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Aldermore in M&A talks with FirstRand; Austria set to have new chancellor

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


Aldermore in M&A talks with FirstRand; Austria set to have new chancellor

* The European Commission and the U.S. Commodity Futures Trading Commission declared that their margin requirements for uncleared swaps are equivalent. The agreement is expected to be finalized in November, according to Reuters.

* A number of ECB policymakers have determined a €2.5 trillion limit for the central bank's quantitative easing program under current rules, insiders told Bloomberg News. A decision on the program, which is set to reach €2.28 trillion by year-end, is due Oct. 26.

* Hong Kong's Securities and Futures Commission withdrew its lawsuit against UBS Group AG and Standard Chartered Plc over market misconduct in the 2009 IPO of now-delisted China Forestry Holdings Co., according to The Wall Street Journal.

UK AND IRELAND

* South Africa-based FirstRand Ltd. made an indicative proposal to acquire Aldermore Group Plc's entire issued and to-be-issued ordinary share capital for 313 pence per share in cash. Aldermore said its board had indicated to FirstRand that it is "likely to recommend a firm offer at this level."

* Royal Bank of Scotland Group Plc may have disqualified thousands of small businesses from receiving compensation for the alleged mistreatment of customers by its now-defunct Global Restructuring Group, the Financial Times wrote. RBS' definition of which customers qualify for its £400 million compensation scheme reportedly differs from that used by the U.K. Financial Conduct Authority.

* Meanwhile, RBS CEO Ross McEwan criticized former business customers making "false accusations" about the bank's controversial small business restructuring unit, The Times of London reported. "If people aren't happy with our procedures, let them sue us," McEwan said.

* U.K.-based debt collection firm Cabot Credit Management Group Ltd. is set to launch its delayed IPO this week, an insider told Reuters. The firm had planned to announce plans to float on the London Stock Exchange in mid-September but was forced to push back its plans after former Provident Financial Plc CEO Peter Crook resigned from its board.

* Old Mutual Plc completed the sale of its 26% stake in India-based Kotak Mahindra Old Mutual Life Insurance Ltd. to joint venture partner Kotak Mahindra Bank Ltd. for £138 million.

GERMANY, SWITZERLAND AND AUSTRIA

* Austria's conservative People's Party looks set to win the country's national election, setting the stage for current Foreign Minister Sebastian Kurz to become the country's next chancellor, early projections and exit polls showed. Short of a majority, Kurz's People's Party could form a coalition with the Freedom Party, which also posted a strong showing in early results. Final results are not expected until later this week.

* Deutsche Börse AG CEO Carsten Kengeter discussed a possible merger of the exchange with London Stock Exchange Group Plc with then German Finance Minister Wolfgang Schäuble and government experts weeks before he made an alleged insider share purchase in December 2015, Wirtschaftswoche wrote.

* U.S. private equity firm J.C. Flowers & Co. LLC will make a bid to acquire HSH Nordbank AG, insiders told the Financial Times. The bank must find an investor by the end of the month to avoid liquidation.

* DARAG Deutsche Versicherungs-und Rückversicherungs-AG named Tullio Ferrucci CEO of its Italian business, Post noted.

* Raiffeisen Gruppe Switzerland CEO Patrik Gisel "absolutely" ruled out a sale of Notenstein La Roche Privatbank AG despite being disappointed with its performance, Handelszeitung wrote, citing an interview with Tages-Anzeiger.

* UBS is among global banks planning to expand their presence in Saudi Arabia to tap new opportunities arising from the beginning diversification of the country's economy, the Financial Times reported. Separately, Chairman Axel Weber said the Swiss bank aims to keep as many research analysts as possible in London after Brexit, Bloomberg News wrote.

FRANCE AND BENELUX

* ABN AMRO Group NV is set to provide international leverage loans for the first time since its nationalization in 2008, Het Financieele Dagblad reported.

SPAIN AND PORTUGAL

* Catalan President Carles Puigdemont this morning wrote a letter to Spanish Prime Minister Mariano Rajoy seeking dialog over the Catalan independence movement, El Confidencial said. Puigdemont has until this morning to comply with a national government order and announce whether his government has declared independence from Spain, BBC News wrote. If Puigdemont says he did proclaim independence, he will have until Thursday to withdraw the declaration or the Spanish government could move to take control of the autonomous region.

* Banco Santander SA will need to issue €750 million in Additional Tier 1 instruments and €1 billion in Tier 2 instruments to comply with total loss-absorbing capacity requirements following its acquisition of Banco Popular Español SA earlier this year, Europa Press wrote.

ITALY AND GREECE

* Generali CEO Philippe Donnet told Handelsblatt that the insurer does not need a capital increase and that its capital position is strong, Reuters noted. He added that the firm has seen "great external interest" for its €44 billion German life insurance portfolio, but declined to say whether a sale is on the cards.

* Enrico Maria Fagioli will lead Sirio, the nonperforming loan platform created by Cerved and Quaestio that will take on Banca Monte dei Paschi di Siena SpA's €26.1 billion in NPLs, Il Sole 24 Ore reported.

* Banca Popolare di Sondrio SCpA made an offer to take over Cassa di Risparmio di Cento SpA, with the merger expected to take place next year, Il Sole 24 Ore wrote.

* ChiantiBanca Credito Cooperativo SC will hold a shareholders' meeting to vote in favor of joining Iccrea Holding SpA, instead of the previously announced Cassa Centrale Banca Credito Cooperativo del Nord Est SpA, La Repubblica wrote.

* A civil court in L'Aquila ordered former Banca Tercas CEO Claudio Di Gennaro to pay €176 million and former director general Antonio Di Matteo to pay €192 million to Banca Popolare di Bari, which bought the troubled Banca Tercas in 2014, La Repubblica wrote.

* Ten senior Piraeus Bank SA executives resigned between July and September following suspected irregularities in the sale of a €1.2 billion loan package to New York-based conglomerate Libra Group at a discount, insiders told the Financial Times.

NORDIC COUNTRIES

* Topdanmark A/S raised its 2017 after-tax profit forecast by 250 million Danish kroner to between 1.5 billion kroner to 1.6 billion kroner, excluding run-off items for the fourth quarter. The company said the improved forecast is primarily due to run-off profits, higher financial returns and a "more favorable" level of weather-related claims than expected.

* Private equity firm Nordic Capital Ab acquired a 10% stake in Swedish niche bank Nordax Group AB (publ), Dagens Industri reported.

* Chinese payments giant Alipay is about to enter the Danish market and become a direct competitor of Danske Bank A/S' payment service MobilePay and Nets A/S' Dankort, according to Børsen.

EASTERN EUROPE

* PJSC Bank ALEKSANDROVSK decided not to sell 19.9% of its shares to PJSC Bank Saint-Petersburg and plans an additional share issue in 2018, targeting a wider circle of investors, Vedomosti reported.

* The Russian central bank approved a rescue plan for B&N Bank, Reuters reported. The plan includes a capital hike and the provision of liquidity support for the lender, the newswire noted, adding that the regulator did not disclose financial details regarding the rescue.

* Representatives of Raiffeisen Bank International AG came to Poland to discuss the IPO of Raiffeisen Bank Polska SA with the local Financial Supervision Authority, Puls Biznesu said, adding that the Austrian parent reportedly wants more time to float the Polish unit. The FSA wants RBI to float the unit by May 2018.

* Polish Deputy Prime Minister Mateusz Morawiecki said the country is in the final stage of talks with two global banks seeking to relocate some of their operations to Poland, Bloomberg News wrote.

* Hungarian central bank Deputy Governor Márton Nagy said the base interest rate will remain unchanged at 0.9% until at least 2020, while the three-month Budapest Interbank Offered Rate could remain at its current level of 0.03% until the beginning of 2019, Reuters reported.

* Hungary's state development bank MKK is competing with foreign investors to acquire nonperforming loans from local banks, Reuters reported. MKK, which acquired a large chunk of soured mortgage loans from CIB Bank Zrt., is looking to acquire more as lenders step up their cleanup efforts to boost lending.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: HK drops suit against UBS, StanChart; Australia to conduct banking stress test

Middle East & Africa: FirstRand tables £1.08B offer for Aldermore; foreign banks eye Saudi expansion

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

UK challenger bank shares jump on news of FirstRand's Aldermore approach: Aldermore's confirmation that the large South African bank had approached it with a takeover offer will support valuations of other small, specialist lenders, one analyst said.

DBRS: Continued volatility in Spain could have impact on bank funding: The rating agency says that continued volatility in Spain could have an impact on banks' funding, but notes that recent measures by some lenders to move headquarters help remove depositor and investor concerns.

Carige back from brink, but analysts cautious about its long-term outlook: The Italian bank seems to have narrowly avoided failure and is now likely to crawl back to health, albeit at a slower pace than its own targets suggest, according to analysts.

Leo Magno, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stephanie Salti, Praxilla Trabattoni, and Mariana Aldano contributed to this report.

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