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UK slams EU plan on share trade; funds eye Sabadell unit; Amundi's Germany plans


Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022


Investment Banking Newsletter April 2022


Banking Essentials Newsletter - April Edition

UK slams EU plan on share trade; funds eye Sabadell unit; Amundi's Germany plans

* The European Securities and Markets Authority said it will revise its share trading obligation, or STO, in case of a no-deal Brexit and will now only apply it to stock issued by companies incorporated in the European economic area, or EEA. The regulator's new guidance means that EU banks and funds can continue trading the 14 key U.K. stocks that were included in the previous list in London. The U.K. Financial Conduct Authority criticized the new plan and called on the EU regulator to recognize the "reality" of open markets.

* The financial stability environment in the eurozone has become more challenging over the last six months, the ECB said in its latest Financial Stability Review report. The regulator noted that banks were struggling with low return on equity of roughly 6% last year and warned that climate change-related risks have the potential to impact financial institutions' balance sheets.

* ECB Vice President Luis de Guindos told Bloomberg News that the central bank is facing a "much more challenging" path to monetary policy normalization compared to a year ago amid increased external risks including global trade tensions.

* The U.S. Treasury Department warned that the European payments system created to trade with Iran without violating U.S. sanctions could face "severe consequences," Bloomberg News reported.


* The U.K. Financial Conduct Authority banned former RP Martins Holdings Ltd. broker Terry Farr from performing functions related to regulated financial activities for his alleged role in arranging nine so-called wash trades between 2008 and 2009 to obtain unwarranted brokerage payments for the company.

* The U.K. Competition and Markets Authority raised questions on whether Non-Standard Finance PLC's attempt to take over rival Provident Financial PLC will result in a substantial reduction of competition in the industry. NSF proposed to demerge its Loans at Home unit to address concerns about a home credit overlap, but the regulator said shareholders of the demerged company and enlarged NSF would be the same since shares in the demerged unit would be allocated to NSF shareholders.

* U.K.-based BondMason Ltd. informed customers that it will exit its peer-to-peer lending business as it expects a downturn in performance, the Financial Times reported.

* Ireland-based global information services firm Experian PLC named Mike Rogers chairman, effective July 24 at the conclusion of its annual general meeting, replacing Don Robert.


* German central bank President Jens Weidmann is rather skeptical about the introduction of digital central bank money, saying concerns about it should "not be wiped away lightly" and that "digital central bank money for a wide circle of users could – depending on the design – possibly have serious consequences," Handelsblatt wrote.

* PostFinance AG, in the course of its planned partial privatization, is considering a capital increase, CEO Hansruedi Köng told Tages-Anzeiger. Köng added that parent company Swiss Post could redeposit part of proceeds from the sale of new PostFinance shares as fresh equity.

* DZ Bank AG made first-quarter pretax profit of €548 million, up from €437 million a year ago, co-CEO Uwe Fröhlich said at the bank's annual general meeting in Frankfurt yesterday.

* After the second tranche of Switzerland's automatic exchange of information mechanism has been approved by the country's federal council, Swiss banks will have to transfer customer data to 19 more states starting from 2021. Since the end of September 2018, Switzerland automatically exchanged information on financial accounts with 36 states and territories, and plans to exchange data with 37 other partner states as of the end of September 2019. This list will include countries such as China, Russia and Saudi-Arabia, Finews noted.

* Paul-Otto Faßbender, head of central group functions at ARAG Holding SE and management board chairman, will step down from his posts by July 2020 and join the insurer's supervisory board, Handelsblatt wrote. He will be succeeded by Renko Dirksen, currently ARAG's management board member responsible for investment, corporate development and organization.

* Stefan Zapotocky prematurely stepped down from his post as a member of the management board of Vienna-based Sberbank Europe AG, Trend reported.


* French market regulator AMF has been given more sanctioning powers as a result of the introduction of a bill, according to Les Echos. From now on, the regulator will be able to take cognizance of facts dating back to as far as six years, compared to just three years at present.

* French asset management firm Amundi SA wants to expand in Germany and is seeking to double its AUM there to €80 billion in the next three years, Handelsblatt cited Fannie Wurtz, Amundi's head of global ETF business, as saying.

* Dutch bank ABN Amro Group NV is expecting less growth for stock prices due to declining corporate profits, De Telegraaf reported. The bank plans not to expand its share of investments and will maintain a neutral outlook for these investments.

* Dutch insurer NN Group NV will no longer invest in companies largely dependent on coal, De Telegraaf reported.


* U.S. private equity funds Cerberus Capital Management LP and Oaktree Capital Group Holdings GP LLC submitted a binding buyout bid for Banco de Sabadell SA's real estate business, SDIn, insiders told Reuters.

* Portugal's parliament has instructed the central bank to publish details of the banking system's biggest debtors, Jornal de Negócios and Expresso reported. The central bank earlier cited banking secrecy laws for its decision not to reveal the names of the debtors, but the parliamentary motion orders the central bank to disclose the totals owed to leading lenders by June 2.

* Portugal's APB banking industry association has broadly welcomed a government proposal to change the treatment of impairments for tax purposes, Expresso reported, citing the association's president, Fernando Faria de Oliveira. He said banks would have liked more time to adapt to the new fiscal regime, which envisions a five-year transition period.


* The European Commission sent a letter to the Italian government seeking explanations over its excessive debt levels, giving Rome until May 31 to respond. The letter comes ahead of an EU report on Italy's borrowing next week, which is likely to recommend a disciplinary procedure against the country.

* The Italian Supreme Court upheld a 2017 court verdict in acquitting three former Banca Monte dei Paschi di Siena SpA executives, including former Chairman Giuseppe Mussari and former CEO Antonio Vigni, of misleading authorities over a derivative trade in 2009, Reuters reported.

* Banco BPM SpA is not interested in strengthening its position in the central and southern part of the country, effectively closing the door on a possible interest in Banca Monte dei Paschi di Siena and Banca Carige SpA, MF reported. Banco BPM CEO Giuseppe Castagna said no Italian bank was interested in taking over struggling Carige unless there would be financial support from the state, Reuters reported.

* Italian state lender Cassa depositi e prestiti SpA is planning to increase its holding in local payments processor SIA SpA to roughly 83% by purchasing stakes from other shareholders, insiders told Reuters. The move could increase the chances of SIA potentially merging with Italian peer Nexi SpA in the future.

* The EU Commission has decided to appeal an EU court ruling overturning its decision to block the rescue by Italy's interbank deposit protection fund of small lender Tercas, Reuters reported.

* BPER Banca SpA and Banca Popolare di Sondrio SCpA are ready to capitalize on their stake in Arca and toward this end, adviser McKinsey will present June 13 to the board of BPER three options for the asset manager, including a possible IPO and a merger with another asset manager, MF reported.

* Leonardo Rubattu will step down as director general of Iccrea Holding SpA, effective June 15, MF wrote.


* The Swedish government proposes that moving capital from one pension insurance to another should be tax exempt, but is criticized for the suggestion. Dagens Industri reported.

* Icelandic bank Arion banki hf. expects to reach its medium-term financial targets despite an expected recession in the Icelandic economy this year, Realtid reported. The bank has forecast a negative GDP growth for Iceland of close to 2%, but said the economic downturn is expected to be short-term and does not affect its goals.


* The Slovak central bank could increase the countercyclical buffer for local banks if risks to financial stability remain high, Reuters reported, citing the regulator's financial stability report. The central bank noted that capital adequacy ratios at local lenders dropped slightly in 2018 and it is necessary to stop this trend, especially at small and medium-sized banks where the ratios should be growing.

* VTB Bank PJSC does not need to set aside additional bad loan provisions after earmarking 50 billion Russian rubles for this purpose in 2018 at the central bank's request, the lender's First Deputy Head Dmitry Olyunin told Reuters.

* Meanwhile, Kommersant reported that VTB Bank plans to launch retail lending in Vietnam via Vietnam-Russia Joint Venture Bank, in which it has a 50% stake.

* Public Stock Co. Orient Express Bank minority shareholder Artem Avetisyan asked a Russian arbitration court to order the lender's majority shareholder Baring Vostok to execute the immediate sale of a 9.99% stake in the lender to Avetisyan's company Finvision in a transaction that would give him control of the bank, news agency RBC reported.


Asia-Pacific: ANZ Bank New Zealand names interim CEO; Bandhan Bank to open 16 branches

Middle East & Africa: Hapoalim Q1 profit up; Israel faces snap election; Liberia revamps central bank

Latin America: BTG selling 2B reais of shares in banking unit; Alignvest-Sagicor deal approved

North America: Piper Jaffray agrees to sell Advisory Research; 2 California banks in deal

Global Insurance: AIG could sell Manhattan HQ; tornadoes lash Midwest; Old Republic proxy access


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.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Yael Schrage, Stephanie Salti, Sophie Davies and Helen Popper contributed to this report.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.