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The Panama leak; LSE chief slams ICE; SocGen set to ax i-bank staff


Banking Essentials Newsletter: January 11th Edition


Banking Essentials Newsletter December 21st Edition


The Road to Basel IV: Navigating the challenge facing European banks


Basel Framework- Utilizing data to analyze the capital position of European banks.

The Panama leak; LSE chief slams ICE; SocGen set to ax i-bank staff

ThePanama leak: The International Consortium of Investigative Journalistsyesterday publishedan exposé based on leaked documents from a Panama-based law firm that revealedhow a global industry of law firms and big banks allegedly sold financialsecrecy to politicians, fraudsters and drug traffickers, as well asbillionaires, celebrities and sports stars. The exposé followed a yearlonginvestigation by the ICIJ, German newspaper SüddeutscheZeitung and more than 100 other news organizations into a cache of 11.5million records covering the day-to-day business of law firm Mossack Fonsecaover the past 40 years. Among others, the files showed how associates ofRussian President Vladimir Putin supposedly secretly shuffled as much as $2billion through banks and shadow companies. UBS Group AG and HSBC Holdings Plc are said to be among the more than 500banks that worked with Mossack Fonseca to help clients manage offshore assets.

* KBC GroupNV and DZ BankAG are starting to re-engage with Iran following the lifting ofsanctions on the country in January, the FinancialTimes reports.Erste Group Bank AGis also preparing to again handle transactions involving Iran.

* Data from Thomson Reuters and Freeman Consulting showed thatinvestment banks saw an 18% year-over-year decline in fees from emergingmarkets in the first quarter to just under $3 billion, IFR reports.Bankers expect activity in emerging markets to remain subdued for a longerperiod, unlike in 2012 when activity picked up after a poor start to the year.

* Following a global selloff in bank capital securities in January,a number of European banks have started exploring opportunities to issuesubordinated debt in the Chinese market, IFRwrites.Panda bonds are seen as an instrument for banks to broaden their investor baseand gain access to another market for regulatory capital.


LSEchief slams ICE: In an interviewwith The Daily Telegraph, CEO Xavier Rolet indicated that the planned £21 billion merger with will unlikelylead to the Germans taking over as there are more British shareholders in theGerman firm. Rolet also dismissedpotential U.S. counter-bidder Intercontinental Exchange Inc. as a "slash andburn" organization that could throw parts of the LSE "in the bin."

* BarclaysPlc CEO Jes Staley said the bank still has "criticalmass" to compete in the Middle East despite slashing its workforce in theregion, Bloomberg News reports.Staley noted that the U.A.E. business is "very profitable."

* London's Southwark Crown Court is to launch this week thecriminal trial of five former Barclays traders accused of conspiring tomanipulate LIBOR, The Daily Telegraphnotes.The trial is expected to last three months.

* U.K. banks face at least a further £22 billion in compensationfor payment protection insurance mis-selling, the Financial Times reports.Data from the U.K. Financial Conduct Authority showed that nearly half of the£23 billion paid out so far by the lenders represents interest only.

* The Bank of England is expected to keep interest rates athistoric low levels for another three years, The Sunday Times of London writes.Some investors are even betting that the central bank's next moves wouldinclude a rate cut. The predictions come as a global growth slowdown and thereferendum on Britain's EU membership cast a shadow over the country's economy.

* Starting this week, the 16 main banks that make the market inU.K. government bonds will bid for 5% of the gilts sold in auctions on arolling six-month average, up from the current 2%, the Financial Times reports.The increase followed the near-collapse of an auction earlier this year as manylenders are reducing their exposure to sovereign debt to meet regulatoryrequirements.

* Gabriel Fagan, chief economist at the Central Bank of Ireland,said a review of mortgage lending rules in the country will not lead to theabolition of the regulations, The IrishTimes reports.The central bank is due to publish the review's results in November.


Germanbanks object to 'disproportionately high' bank levy: More than 100 German bankslodged an objection against notifications sent by the government to collect thebank levy payable for 2015, arguing that the amount has more than tripled foreach bank over the previous year and was "disproportionately high,"especially for low-risk banks, Börsen-Zeitung writes.

*Deutsche Bank AG lostits position as the world's third biggest investment bank according to totalrevenue from fees and trading, the Financial Times writes,citing data from industry research group Coalition Development. The weak euroand the bank's restructuring saw the German bank slide to the fifth spot.

*Deutsche Bank, together with JPMorgan Chase & Co., has been asked by U.S.investigators probing Malaysia's 1MDB scandal for documents related to theirinteractions with the state-owned investment fund, The Wall Street Journal reports.The bank in 2009 was allegedly involved in transferring $1 billion from 1MDBaccounts out of Malaysia on behalf of a joint venture with a Saudi Arabiancompany.

*Wiener Privatbank SEsold Valartis Asset Management (Austria) Kapitalanlagegesellschaft toSemper Constantia PrivatbankAG for€3.14 million, Reuters reports.

*Some creditors of Heta AssetResolution AG are willing to accept a discounted bond buyback offerif Austria's finance minister reduces the tenure of the sovereign bond hesuggested coupling with the repayment to seven or nine years from the initial18 years, Kurier citesUrs Fähndrich, spokesman of creditor group Teutonia, as saying. The grouprepresents investors holding about €200 million in Heta debt.

* AU.S. pension fund sued the German tax authority in a case related to cum-exdeals, Handelsblatt writes,citing Spiegel Online.


SocGenset to ax i-bank staff: Société Générale SA is considering cutting 128 jobs inits investment banking division, L'Agefi reports, citing aweekly newsletter from union CGT.

* AXA completed the sale of its Portuguese operations toAgeas SA/NV for €189million, L'Echo writes.The two groups entered into exclusive negotiations last August.

* France's financial regulator mapped out proposals allowingcertain investment funds to directly lend to nonfinancial companies, the Financial Times reports.The development, which comes amid banks' retreat from lending to companies, isexpected to give birth to a Europe-wide direct lending market.

* Delta LloydNV's largest shareholder is asking for explanation from the companyabout a deal with Taiwan investor Fubon Financial that was reached shortlybefore the Dutch insurer's narrowly won shareholder approval for a €650 millionrights issue, Reuters reports.Highfields Capital wants to know whether the deal put other shareholders at adisadvantage. HetFinancieele Dagblad and DeTelegraaf also report.


Santanderto trim branch network: On Friday said it plans tostart negotiations with trade unions as it seeks to close between 400 and 450retail branches, a reduction of some 11% to 13% of its network in the country.The plan behind the closures is that the remaining 3,000 or so branches willabsorb a greater number of employees, which will enable the bank to offer moreextensive advisory services, Europa Press reports. Expansión writesthat Santander will provide April 6 the first figures on the workforcereduction plan associated with the branch closures.

* BankinterSA closed the purchase of Barclays' Portuguese retail business for€86 million. Bankinter Seguros de Vida, an insurance company held 50/50 byBankinter and MAPFRESA, acquired the U.K. bank's life insurance and pensions activitiesin the country for €75 million, Expansiónreports.

* Apollo Global Management indicated that its bid to acquire 's nonperformingloans and become its majority shareholder is not hostile and couldpotentially pave the way for Carige to merge with the four small-sized Italianbanks that were bailed out by the government last year, La Repubblica writes.

* said it could launch a planned €1 billion capital hike in the first half of theyear, Reuters writes.

* CEOVictor Massiah told a shareholders' meeting that the lender has no merger planson the table, Reuters reports.

* A team of advisers at theBank of Portugal next week will start contacting strategic Wall Streetinvestors regarding the sale of Novo Banco SA, Expressowrites.

*IMF Managing Director Christine Lagarde described as "nonsense"claims that the fund wants to push Greece towards default, the Financial Times reports.A leaked phone call of IMF officials exposed strains between Greece and itscreditors, The Wall Street Journal notes.


Swedbankchooses new CEO: SwedbankAB's board decided to appoint Birgitte Bonnesen CEO, Svenska Dagbladet says. Bonnesenhas been acting CEO since February, after Michael Wolf left the bank. Bonnesenjoined the bank in 1987.

* Several Nordic banks are named in the Panama Papers leak,including Nordea BankAB, Jyske BankA/S and DNBASA, publicbroadcaster SVT,Aftenpostenand DR report.

* Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson could facecalls for a snap election in parliament after the Panama Papers revealed thathe is among several politicians that have secret links to companies in offshoretax havens, The Guardian notes.Gunnlaugsson is said to have owned a 50% stake in Wintris Inc. that was latertransferred to his wife, Anna Sigurlaug Pálsdóttir. Gunnlaugsson walkedout of an interview with Swedish television company SVT when asked aboutthe issue, saying he was not prepared to answer such a question.


Sberbankmulls buying VEB loans: PAO Sberbank of Russia could purchase a 30billion ruble performing loan portfolio from Vnesheconombank that the Russian development bank plansto sell to boost its liquidity, Vedomostireports.

* Russian state corporation Rostecintends to spend 45 billion rubles to double the capital of , Vedomosti reports. The lender has already received 8 billion rublesas the first installment of the planned recapitalization.

* Alior BankSA CEO Wojciech Sobieraj said the bank remains interested inM&A and could be ready for further transactions as of the third quarter,PAP reports.Meanwhile, Puls Biznesu saysthe lender has already held initial talks on the takeover of .

* Michal Krupinski, president of PZU SA, which controls Alior, said the recapitalizationof the lender, planned as part of the Bank BPH SA takeover, will not affect PZU's dividendpolicy, Rzeczpospolita says.

*Alior Bank CEO Wojciech Sobieraj said the bank expects to post a profit in 2017despite the cost of integration with Bank BPH, PAP reports.Sobieraj also saidthat the lender will decide within days on the size of a rights issue tofinance the takeover of Bank BPH's core operations and improve capital ratios.

* Polish banks have been increasingtheir investments in government bonds, which are exempt from the recentlyintroduced asset tax, Puls Biznesu writes. Local lenders have bought 35 billion zlotys ofgovernment bonds since the beginning of 2016, while foreign players havereduced their investments in Polish government debt by 20 billion zlotys.


* BATS GlobalMarkets Inc. is set to start its IPO as early as this week,Bloomberg News reports.

* California Attorney General Kamala Harris filed alawsuit againstMorgan Stanley formisrepresentations of complex investments such as RMBS. The misrepresentationscontributed to the global financial crisis and to major losses by investorsincluding California's public pension funds, according to a news release fromthe attorney general's office.

* GeneralElectric Co. completed the sale of its commercial lending and leasing business inJapan, including capital finance, fleet services and vendor finance, toSumitomo Mitsui Finance &Leasing Co. Ltd.


Data DispatchEurope: German life insurers hope for respite as investment yields scrapefloor: German insurance companies are struggling to live up to thegenerous promises made to their life policyholders

BancoSantander said to close 425 branches as it overhauls Spanishnetwork: Banco Santander will close 425 branches this year, a unionsaid. The bank has 4x as many branches in Spain as in the U.K., where it makesmore money.

Greek bankstested by political limbo: Greek banks await fresh agreement on thecountry's bailout as Europe seeks a solution to migrant crisis hitting thecountry.

Zeitgeist:AXA's next CEO seeks to reassure: AXA's incoming CEO looks set todo more of what investors want, and less of what his predecessor did.

Xana Kakoty, ArnoMaierbrugger, Stephanie Salti, Praxilla Trabattoni, Heather O'Brian, BeataFojcik, Kees Pijnappels, Esben Svendsen, Thanasis Kakalis, Helen Popper and AliKayalar contributed to this report.

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