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MPS poised for state bailout; EU banks exceeding liquidity rules

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MPS poised for state bailout; EU banks exceeding liquidity rules

* Banca Monte dei Paschi di Siena SpA is poised for a state rescue. The bank said it raised about €2 billion from its debt swap offer and that no anchor investor has materialized for its share sale. Italy's government received approval from the lower house of parliament to borrow as much as €20 billion as it prepares for a potential rescue of troubled banks, including Monte dei Paschi, Reuters reports. The Atlante rescue fund, meanwhile, said it was willing to carry out a securitization plan for Monte dei Paschi should there be a state intervention even if the bank has said that the fund's participation was conditional on the state contributing roughly €1 billion, Il Sole 24 Ore writes.

* The European Banking Authority said it found no strong evidence suggesting that it should recommend an extension of the phasing-in period of the liquidity coverage ratio, noting that it saw a considerable improvement in the average ratio across banks in the EU. The EBA found that the EU banks' average liquidity ratio stood at 134% at the end of 2015, well above the 100% minimum requirement.

* Separately, the EBA said it will carry out its next EU-wide stress test in 2018, in line with its previous decision to aim for a biennial exercise. The 2018 stress test will include an assessment of the impact of IFRS 9, which will be implemented Jan. 1, 2018.

* Latvian central bank Governor Ilmars Rimševics said the ECB's quantitative easing program failed to give a "substantial boost to the overall growth" of the eurozone economy, Reuters reports. Rimševics becomes the third ECB official to express disappointment about QE in recent days, following similar expressions by ECB Chief Economist Peter Praet and Deutsche Bundesbank President Jens Weidmann.

* Brian Schwieger, global head of equities products at London Stock Exchange Group Plc, said a lot of work is "still being done, across the board" to prepare financial institutions from the impact of the Markets in Financial Instruments Directive, or MiFID II, which will take effect at the start of 2018, Reuters writes. Schwieger said 2017 will be the year companies get their final preparations in place for the directive.

UK AND IRELAND

* U.K. Treasury Select Committee Chairman Andrew Tyrie said the committee will launch an inquiry into whether the Bank of England's loose monetary policy in the wake of the 2008 global financial crisis had "unintended consequences," City A.M. reports.

* Legal & General Group Plc named Jeff Davies group CFO, effective after the group announces its 2016 preliminary results in spring 2017. Current Group CFO Mark Gregory will step down from the group board when Davies takes up his appointment but will remain an employee until Aug. 31, 2017.

* Royal Bank of Scotland Group Plc is nearing the sale of at least $600 million in shipping loans that primarily come from the group's Greek shipping business, insiders tell Reuters. The sources named Orix Corp., Berenberg Bank, Bank of America Merrill Lynch and Davidson Kempner as the buyers of the various shipping loan tranches.

* The U.K. High Court yesterday ruled in favor of RBS in a lawsuit accusing the bank of causing losses at Property Alliance Group due to missold interest rate swap products, City A.M. reports. A judge dismissed Property Alliance Group's claims that it had been missold four interest rate swaps, wrongly moved to RBS' Global Restructuring Group division and that key officials at RBS were aware about LIBOR manipulation.

* Standard Chartered Plc's Thai unit will transfer its retail banking business to Thailand-based TISCO Bank PCL as the U.K.-based group presses on with its restructuring and business divestments, Reuters writes.

* Helios Underwriting Plc conditionally agreed to acquire Lloyd's of London limited liability member Pooks Ltd. for £870,659 in cash.

GERMANY, SWITZERLAND AND AUSTRIA

* Dutch housing cooperative Vestia Groep sued Deutsche Bank AG over the sale of allegedly unnecessary and speculative interest rate derivatives that resulted in €800 million in damages and brought Vestia close to bankruptcy in 2012. Vestia said previous attempts to reach an out-of-court settlement failed and that it would specify later how much damages it intends to seek.

* UniCredit SpA CEO Jean-Pierre Mustier tells Handelsblatt that there are no plans to sell or list German subsidiary UniCredit Bank AG as it was of strategic importance for the group's European business, particularly for middle class clients and SMEs.

* Deutsche Börse AG CEO Carsten Kengeter tells Handelsblatt that he is confident that the planned merger with London Stock Exchange Group Plc will go ahead despite cartel concerns.

* Meanwhile, Deutsche Börse increased its stake in Berlin-based Tradegate AG Wertpapierhandelsbank by 5% to 19.82%, Börsen-Zeitung writes.

* Credit Suisse Group AG intends to cut 900 jobs in Switzerland next year as part of its target to eliminate 1,600 positions in the country by the end of 2018, Bloomberg News reports.

* Banking expert Liane Buchholz in a crucial vote was elected new president of the Savings Banks Association Westphalia-Lippe, effective March 31, 2017. She will replace Rolf Gerlach, who is leaving the association after 22 years at the helm.

* The new CEO of the Vienna stock exchange, Christoph Boschan, criticized the "tsunami of regulations" by the EU with regards to stock trading, listing and new investment products and also suggested dropping the capital gains tax for private investors in Austria, Die Presse writes.

* Kreissparkasse Stendal is joining other regional German savings banks in actively terminating long-term savings accounts of clients with attractive interest and bonus conditions, citing the low-interest environment and losses from such accounts, Handelsblatt reports.

FRANCE AND BENELUX

* Société Générale SA entered into a definitive agreement to sell its entire Croatian unit Société Générale - Splitska banka d.d. to OTP Bank Nyrt.'s OTP banka Hrvatska d.d. The transaction is expected to have a negative impact of about €240 million on Société Générale's fourth-quarter results and, upon completion, have a positive impact on the lender's financial ratios.

* French online mortgage broker Meilleurtaux.com and owner Equistone are in exclusive negotiations with Goldman Sachs about the sale of a controlling stake, according to Les Echos. The amount of the transaction is said to be around €265 million, according to L'Agefi.

* UBS French subsidiary agreed to buy Banque Leonardo France, chaired since 2013 by Michel Cicurel and Marc Lévy, who are also the founders of investment company La Maison, according to L'Agefi and Les Echos. On a second phase, UBS France and La Maison would join forces to create a joint-venture specializing in asset management for private clients. The new entity will be majority-owned by the UBS subsidiary.

* Several Société Générale workers in Equatorial Guinea have been arrested after being accused by local lawmakers of transmitting information covered by the banking secrecy to a French justice, according to Les Echos.

SPAIN AND PORTUGAL

* The European Court of Justice ruled that Spanish banks will need to repay more to reimburse mortgage customers over so-called floor clauses. Spain's Supreme Court in 2013 banned the use of minimum interest rate clauses in residential mortgage contracts, but the ruling was not retroactive. The new charges are likely to amount to billions of euros.

* The U.S. Federal Reserve fined Banco Bilbao Vizcaya Argentaria SA and subsidiary BBVA Securities Inc. $27 million for exceeding limits on securities underwriting and dealing activities previously imposed on the units.

* Banco Popular Español SA's board of directors unanimously approved the appointment of Emilio Saracho Rodríguez de Torres as new president of the banking group to replace Ángel Ron, Expansión writes.

* Banco Santander SA approved the appointment of Juan Manuel Cendoya as vice-president of Santander España, Expansión reports.

ITALY AND GREECE

* The ECB ordered the immediate recapitalization of Banca Popolare di Vicenza SpA and Veneto Banca SpA ahead of their merger using the €20 billion precautionary fund approved by parliament if needed, Il Messaggero writes. Reuters notes that Atlante has agreed to inject almost €1 billion in the lenders to help boost their capital.

* Mediobanca SpA through its Spafid unit bought Information Services Professional Solutions, a division of Bit Market Service, controlled by stock market operator Borsa Italiana, Il Sole 24 Ore writes.

* Hoist Finance AB (publ) acquired a portfolio in Italy comprising nonperforming unsecured consumer loans with a nominal value of €350 million from an Italian consumer bank. The purchase price was not disclosed, but Hoist Finance noted that investments exceeded €50 million.

* Bank of Cyprus Public Co. Ltd. said yesterday that a Cypriot district court sanctioned the scheme of arrangement that entails the bank's listing on the London Stock Exchange and establish Bank of Cyprus Holdings Plc as its new holding company.

NORDIC COUNTRIES

* The Swedish central bank said yesterday that it retained the repo rate at negative 0.50% and noted that there remains a greater possibility that the rate will be cut than raised in the short term. The central bank also decided to continue purchasing government bonds for 50 billion Swedish kronor during the first six months of 2017.

* Cevian Capital II GP Ltd., a fund managed by investment company Cevian, reduced its indirect holdings of shares and voting rights in Danske Bank A/S to below 5% of the bank's total share capital and voting rights from roughly 10% as of Nov. 1, Dagens Industri reports.

* Denmark's Ministry for Industry, Business and Financial Affairs approved an application from Nordea Bank Denmark to convert to branch status from Jan. 1, 2017, FinansWatch reports. The application is part of Nordea Bank AB (publ)'s plan to merge subsidiaries Nordea Bank Danmark, Nordea Bank Finland and Nordea Bank Norge into the parent company.

EASTERN EUROPE

* Vnesheconombank finally approved its new five-year strategy, under which it will support the Russian economy, stimulate innovation and swing to profit in 2018, Kommersant reports. The bank also plans to divest its noncore assets in 2017, including its banking subsidiaries in Russia and Ukraine. Russia will continue to support the state development bank, with 150 billion Russian rubles in subsidies earmarked for the lender in 2017.

* Reuters cites Vnesheconombank head Sergey Gorkov as saying that the 150 billion rubles state aid would solve its liquidity problems in 2017.

* Russian life insurer Rosgosstrakh Zhizn changed hands and is now owned by a company controlled by Alhas Sangulia, a former business partner of Danil Khachaturov, who controls Rosgosstrakh Holding and insurer PAO Rosgosstrakh, Vedomosti reports. The newspaper noted the life insurer changed its owner ahead of a potential merger of Rosgosstrakh and Otkritie Holding JSC.

* The Polish Justice Ministry's draft amendments to consumer lending legislation could disrupt the operations of nonbanking lending companies, specializing in the provision of consumer loans, while also affecting some banks and credit unions, Rzeczpospolita writes. The ministry proposed, among other things, to reduce the non-interest costs for consumer loans to the level of 10% of the loan value and an additional cap of 10% per annum from the current level of 25% of the loan value and an additional cap of 30% per annum. Puls Biznesu notes that consultations on the draft amendments end today.

* Alior Bank SA applied for regulatory approvals to launch operations in Spain, Rzeczpospolita reports. Polish banks are already present in the Czech Republic, Germany, Romania, Ukraine and Sweden, but the possibilities of their further geographic expansion are limited, the newspaper noted.

* Following the recent sale of Bank Pekao SA stake by UniCredit, Poland believes that more local lenders could be put up for sale by their foreign owners and will take an opportunistic approach toward potential deals, Reuters reports, citing Polish Deputy Prime Minister Mateusz Morawiecki.

* Seventeen insurance companies signed agreements with Polish competition regulator UOKiK to lower fees for liquidation of investment-tied insurance policies, news agency PAP and Rzeczpospolita report. The new conditions, expected to benefit 1.4 million clients, will come into force from Jan. 1, 2017.

* The Polish government is considering increasing tax on banks' foreign-currency assets in order to encourage local lenders to convert Swiss franc mortgages into Polish zlotys, Puls Biznesu says.

* UniCredit Banka Slovenija d.d. divested a portfolio of nonperforming Slovenian loans with a gross book value amounting to around €110 million, SEENews reports, adding that the portfolio was purchased by B2 KAPITAL.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: India fines foreign banks; China, Iceland extend currency swap deal

Middle East & Africa: Top Israeli bank set for international exit; Nigeria takes to the Internet

Latin America: Brazil unveils more economic measures; court upholds Banesco fine

North America: NYCB-Astoria deal termination leaves more questions

North America Insurance: Aetna-Humana antitrust trial nears close; Elements Property Insurance on block

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Spanish banks face hefty provisions following EU ruling on mortgage floors: Analysts said extra provision banks will have to make because of so-called mortgage floor clauses are unhelpful but manageable.

MBNA deal raises questions on capital, asset quality for Lloyds: Lloyds closed its first major acquisition since the 2008 financial crisis with the £1.9 billion purchase of credit card business MBNA, but analysts are divided about the impact of the deal on the bank's capital ratio.

LSE-Deutsche Börse tie-up faces major challenges despite possible LCH SA sale: London Stock Exchange Group is edging closer to selling off its French clearing operations as it seeks to appease European regulators over its potential merger with Deutsche Börse, but the sale may not go far enough to solve major challenges.

Sheryl Obejera, Arno Maierbrugger, Gerard O'Dwyer, Beata Fojcik, Mike Hatzidakis, Ali Kayalar, Yael Schrage, Stephanie Salti, Praxilla Trabattoni and Helen Popper contributed to this report.

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