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VTB, Alpha Bank profits down; US law firms probe Metro Bank; HSBC plans layoffs


Banking Essentials Newsletter: 7th February Edition

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VTB, Alpha Bank profits down; US law firms probe Metro Bank; HSBC plans layoffs

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

First-quarter earnings

* 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.

* Landesbank Hessen-Thüringen Girozentrale, known as Helaba, reported first-quarter consolidated IFRS net profit of €42 million, down from €52 million in the same period in 2018.

* VTB Bank PJSC's first-quarter net profit attributable to shareholders of the parent fell to 46.6 billion Russian rubles from 55.6 billion rubles in the same period in 2018. EPS was 0.36 kopeck, compared with the year-ago 0.43 kopeck.

* Greece-based Alpha Bank AE reported a first-quarter after-tax profit attributable to shareholders of €27.5 million, down from a restated €65.4 million a year earlier. The bank's loan impairment losses narrowed on a yearly basis to €178.3 million from €335.8 million.

M&A corner

* ABANCA Corporación Bancaria SA moved towards making a bid for Liberbank SA after "practically" securing funding for the deal.

* Nasdaq AB, an indirect subsidiary of Nasdaq Inc., withdrew its offer to acquire all issued shares of Norway's Oslo Børs VPS Holding ASA, effectively clearing the way for a rival bid by Euronext NV.

* Poland-based Getin Noble Bank SA believes that chances of its merger with sister unit Idea Bank SA have decreased significantly, news agency PAP reported. It also withdrew from a deal to sell a 25% stake in fully owned brokerage unit Noble Securities SA to controlling shareholder Leszek Czarnecki.

* The Polish Financial Supervision Authority cleared the acquisition of Société Générale SA unit Euro Bank SA by Millennium BCP unit Bank Millennium SA. Bank Millennium agreed to acquire a 99.79% stake in Euro Bank for a reference price of 1.83 billion Polish zlotys.


* HSBC Holdings PLC is planning to cut at least 500 jobs within its global banking and markets division as part of the British lender's objective to achieve positive jaws, a measure of how income growth compares to growth in expenses, people familiar with the plan told Bloomberg News.

* Intesa Sanpaolo SpA secured consent from five banking unions for 1,600 voluntary job layoffs, Reuters reported.

* Japanese financial services giant Mitsubishi UFJ Financial Group Inc. is cutting its workforce in London through voluntary redundancy, a spokeswoman told S&P Global Market Intelligence, after earlier reports said roughly 500 senior staff could be affected.

Executive moves

* The U.K.-based banknote printing firm De La Rue PLC's CEO Martin Sutherland is stepping down as the firm posted a year-over-year drop in its results for the 2019 fiscal year.

* Banco BPM SpA appointed Edoardo Ginevra its new CFO as part of an overhaul of its organizational structure.

* France-based Groupe BPCE said that its supervisory board elected Pierre Valentin and Thierry Cahn chairman and vice chairman, respectively.

* Joerg Bongartz was appointed chairman of the supervisory board at Deutsche Bank Polska SA, the lender said.

* Barclays PLC named Taylor Wright as managing director and co-head of U.S. equity capital markets.

Industry news

* The European Commission has sent a letter to the Italian government seeking explanations over its excessive debt levels, giving Rome until May 31 to respond. The European Commission was said to be weighing disciplinary measures against Italy over its debt and deficit measures in June that could cost up to €3.5 billion.

* The Czech central bank increased the countercyclical capital buffer rate for local lenders by 25 basis points to 2% from July 1, 2020, citing growing risks associated with the upward phase of the financial cycle of the Czech economy and a slight increase in vulnerability of the local banking sector. While, Germany's financial stability board has suggested introducing a 0.25% countercyclical capital buffer for banks, Reuters reported, citing BaFin President Felix Hufeld.

* Sweden's largest banks require more capital against their lending to the commercial real estate sector where they could suffer "significant credit losses" in the case of a severe economic downturn, the country's financial regulator Finansinspektionen said.

* Amundi SA seeks to double its AUM in Germany to €80 billion over the next three years, Fannie Wurtz, head of global ETF trading at the French asset management company, was cited as saying May 29.

* Deutsche Bank AG is considering reducing its 13% common equity Tier 1 capital ratio target as a way to free up capital for its ongoing restructuring, rather than raising funds from the market, Handelsblatt reported, citing two sources with knowledge of the matter.

Regulations and law

* U.S.-based law firms are investigating the British lender Metro Bank PLC, which has had a torrid time since admitting in January that it had miscalculated its risk-weighted assets.

* The German financial supervisor Bafin is considering imposing a fine of up to €195 million on Commerzbank AG over suspected late disclosure of a strategy change in 2016, Handelsblatt reported May 30, citing insiders.

* In its semiannual Financial Stability Review, the European Central Bank said challenges to financial stability are on the rise amid downside risks to the economic outlook.

* Spain's bank rescue agency, FROB, has received more than 1,000 claims against it over the winding down and subsequent firesale of Banco Popular Español SA to Banco Santander SA for €1, it said in its annual report.

* Poland's Supreme Administrative Court dismissed the appeal of Abris Capital Partners against a 2016 court ruling confirming the legality of the Polish Financial Supervision Authority's decision to ban Abris from exercising voting rights in Nest Bank SA.

Featured during the week on S&P Global Market Intelligence

Scope: EU banks easier targets for money launderers than US peers: Anti-money-laundering supervision in the EU remains "underwhelming" despite recent efforts to tighten it, Scope Insights said. European banks are perceived by criminals as easier to penetrate than their U.S. peers.

UK's FCA criticizes EU regulator's post-Brexit share trade rules: ESMA has softened its stance on share trading obligations but the Financial Conduct Authority said the new plans will still cause disruption and called on the EU to recognize the reality of open markets.

Ombudsman upholds 9 out of 10 complaints against UK bank TSB in H2'18: A far higher proportion of complaints made against TSB Bank PLC in the second half of 2018 were resolved in favor of customers than those made against other large U.K. banks, new figures show.