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In This List

EU eyes sovereign limits; Lloyds backers keen on investments; Romanian mortgage law

StreetTalk – Episode 70: Banks' Liquidity Conundrum Could Fuel M&A Activity

Street Talk Episode 70 - Banks' Liquidity Conundrum Could Fuel M&A Activity

StreetTalk – Episode 69: Banks left with pockets full of cash and few places to go

Street Talk – Episode 69: Banks left with pockets full of cash and few places to go


EU eyes sovereign limits; Lloyds backers keen on investments; Romanian mortgage law

EU to discusssovereign debt limits: EU finance ministers will discuss limiting a bank'smaximum exposure to a single sovereign debt issuer and other options to reducebanks' exposure to sovereign debt, accordingto Reuters. The finance ministers will also look into theintroduction of nonzero risk weights for sovereign exposures and three otheroptions at a meeting next week.

* The IMF saidin its latest global financial stability reportthat global financial stability risks have increased over the past six monthsamid higher economic risks and uncertainty, falling commodity prices andconcerns about China's economy. The IMF noted that market pressures arehighlighting long-standing legacy issues in the eurozone, indicating that amore complete solution to European banks' problems cannot be further postponed.The fund called for urgent action to address elevated levels of nonperformingloans and a solution to address excess capacity in the eurozone.

* French Finance Minister Michel Sapin yesterday called onGermany to "absolutely, completely and fully respect" the ECB'sindependence after some German politicians criticized the central bank for theeffect of its low interest rate policy on savers, Reuters reports.

* ECB Governing Council Member Klaas Knot told Dutchlawmakers yesterday that the ECB's asset-purchase program and negative interestrates will benefit governments and mortgage borrowers but will hurt savings andpensions, Bloomberg News reports.Knot, who also heads the Dutch central bank, proposed to keep the broadmonetary policy in place and let inflation rise, though he acknowledged:"I can't tell when that will be."

UK AND IRELAND

Lloydsinvestors eye strategic modifications: Some shareholders in wantthe group to modify its strategy to protect its dividend plans in case of aBritish economic downturn, Reuters reports.Investors believe Lloyds can now make new investments in its wealth managementand insurance arms as the payment protection insurance mis-selling scandaldraws to a close.

* KPMG's latest annual bank report showed that profits atthe U.K.'s largest banks dropped 40% last year, with the combined pretax profitof HSBC Holdings Plc,Barclays Plc,Royal Bank of Scotland GroupPlc, Lloyds and Standard Chartered Plc falling to £12.4 billion, the Financial Times writes.Provisions for redress payments in connection with past mis-selling rose 35%year over year to £14.3 billion in 2015.

* Barclays has cut about 8,000 jobs in four months in thewake of a hiring freeze imposed by CEO Jes Staley, insiders tellthe Financial Times. Staley said inMarch that his first 100 days as CEO saw more than 6,000 job cuts.

* BeazleyPlc saidyesterday that U.K.-based New Beazley is now the holding company of the group.

* The U.K. Financial Conduct Authority saidyesterday that acting CEO Tracey McDermott will leave the regulator July 1.Incoming CEO Andrew Bailey will take up his role the same day.

* The Bank of England will becomethe administrator of the Sterling Overnight Index Average, or SONIA, interestrate benchmark as of April 25. The Wholesale Markets Brokers' Association willcontinue to calculate and publish the SONIA rate, but on behalf of the BoE.

* A PricewaterhouseCoopers report commissioned by lobbygroup TheCityUK found that a British exit from the EU could lead to a loss ofup to 100,000 financial services jobs by 2020 and cut the sector's contributionto the U.K. economy by £12 billion, CityA.M. writes.The sector would have up to 30,000 fewer jobs by 2030 than if the U.K. voted toremain in the EU, according to the report.

GERMANY, SWITZERLAND ANDAUSTRIA

Thiam getsshareholder vote of confidence: Harris Associates, which holds a 4.2% stakein Credit Suisse GroupAG, has expressed support for CEO Tidjane Thiam and his efforts toimprove the bank's performance. David Herro, Harris Associates' chiefinvestment officer for international equities, toldFinanz und Wirtschaft that Thiam was"completely and adequately focused on doing what is the right thing."Herro added that the bank should have taken action much earlier, saying Thiamnow had to "downsize the investment bank even faster."

* Deutsche BankAG agreed to make a monetary payment to settle a U.S. litigationregarding allegations of collusion with HSBC Holdings Plc and Bank of Nova Scotia to fix silver prices, Reuters reports.

* German insurer Talanx AG is planningto eliminate 330 jobs, or one in three workers, at its HDI Vertriebs AG salesunit by 2020 as part of a restructuring of its German business. The cuts comeon top of 600 announced last year, primarily in its HDI Kundenservice AG unit.

* FrankfurterVolksbank eG approved a merger with , paving theway for the creation of Germany's second-biggest volksbank with total assets of€9 billion and the biggest in terms of customers with 200,000 members, the Börsen Zeitung reports.Volksbank Höchst approved the merger in March after the banks agreed to themove last year.

* Julius BärGruppe AG remains on the lookout for potential acquisitions, CEOBoris Collardi said Wednesday at the annual general meeting in Zurich, Finanz und Wirtschaft reports.

FRANCE AND BENELUX

BNPmeets with union over CIB plans: BNP Paribas SA is holding this morning an extraordinarycentral works council about its corporate and investment banking unit, L'Agefi writes, citing aunion source. The meeting follows the announcement of a €1 billion savings planin the investment banking division by 2019. Reuters also reports.

* The six members of Belfius Banque SA's executive committee will share, forthe first time in four years, a bonus pool of €732,581, L'Echoand DeTijd report. The Belgian state should also receive a total of €150million from Belfius this year, as a €75 million interim dividend will be paidin addition to the €75 million already announced in respect of 2015.

* After months of delays NewB, a Belgian cooperative hoping tobecome a bank, will launch its first product, a prepaid payment card made fromorganic material, named Goodpay, accordingto De Tijd.

SOUTHERN EUROPE

Sabadellfinally seals Dexia JV sale: An arbitration decision ended a disputebetween Banco de Sabadell SAand Dexia SA over thesale in 2012 by Sabadell to DexiaCrédit Local SA of a 20.9% stake in Dexia Sabadell SA, Europa Press notes.The arbitrator settled the dispute regarding the €52.4 million sale price ofthe stake, after which Sabadell said in a regulatory filing that thetransaction had generated gross capital gains of that amount.

* Banco BilbaoVizcaya Argentaria SA hired BNP Paribas Real Estate to market andsell a portfolio of industrial real estate assets called "Detroit,"comprising 441 assets including cargo ships and industrial land spread over 28Spanish provinces, Europa Press reports.BBVA hopes to conclude the sale by July.

* BankiaSA chief José Ignacio Goirigolzarri said the repayment of those whotook part in the bank's 2011 IPO is almost complete, with €527 million havingbeen repaid to over 100,000 investors and one month left for investors tosubmit claims, Cinco Días reports.

* A Spanish judge yesterday denied bail for formerBanco Español de CréditoSA Chairman Mario Conde, who was arrested Monday on suspicion ofmoney laundering and other charges, accordingto Reuters. The judge ruled that Conde would be remanded in prisonwithout bail until his trial starts, and also ordered the detention of Conde'slawyer, Francisco Javier de la Vega.

* The IMF said Italy's Atlante fund to solve the problem ofnonperforming loans and secure banks' capital increases is a step in the rightdirection, MF writes.The fund could help Banca Montedei Paschi di Siena SpA meet ECB requirements to sell NPLs, Corriere della Sera writes, adding that this promptedthe shares of the lender to soar.

* The ECB in a letter to both associations of shareholdersof Veneto Banca SCpArequested information including the presence of agreements on voting intentionsamong the associations, industrial strategies for the bank, budgetary policiesand opinions on the bank's capital increase and IPO, MF writes.

* Private equity firms could play a leading role in thebailout of the four small Italian regional banks rescued late last year, MF writes,citing Roberto Nicastro, chairman for the four lenders. According to Il Messaggero, Atlante could also play a role.

* UniCreditSpA agreedto sell a portfolio of unsecured consumer credit NPLs, with a gross book valueof €420 million, to AnaCap Financial Partners, MF notes.

* IntesaSanpaolo SpA private banking unit Banca Fideuram expectsperformance this year to be similar to that in 2015 and does not rule outopening an office in New York and maybe Asia in the next two years, CEO PaoloMolesani tells Il Sole 24 Ore.

* The Portuguese government refused an offer of €700 millionfor the sale of Banif-BancoInternacional do Funchal SA in May 2015, O Publico writes.The newspaper says the proposal was made by a Hong Kong fund but was nevermentioned during the sales parliamentary commission inquiry in December 2015,when the bank was sold to BancoSantander Totta SA. In the offer, Ample Harvest Investment Capitaloffered to maintain jobs at the bank, as well as at , Rádio Renascença says.

* Novo BancoSA has presented new targets in a plan to reduce nonstrategicassets, Jornal de Negócios reports.From real estate alone, the institution expects to raise €700 million.

* Elisa Ferreira, member of the European Parliament, is setbe appointed head of banking supervision for the Banco de Portugal, sources tellJornal de Negócios.

NORDIC COUNTRIES

2 Swedish firmsto lose CEOs: Öyvind Thomassen will step down as CEO of Sweden's , Dagens Industri reports.Thomassen, who joined the Stockholm-based Skandia Group in 1988, will pursuenew career opportunities within the financial or investment sectors. "Itook a close look at my future after Skandia decided to divest in Norway," Thomassensaid. "While this was a decision I fully stand behind, it did cause me toreflect on matters."

* Meanwhile, Länsförsäkringar AB (publ)'s CEO, Sten Dunér, hasnotified the board of his intention to retire as head of the Swedish bankingand insurance group this year, Affärsvärldenreports.Dunér joined Länsförsäkringar in 1982, and served as CFO before he was promotedto CEO in 2010.

* Sweden's central bank saidNordea Bank AB willneed to set aside a larger amount of capital to accommodate its plan toreorganize its subsidiary-based structure into a new branch-based one, Svenska Dagbladet writes.The Riksbank noted that the move will increase the group balance sheet to about4.800 trillion Swedish kronor from 1.800 trillion kronor, increasing risks forthe central bank and Swedish public finances.

* HSBC analysts warned that the Swedish government'sproposal to cut remove tax deductions on banks' issues of Additional Tier 1bonds and other subordinated debt may later be followed by other Europeancountries and have a material effect on investors, Bloomberg News reports.

* Norway's trade and industry ministry presented a 17-pointquestionnaire to DNBASA's board regarding what knowledge the board and group managementmay have had pertaining to the specific type and strategic purpose of taxservices provided to wealthy offshore clients by its DNB Luxembourg subsidiary,E24 reports.

* Denmark's Vestjysk Bank A/S has sold its bank branch operation inKolding to Fynske Bank, Børsen notes.The high street branch divested comprised some 1,300 customers and three staff.

EASTERN EUROPE

Romanianparliament approves mortgage law: The Romanian parliament approved a lawthat allows property owners to give up their mortgage debts, Reuters reports.The legislation is retroactive and caps the value of mortgages under questionat €250,000. The law has been criticized by the Romanian and the Europeancentral banks, as well as the IMF and the European Commission for posingserious risks to the economy.

* The Turkish market may attract investor interest formortgage-backed covered bonds if Türkiye Vakiflar Bankasi TAO succeeds in its plannedissuance, Finans Gündem writes,citing SocGen analysts Jean-David Cirotteau and Cristina Costa. Vakifbank wasslated to begin investor meetings April 12 to evaluate the inaugural issuance.

* The shareholders of JSC Bank Severny Morskoy Put, which specializes incorporate lending, plan to transform it into a universal lender under astrategy spanning until 2020, Vedomostiwrites.The lender and unit PJSCMoscovskiy Oblastnoi Bank also plan to increase their loanportfolio to between 300 billion Russian rubles and 400 billion rubles by 2020from around 180 billion rubles as of March 1.

* NationalBank Trust PJSC, controlled by Otkritie Holding following thelaunch of a recovery plan for the lender, launched legal proceedings in theLondon High Court against its previous owners, demanding $830 million incompensation for losses incurred as the result of loans issued to affiliatedand offshore companies, Kommersant reports. Assets of the former ownerswere frozen at the request of the London court.

* Moody's expects that roughly 10% Russian banks could losetheir licenses in 2016, Kommersant reports. Bad management andfraudulent activities are among the main reasons behind the bankruptcy ofRussian lenders, the rating agency added. As of March 23, there were 711 banksin Russia; more than 190 lenders have lost their licenses since 2014.

* The Polish president's office set up a new team of expertsto work on another proposal for the conversion of foreign currency-denominatedmortgages into zlotys, Rzeczpospolitawrites.A new proposal could be announced at the end of May or the beginning of June.Reuters also has a report.

* Idea BankSA agreed to purchase a 49.99% stake in Getin Leasing from LC Corp.BV, PAP reports.The price for the stake will amount to 184.6 million Polish zlotys plus 49.99%of Getin Leasing's consolidated net profit for 2016. The transaction will helpbusinessman Leszek Czarnecki, who control all three companies, to set up thelargest leasing firm on the Polish market, PulsBiznesu says.

* A Reuters survey showedthat the "worst is over" for Hungarian banks and most of them expectto post a profit for this year. Reuters also cited OTP Bank Nyrt. as saying it expects a decline in loanvolumes to end this year and eyes a single-digit expansion of the loanportfolio in the years to come.

* Hungary selected Bank of China to arrange a benchmark-sizesovereign bond denominated in Chinese yuan, the first issuance of this typefrom central Europe, Reuters reports.

IN OTHER PARTS OF THE WORLD

* China's four big banks — Bank of China Ltd., Agricultural Bank of China Ltd., and ChinaConstruction Bank Corp. — will join and among 18 members of a yuan-denominated gold benchmark price inthe yuan gold fix, Reuters reports.

* Brazilian President Dilma Rousseff is looking to decrease banks'reserve requirements to boost credit and revive a recession-struck economy,Reuters reports,citing an unnamed presidential aide. Measures to keep the economy afloat willbe put up in case Congress proceeds with an impeachment vote against thepresident, the source said.

* The U.S. Federal Reserve and the FDIC jointly the of , , ,State Street Corp. andBank of New York MellonCorp. to be not credible, starting a process that could allow regulatorsto force the banks to sell certain assets or entire operations. Neither agencyobjected to CitigroupInc.'s plan, although shortcomings were still identified.

NOW FEATURED ON SNL

FCA seeksgreater fairness and transparency in UK IPO market: The FCA hasissued an interim report on investment and corporate banking which suggests howIPOs might become fairer and more transparent for investors.

AXA's UK exit planshows up weakness of British insurance market: The French insurer'sattempt to exit part of its struggling U.K. business should be welcomed byinvestors, experts say.

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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