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Capital rules compromise; Santander ups ROE target; Italy bad loans decrease


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Capital rules compromise; Santander ups ROE target; Italy bad loans decrease

* Global banking regulators have agreed a compromise on a key sticking point in negotiations around Basel III capital rules, insiders told Reuters. European regulators have been pushing for an output floor for calculating banks' asset risks to be set at 70% while the U.S. has wanted 75%, but both sides have now agreed to split the difference and settle on a 72.5% floor. Bloomberg News also covered.

* EU lawmakers have tentatively backed a proposal aimed at giving the bloc's regulators greater supervisory powers over foreign clearing houses, a move that threatens to put an end to London's global dominance in euro clearing after the U.K. leaves the EU, Reuters reported.

* The European Commission is expected to announce today plans to propose a package of measures aimed at reducing European banks' bad loans, following similar legislative proposals by the ECB announced last week, Reuters reported. Outgoing German Finance Minister Wolfgang Schäuble has backed the ECB's plan.


* Old Mutual Plc is close to clinching a deal to acquire a stake in British financial technology start-up TransferWise, insiders told Sky News. The investment will come alongside that of Silicon Valley firm IVP, and is expected to be announced by October-end.

* The Ardonagh Group — which includes U.K. insurers Towergate, Autonet, Chase Templeton, Ryan Direct Group and Price Forbes — said it intends to acquire British motorcycle insurance broker Carole Nash Insurance Consultants Ltd. for an undisclosed amount.


* Hamburger Feuerkasse Versicherungs-AG, the world’s oldest insurance company and a unit of Provinzial NordWest Konzern, plans to expand in the regional market in Hamburg and offer new digital services, as well as car and cyber insurance, Börsen-Zeitung wrote.

* Cembra Money Bank AG has taken over Winterthur-based EFL Autoleasing AG.


* The newly formed Dutch cabinet is cracking down on the trust sector by strengthening the supervisory powers of the central bank and the tax office, Het Financieele Dagblad reported. The new government said it will introduce a levy on interest and royalties on money flows from the Netherlands to overseas tax havens.

* UBS Group AG's French unit said it will launch an appeal to a ruling that blocks it from contesting a plea deal by former executive Patrick de Fayet, who is involved in a long-running French tax evasion probe, Bloomberg News reported. UBS France has sought to be treated as the plaintiff in deliberations over de Fayet's plea, which would have allowed it to obstruct the process. Reuters also covered.

* From Jan. 1, 2018, French customers will be allowed to change their housing credit insurance providers every year, Les Echos wrote. This will give individual contract providers the chance to take some market shares from banks.


* Banco Santander SA raised its return on tangible equity target for next year to more than 11.5% from 11% previously, citing an improving economic outlook in a number of the group's core markets. The bank also reiterated its 2018 target for double-digit earnings per share growth and said it was on track to have a fully loaded common equity Tier 1 ratio of 11% for 2018.

* Banks in Spain stocked up on ECB money at yesterday's auction amid political turmoil surrounding Catalonia. Insiders told Reuters that Spanish banks took up €21.3 billion at the auction, which was far more than analysts expected and what the lenders borrowed at the previous Main Refinancing Operation.

* Portugal's Social Democratic Party has accused the government of lacking transparency during the sale process of Novo Banco SA, Economia Online wrote. The party demands information about the exact amount the resolution fund will disburse in case the bank needs a capital injection.

* Liberbank SA agreed to sell a portfolio of foreclosed properties valued at €750 million to Bain Capital, El Confidencial writes. The transaction will reportedly be carried out at a discount of between 52% and 55% on book value.


* Intesa Sanpaolo SpA and Generali agreed to take up Banca Carige SpA's debt swap offer, which is part of the troubled lender's efforts to boost its capital, insiders told Reuters. Intesa CEO Carlo Messina confirmed the move, saying that the bank views the conversion as its best option. Between them, Intesa and Generali hold a little more than €100 million of junior debt issued by Carige.

* Bad debt on the books of Italian banks fell to €172.85 billion in August from €173.58 billion in July to hit its lowest level since July 2014, monthly Bank of Italy data cited by Reuters showed.

* Mediobanca - Banca di Credito Finanziario SpA and the Norwegian group Lindorff have presented nonbinding offers for a €600 million nonperforming loan portfolio being sold by Intesa Sanpaolo SpA, said MF.

* Intesa Sanpaolo has set aside a fund of €100 million to help compensate less financially well-off clients of Banca Popolare di Vicenza SpA and Veneto Banca SpA who saw the value of their investments in shares of the two banks wiped out, wrote Reuters.

* The Vatican bank began legal proceedings in Malta against "various third parties" for the loss of millions of euros invested in Malta-based investment funds, wrote Reuters.


* Nordea Bank AB (publ)'s relocation of its headquarters to Finland could have implications for the country's credit rating, according to a report by S&P Global Ratings.


* Russia's Otkritie Financial Corp. Bank posted a balance sheet hole of about $6 billion on Oct. 10, the FT reported. The bank was rescued by Russia's central bank in August.

* Russian authorities are making moves to close external websites that allow Russian citizens to purchase cryptocurrencies, news agency TASS reported. They perceive cryptocurrencies as carrying high risks for Russian citizens and businesses. Reuters also has a report.


Middle East & Africa: Shakeup in Kenyan election re-run; Ethiopian central bank hikes rate

Latin America: Moody's revises Brazil's banking outlook; J&F leniency 'breach' probed


Catalonia turmoil to complicate Liberbank rights issue, Bankia sale: Ongoing political turmoil in Catalonia will complicate Liberbank SA's rights issue and the Spanish government's plans to sell a stake in state-owned Bankia SA, as investors view Spain with a wary eye.

EC still faces fight for German backing despite revising deposit guarantee plan: Reports that the European Commission is preparing to water down proposals for a European Deposit Insurance Scheme may win favor from Germany and other countries long opposed to the plan, but they may prove insufficient to secure a final agreement.

Deutsche Börse 'fighting uphill battle' with new clearing platform: Despite its new business model and the benefits it might reap from Brexit, there is no easy way for Deutsche Börse to gain euro-clearing market share from London Stock Exchange, analysts said.

Ben Meggeson, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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