* The U.K.'s governing Conservative Party lost its parliamentary majority in elections June 8, but will remain the largest force, leaving the identity of the next government in doubt just as negotiations on the country's departure from the EU are about to commence. The pound plummeted against the dollar as Prime Minister Theresa May's gamble on asking voters for a mandate to tackle Brexit talks backfired in spectacular fashion.
* As expected, the ECB left its key interest rates unchanged and reiterated its plan to continue monthly asset purchases to €60 billion until the end of December, or beyond, if necessary. The central bank's Governing Council removed a reference in previous monetary policy decisions to the possibility that rates might be cut in the future.
UK AND IRELAND
* S&P Global Ratings said Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc incurred a cumulative total of £66.2 billion in conduct and litigation charges between 2011 and 2016, but expects 2016 will "prove to be the last year in which the major U.K. banks incur outsized conduct and litigation charges." The rating agency expects British banks' total conduct and litigation charges to continue to gradually subside over the course of 2017.
* A consortium comprising Qatari conglomerate Al Faisal Holding and Swiss investment firm Interritus Ltd. are in discussions with the board and advisers of Co-operative Bank Plc regarding a takeover proposal for the distressed British lender, insiders told Sky News. A group of U.S. hedge funds working on a revised rescue deal for Co-op Bank is expected to object to the consortium's proposed takeover.
* HSBC unit HSBC Commercial Banking named Jane Galvin head of corporate banking at its newly created U.K. division and Ian Tandy as head of global trade and receivables finance at the same division.
* Former HSBC trader Stuart Scott, who is charged by U.S. authorities with foreign exchange manipulation, was arrested and conditionally bailed in the U.K., the Financial Times reported. Scott denies the allegations and intends to fight his extradition to the U.S. to face the charges.
* 1pm Plc completed the acquisition of invoice finance provider Tracx Finance Ltd., including its wholly owned trading subsidiary, Gener8 Finance Ltd. In addition, 28,861,117 new ordinary shares of 1pm were admitted to trading on AIM, comprising a placement of 22 million shares at 45 pence apiece to raise £9.9 million and an open offer to existing shareholders of 6,861,117 new ordinary shares at the same price on a 1-for-8 basis, which raised £3.1 million.
* London Stock Exchange Group Plc CFO David Warren said the strategic rationale for cross-border deals involving exchange companies still exists, and he expects big names in the industry to continue pursuing global consolidation despite the political challenges.
* Investors have asked the UK Listing Authority to refuse the plan of Saudi Arabian Oil Co., or Saudi Aramco, to list only 5% of its shares on the London Stock Exchange, as the amount falls below the minimum requirement to obtain a premium listing, The Daily Telegraph wrote. However, advisers to Saudi Aramco say the oil giant will not seek inclusion into the FTSE 100 stock index if it does proceed with listing its shares in the U.K.
GERMANY, SWITZERLAND AND AUSTRIA
* Deutsche Bank AG told U.S. lawmakers that it is prohibited by U.S. privacy laws from disclosing information regarding U.S. President Donald Trump's personal accounts at the bank that could show possible ties to Russia, Reuters wrote.
* Credit Suisse Group AG is set to cut some 1,500 jobs in London by 2018-end as part of global cost-cutting efforts, an insider told Reuters. The cuts would take Credit Suisse's London staff numbers to approximately 5,000.
* Swiss Re Ltd. opened new offices in Manchester, U.K., Finews.com reported. The new offices will serve as a regional hub for medium-sized and large corporate clients.
* Swiss wealth manager LFA SA appointed René Marty, former CEO of UBS Swiss Financial Advisers, as its new CEO, Finews.com reported.
* Zurich-based independent wealth manager Belvoir Capital agreed to buy Sloan Asset Management in an effort to facilitate access to the U.S. market, Finews.com wrote.
* UBS Group AG CFO Kirt Gardner said the Swiss bank expects net outflows in the range of CHF3 billion to CHF3.5 billion because of its move to charge euro deposit-holders, Reuters reported. UBS said last month that it would start charging clients with deposits exceeding €1 million a penalty rate of 0.6%.
* Executives of Julius Bär Gruppe AG told U.S. prosecutors that former employee Jorge Arzuaga acted alone when he allegedly used an account as a conduit for bribery payments to a FIFA soccer official in the Americas, Reuters reported. A spokesman for the Swiss lender said Arzuaga "never told anyone at the bank that any account was being used as a conduit for bribes."
FRANCE AND BENELUX
* A Paris appeals court ordered Société Générale SA to pay €10 million in compensation to Caledonian mining company SMGM for giving bad advice in selling cover for nickel sales, Les Echos reported.
* An ABN AMRO Group NV investigation showed that a total of 114 of more than 850 mortgage advisers forged client signatures between 2013 and 2016 when final terms of a mortgage advice report is incomplete or deviated from the client's choices. The Dutch group dismissed several mortgage advisers and their managers following the investigation, Reuters noted.
* Van Lanschot NV, now known as Van Lanschot Kempen NV, appointed Leonne van der Sar to its executive board as the head of merchant banking, effective Aug. 1.
SPAIN AND PORTUGAL
* Citigroup and UBS will manage Banco Santander SA's €7 billion capital increase, which is linked to its takeover of Banco Popular Español SA, insiders told Europa Press.
* The Portuguese government is proposing putting banks' toxic assets under centralized management without creating a vehicle to remove those assets from the banks' balance sheets, Jornal de Negócios wrote.
* A Spanish court ruled that Portugal's Novo Banco SA will have to participate in legal cases linked to the actions of predecessor Banco Espírito Santo SA, according to Jornal de Negócios.
ITALY AND GREECE
* Italy's government and stronger lenders are mulling over a plan under which each bank would contribute to the rescue of Banca Popolare di Vicenza SpA and Veneto Banca SpA, forestalling a scenario under which European regulators could shut down their operations, insiders told Reuters. UniCredit SpA and Intesa Sanpaolo SpA are prepared to contribute their share of the €1.2 billion in private capital that the European Commission wants injected in the troubled Venetian banks before a precautionary recapitalization takes place, but other Italian lenders are less convinced, MF said.
* A total of 110 small Italian cooperative lenders have decided to join forces under the cooperative credit holding company promoted by Cassa Centrale Banca Credito Cooperativo del Nord Est SpA, MF reported. The move is seen as an alternative to a second cooperative lending group to be led by Iccrea Holding SpA.
* The ECB approved a request by the Bank of Greece to lower the cap on emergency liquidity assistance available to Greek banks by €1.1 billion to €44.2 billion. The reduction reflects "developments in the liquidity situation of Greek banks."
* The Swedish government softened proposals to have banks pay higher contributions to a resolution fund that aims to protect the economy in the event of a financial crisis. Under the proposal, Swedish banks' contribution to the resolution fund would stand at 0.125% of liabilities less guaranteed deposits from 2018, before dropping back to the current 0.09% from 2019 and to 0.05% from 2020 until the reserves are filled, expected by 2025.
* Nordea Bank AB (publ) intends to take a detailed look at the Swedish government's proposal, Dagens Industri wrote. The bank had warned that it would move its headquarters out of Sweden due to the government's previous plan to have banks pay higher contributions to the resolution fund.
* OP Pankki customers experienced difficulties in accessing the bank's services yesterday after the lender's online and mobile banking platforms were shut down due to network-based technical problems, Helsingin Sanomat reported.
* The Slovenian government decided not to proceed with the privatization of Nova Ljubljanska banka dd over price concerns, Reuters reported. In line with its commitment to the European Commission, Slovenia was supposed to sell 50% of the bank in 2017 and a further 25% in 2018.
* Russian company Transneft managed to secure an arbitration court ruling invalidating a derivative transaction with PAO Sberbank of Russia as the result of which it incurred losses exceeding 66 billion Russian rubles, RBK Daily and Kommersant reported. Sberbank intends to appeal the ruling, Banki.ru said.
* Local lenders criticized the Russian Justice Ministry's idea to introduce legislative steps aimed at protecting individual borrowers from excessive fines imposed by banks for nonpayment of consumer loans, Kommersant wrote. The banks believe it could worsen the repayment of loans and lead to a slowdown in consumer lending.
* The new shareholders of Bank Pekao SA decided to replace the lender's entire supervisory board, appointing nine new members, PAP said. Rzeczpospolita noted that personnel changes are also in store for other institutions with a state participation, such as Alior Bank SA, PZU SA and possibly PKO Bank Polski SA.
* New managers are expected to be assigned for Turkish state-run lenders Türkiye Halk Bankasi AS and Türkiye Vakiflar Bankasi TAO, insiders told Reuters. Osman Arslan, the general manager of lender TC Ziraat Bankasi AS Islamic unit Ziraat Katilim, will be appointed as Halkbank's general manager, while Mehmet Emin Ozcan, the governor of the central bank of the Turkish Republic of Northern Cyprus, is said to take over as general manager of Vakifbank.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: Citi to boost Asia wealth biz; UK's Conservatives lose majority, exit poll shows
Middle East & Africa: Qatari group eyes UK lender; Central Africa mulls emergency liquidity facility
Latin America: Banco del Bajío prices IPO; lending growth slows in Peru
North America: BCB Bancorp buying IA Bancorp; Comey to testify before Senate panel
North America Insurance: NY insurers seek rate hikes; McConnell supports pre-existing illness protection
NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE
Data Dispatch Europe: Portuguese banks to benefit from economic uptick in bid to reduce bad loans: Accelerated economic growth in Portugal is good news for local banks as they try to reduce their comparatively high levels of nonperforming loans, but a bad bank may be required to solve the problem once and for all, according to some analysts.
Parliamentary surge set to help Macron tackle French unions: French president Emmanuel Macron's party is expected to win a majority in France's parliamentary elections, strengthening his hand as he bids to loosen labor laws and make his country more competitive.
New EU tax clampdown will force compliance costs, new systems on banks: Measures, which will require banks and other intermediaries to report to national authorities all tax avoidance assistance they give to clients, are likely to be "expensive and onerous," according to one observer.
Hard or soft Brexit on the line as May's UK election gambit backfires: Theresa May may not get as much leeway to negotiate a Brexit deal for the U.K. as she had hoped.
Leo Magno, Ed Meza, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Mike Hatzidakis, Ali Kayalar, Heather O'Brian, Brian McCulloch, Sophie Davies and Helen Popper contributed to this report.
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