prime MinisterDavid Cameron to argue in favor of Britain remaining in the EU, City A.M. writes.

* Shareholder advisory group Pensions & InvestmentResearch Consultants called on HSBCHoldings Plc shareholders to oppose the remuneration plans for thebank's executives, as well as Douglas Flint's re-election as chairman, at thebank's April 22 annual general meeting, Reuters reports.PIRC expressed concerns over HSBC CEO Stuart Gulliver's variable pay, whichexceeded 200% of his salary.

* CitigroupInc. intends to lay off about 70 employees in London this month andmay also cut approximately 200 jobs in operations and technology divisionsacross Europe, Bloomberg News reports.

* The FCA said yesterday that it former trader Paul White from engaging in any function related to regulated financialactivity and censured him for LIBOR-related misconduct. The FCA said it wouldhave fined White £250,000 if not for his serious financial hardship.

GERMANY, SWITZERLAND ANDAUSTRIA

Deutsche execsset to be cleared: DeutscheBank AG Co-CEO Jürgen Fitschen and ex-CEOs Josef Ackermann and RolfBreuer look increasingly likely to be cleared by a Munich court of attemptedfraud in a criminal trial related to the collapse of Leo Kirch's media empirein 2002, Bloomberg News writes.Prosecutors in their closing argument requested prison terms for Breuer andAckermann and suspended sentences — in exchange for payments of up to €2.5million — for Fitschen and former Chairman Clemens Börsig, but Judge Peter Nollsaid: "This trial so far has shown that the allegations are unfounded."

* Meanwhile, Deutsche Bank yesterday that it would freezeplans to add up to 250 jobs to its operations in Cary, N.C., after the stateenacted legislation curtailing protections for LGBT citizens.

* The bank also named James Boyle global co-head of itsderivatives business, insiders tellBloomberg News. Boyle, who joins from Citigroup, will also serve as head ofequities for the Asia-Pacific region.

* DZ BankAG and WGZBank saidyesterday that their boards of managing directors signed merger documents thatpave the way for the creation of a joint cooperative central institution. Theagreed exchange ratio for the deal, under which WGZ Bank will be absorbed by DZBank, is 67.6 DZ Bank shares with an imputed nominal value of €2.60 for 1 WGZBank share with an imputed nominal value of €100.

* DekaBankDeutsche Girozentrale saidyesterday that it will take full control of S Broker AG & Co. KG followinga deal with fellow shareholders. S Broker serves as the online broker for thesparkasse group and is currently 69.4% owned by nine sparkasse associations and30.6% owned by DekaBank.

* German bad bank FMS Wertmanagement AöR, which is winding down the assetsof the nationalized Hypo Real Estate Holding AG, saidyesterday that it had reduced the nominal value of the remaining portfolio by10.9% in 2015, to €94.7 billion from €106.3 billion.

* BankhausLampe KG unveiledplans yesterday to expand its business activities in the U.S. through newlyestablished Lampe Capital North America LLC in New York. The bank said its U.S.business would continue to focus on institutional investors.

FRANCE AND BENELUX

KBL to buyDutch private bank: BNPParibas SA's BNP Paribas Wealth Management preliminarily to sell Dutch privatebank Insinger de Beaufort to KBLEuropean Private Bankers SA, LesEchos and L'Echonote. Luxembourg-based KBL plans to merge Insinger de Beaufort and ,its local entity, to create the third-largest private bank in the Netherlands,with €22.5 billion under management, L'Agefinotes.Het Financieele Dagblad also reports.

* SociétéGénérale SA CEO Frédéric Oudéa met yesterday with Michèle André,president of the French senate's finance committee, accordingto Les Echos. Oudéa saidhe was totally sincere when he declared in 2012 in front of a committee ofinquiry that SocGen's branches in Panama had been closed. This testimony hasbeen challenged since by the disclosure of the Panama papers scandal. A newhearing with Oudéa will be held at the beginning of May, L'Agefi notes.

* Dutch Finance Minister Jeroen Dijsselbloem ordered aninvestigation by tax authorities of ABN AMRO Group NV's practices in managing clients'assets via a unit in Guernsey, HetFinancieele Dagblad writes.

SOUTHERN EUROPE

Italy NPL fundeyes 6% to 7% returns: The newly created Atlante fund managed by Quaestioaims to achieve returns of 6% to 7% per year, MF writes.According to Corriere della Sera, the fund aims to reduce nonperforming loans onbanks' balance sheets by a gross €80 billion out of a total of €200 billion.Finance Minister Pier Carlo Padoan tellsIl Sole 24 Ore that the reduction ofNPLs will lead to greater lending to the real economy and will make thetransmission of monetary policy more efficient. He also said there is no riskof European authorities blocking the plan, Reuters notes.

* Meanwhile, the Atlante fund is expected to file as earlyas today a request with the ECB and the Bank of Italy to take a majority stakein Banca Popolare di VicenzaSpA, a possibility given its role as a backstop facility providerto the lender's €1.75 billion capital increase, MF notes.

* The Portuguese Banking Association yesterday backedgovernment proposals to create a fund to take on banks' NPLs, Reuters reports.The institution noted that it called for such a fund in 2011.

* Greek banks are considering agreeing to a haircut for2,000 to 3,000 indebted companies, as long as there is an equal haircut ontheir debt to the public sector and pension funds, sources tellKerdos. The banks are said to havepresented the proposal to Finance Minister Euclid Tsakalotos and EconomyMinister Giorgos Stathakis, who are considering it with a positive approach.

* Meanwhile, Tsakalotos said yesterday that Greece and itscreditors will pause bailout review talks for a week to give officials time toattend an IMF meeting in the U.S., Bloomberg News reports.Talks will resume following the spring meeting, with the aim of reaching anagreement before or a few days after a meeting of eurozone finance ministersApril 22. A draft IMF memorandum showed that the fund wants "decisiveaction" by its European partners to grant Greece further official debtrelief, saying the country's debt dynamics are projected to remain highly unsustainable,Reuters reports.

* Greek banks face having to replace up to half of theirboard members as part of a review by the Hellenic Financial Stability Fund, Naftemporiki reports.The changes will come under a law that mandates that board members meet certainconditions, including having relevant banking experience.

* The capital increases required by the ECB of certainItalian banks are appropriate, Bank of Italy Director General Salvatore Rossi tells La Repubblica.

* Magistrates in Arezzo, Italy, seized €414,000 from the€1.2 million severance pay of former Banca Etruria General Manager Luca Bronchi, Il Sole 24 Ore writes.

* Mexican investors Ernesto Tijajero and Luis Masaveuincreased their stakes in Liberbank SA, whose shares are down 40% year-to-date, Expansión writes.Tijajero, the bank's third-largest shareholder, purchased an additional 1.86million shares, taking his stake to 7.42%, while Masaveu, a board member,acquired almost 275,000 shares. The bank is fighting to keep its share price above€1, having traded at €1.63 in January 2015, when it carried out a 1-for-3reverse split.

* Moody's yesterday upgraded Bankia SA's long-term deposit ratings to Ba2 from Ba3and its long-term senior debt ratings to Ba3 from B1. The outlooks remainstable.

* A Spanish court yesterday ordered the release ofIndustrial & Commercial Bankof China Ltd. executives Liu Gang and Liu Wei, who were arrested inFebruary as part of a money-laundering investigation into the Chinese lender,Reuters reports.The court decided that there was no flight risk, but the two executives will beunable to keep their passports and will have to appear in court regularly.

* The Portuguese government is refusing to pay 's lossesfrom derivatives described by Lisbon authorities as "toxic," Publico reports.Portugal in early March lost a court case in the U.K. over the swaps, andtransportation companies have until April 22 to pay €360 million to Santander.The Portuguese finance ministry, however, says judgments by U.K. courts are notenforceable in Portugal.

NORDIC COUNTRIES

Governmentto keep DNB stake: Norway's conservative-led government is taking a dim view ofDNB ASA's perceivedweak response to the Panama Papers, which have linked the bank's Luxembourgsubsidiary with helping clients establish offshore shell companies to avoiddomestic taxes, Dagens Næringsliv reports.Prime Minister Erna Solberg has reminded DNB of the state's "blocking minority"shareholding in the bank, although she has rejected one conservative MP's callto sell off the stake. Meanwhile, DNB hired an external law firm to examine itsboard's activities, Reuters notes.

* Nordea BankAB is refusing to comment on media reports, surfacing in Estonia,that it is looking to divest its pan-Baltic banking operations, Dagens Nyheter reports.Nordea's activities in the Baltics are increasingly profitable but relativelysmall, with its loan portfolio there at 2015-end amounting to 2.5% of totallending.

* Customers of Danish insurance company are facing higher premiumcosts across a wide range of policies, Børsenwrites.CEO Morten Hübbe said he expects Tryg's competitors to also increase premiums,especially for travel insurance products, for which claims handled by Tryg have"exploded" in recent years. FinansWatch saysthe average increase on travel policies will amount to 250 kroner.

EASTERN EUROPE

Otkritie unitto acquire Rocketbank: Otkritie Financial Corp. Bank unit agreed to acquire100% of mobile banking provider Rocketbank from its founders and venturecapital firm Runa Capital, with the transaction to be completed by the end ofApril. Vedomosti saysthe acquisition price exceeds $4.5 million.

* Former Otkritie Group executive Konstantin Bobrov is setto become management board chairman at PAO Bank Uralsib, Vedomostireports,citing market sources.

* PAO Sberbankof Russia is conducting an internal investigation regarding informationrevealed in the Panama Papers and will issue a comment within a week, Vedomosti reports,citing CEO Herman Gref. First findings of the investigation showed that transactionsinvolving investment company Troika Dialog were carried out before it waspurchased by Sberbank, Gref said.

* Meanwhile, Sberbank's supervisory board recommended thatthe lender's shareholders earmark 20% of its 2015 IFRS net profit, or 44.6billion Russian rubles, for dividend payments, Vedomosti says.RIA Novosti notesthat the per-share dividend will amount to 1.97 rubles. Last year, the bankearmarked 3.5% of its profit, or 10.1 billion rubles, for dividend payments.

* Bulgaria's First Investment Bank AD will ask its shareholders toapprove the issuance of up to 2 billion Bulgarian levs of debt securitieswithin the next five years, SEE News reports.A previous five-year program of the same amount expires this year.

* Iran's BankMellat joined the Turkish banking system as of Friday, an Iranianminister told reporters, accordingto the Fars news agency. Bank Mellat, which has branches in Ankara,Istanbul and Izmir provinces in Turkey, will be able to process transactions ofall banks in Turkey. Iran has already worked with , and from nowon T.C. Ziraat BankasiAS will also be included in this process.

IN OTHER PARTS OF THE WORLD

* Taiwanese Finance Minister Chang Sheng-ford said Taiwanwill no longer apply for membership in the China-led Asian InfrastructureInvestment Bank because it is not being treated with dignity and equality, theisland's Central News Agency reports.

* Australia-based bitcoin exchange Igot, which owes thousands ofdollars to Australian customers, is on the verge of insolvency, The Sydney Morning Herald reports,citing an ABC News program. The Australian Securities and InvestmentsCommission said it was unable to act in the absence of regulations governingthe industry, prompting renewed calls for regulation of the sector.

* HSBC HoldingsPlc appointed Hamish Kelly head of global banking forAustralia. Kelly will take on the new role in addition to his existing positionas head of the financial institutions group in Australia.

NOW FEATURED ON SNL

Data Dispatch:Largest 100 banks in the world: The five largest banks in the worldare all based in Asia, and China-headquartered banks made up the top four,according to S&P Global Market Intelligence's latest global bank rankings.

Italy's new €5B bankfund: debt, drama and doubt: Arduous negotiations in Italy'sfinance ministry appear to have roped in the country's strongest banks, bankfoundations and insurers to launch Atlante, the country's bank stabilizationfund.

Data Dispatch Europe:Market share boost for top Lloyd's players in 2015: Lloyd's ofLondon managing agents are using a range of tactics to fight for relevance in ahighly competitive marketplace where buyers of insurance and reinsurance seemto have a negotiating advantage.

Rich Lovie, Ed Meza,Stephanie Salti, Chantal Groothengel, Yael Schrage, Praxilla Trabattoni,Mariana Aldano, Thanasis Kakalis, Gerard O'Dwyer, Beata Fojcik and Ali Kayalarcontributed to this report.

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