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UK lawmakers poised to stop no-deal Brexit; RBS' PPI woes; KBC to cut 1,400 jobs

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UK lawmakers poised to stop no-deal Brexit; RBS' PPI woes; KBC to cut 1,400 jobs

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* The ECB is said to be looking at a stimulus package consisting of a rate cut and compensation for banks hit by negative rates, among other measures, insiders told Reuters. The central bank's monetary policy committee is set to meet next week. Economists polled by Reuters expect the ECB to lower rates further and restart its asset purchase program, and expressed uncertainty if the regulator can control inflation.

* Seven European mobile payments firms, including MobilePay Denmark A/S, are teaming up to from the European Mobile Payment System Association, which primarily aims to develop a cross-border contactless payment system, the Associated Press reported.

UK AND IRELAND

* U.K. Prime Minister Boris Johnson's government lost its working majority in Parliament after MP Phillip Lee defected to the Liberal Democrats from the Conservative Party, a move that could potentially hamper the British prime minister's Brexit plans. Lee said Johnson's government "is aggressively pursuing a damaging Brexit in unprincipled ways."

* Lawmakers in the U.K. House of Commons voted 328-301 in favor of taking control of the legislative agenda from Johnson, setting up a new vote for today that would delay Brexit in the absence of a deal to at least Jan. 31, 2020, from Oct. 31. Johnson said he will push for a snap election if the vote succeeds.

* Royal Bank of Scotland Group PLC expects to book an additional charge in the range of £600 million to £900 million in the third quarter to cover compensation for mis-sold payment protection insurance claims, although the final amount could be in the high or low end of the scale since the processing of claims is still underway. The bank noted that claims rose significantly higher than expected in last month, ahead of the Aug. 29 deadline.

* The U.K. Parliament's Treasury Committee named John Mann interim chair, replacing Nicky Morgan, who Prime Minister Boris Johnson appointed as secretary of state for digital, culture, media and sport in July. Mann will head the committee's scheduled session with the Bank of England today.

* U.S. bond fund manager Pacific Investment Management Company LLC, or Pimco, is among the interested parties to acquire a loan book of about £5 billion from U.K. Asset Resolution Ltd., the bad bank that took over the assets of collapsed firms Bradford & Bingley PLC and NRAM Ltd., Sky News reported. Pimco is reportedly expected to submit an offer this week.

* Aviva PLC poached Erica Arnold from Zurich Insurance Group AG to name her COO, subject to regulatory approval.

* British asset managers Premier Asset Management Group PLC and Miton Group PLC signed an all-share merger through a court-sanctioned scheme, in which Miton investors will receive 0.30186 premier shares in the merged entity for every share they own. The merged entity would have a pro forma AUM of £11.5 billion as of June-end.

GERMANY, SWITZERLAND AND AUSTRIA

* Germany's central bank is against prohibiting banks from charging retail customers negative interest rates to improve profitability, board member Joachim Wuermeling told Reuters. While consumers should be protected, banks must have leeway to manage their costs, Wuermeling said, noting that they would lack a possible instrument of profitability if they were banned from charging negative interest rates.

* Oberbank AG CEO Franz Gasselsberger said the Austrian bank was moving "against the mainstream" as it sought to increase the number of its branches at a time when other lenders were closing offices, Die Presse reported. Gasselsberger said the bank needed to expand its branches in Hungary, the Czech Republic and the German state of Baden-Württemberg.

FRANCE AND BENELUX

* KBC Group NV today unveiled three-year groupwide overhaul that includes 1,400 job cuts in Belgium. The group will also let go of 250 employees annually over the period in its Czech business unit. KCB noted that the overhaul would lead to recurrent cost savings in multiples of €10 million going forward.

* Scor SE launched Quantum Leap, a new strategic plan under which it aims to reach a growth of 4% to 7% annually. The French reinsurer also targets a return on equity 800 basis points higher than the five-year risk-free rates during the plan's time frame of July 1, 2019, to 2021-end, and an optimal solvency ratio in the range of 185% to 220%.

* The Dutch central bank will commence oversight of the digital currency sector beginning early next year. Companies must be registered no later than Jan. 10, 2020, but this could be moved to a later date, depending on the timing of the incorporation with Dutch regulations of the fifth European anti-money laundering directive, or AMLD5.

* Cboe Europe Ltd. will launch a hub in the Netherlands on Oct. 1 to allow investors to trade shares of EU-based companies regardless of whether Brexit takes effect Oct. 31, the Financial Times reported. The London-based stock exchange group has already clinched approval for its Amsterdam hub, which yesterday started accepting over €1.3 billion of privately negotiated equity deal reports.

* Belgian bank BNP Paribas Fortis SA is considering increasing its fees from next year to compensate for decreasing interest income, De Tijd reported.

* A Dutch court has ruled against a tax break being used in 2006 by a joint venture set up by Dutch bank NIBC Holding NV and French bank Société Générale SA, Het Financieele Dagblad reported. The two banks have "abused" the right to claim a tax break, the court said. NIBC said it has settled the 2006 case with the Dutch tax authorities, and that it was not part of the recent ruling. SocGen reportedly did not settle and may face a back payment of at least €20 million.

SPAIN AND PORTUGAL

* Spain's acting Socialist prime minister, Pedro Sanchez, proposed a minimum corporate tax rate of 15%, but 18% for financial institutions. The country has a corporate tax rate of 25%, but according to tax information on news website El Economista, companies usually manage to reduce that figure to 12% through tax deductions.

* Portugal's Novo Banco SA increased its exposure to large debtors by €750 million in just six months last year, Jornal de Negócios and the official Lusa news agency reported, citing central bank data. Between June and December 2018, the state-rescued lender's exposure to large debtors rose from €4.4 billion to more than €5.2 billion.

* Switzerland's Julius Bär Gruppe AG hired 10 wealth managers in Madrid to develop and grow market its market in Portugal on a cross-border basis.

ITALY AND GREECE

* Italy is poised to install a new government after 79.3% of party members of the anti-establishment Five Star Movement approved a coalition deal with the Democratic Party through an online poll, Reuters reported. Outgoing Prime Minister Giuseppe Conte is expected to return to his post and lead the new governing coalition, having previously announced his resignation in August.

* Italian finance company Cerved Group SpA mandated Mediobanca - Banca di Credito Finanziario SpA to evaluate potential strategic alternatives for the corporate division of its Cerved Credit Management Group Srl unit. The assessments are still at a preliminary stage and a final decision is yet to be taken.

NORDIC COUNTRIES

* Swedish financial regulator Finansinspektionen has questioned 18 top bank managers from Skandinaviska Enskilda Banken AB and Swedbank AB (publ) in connection with its investigation into money laundering, SvD reported. The regulator has also conducted a series of visits to the banks' headquarters.

* Danske Bank is selling Finnish real estate company Kiinteistömaailma, Hufvudstadsbladet reported.

EASTERN EUROPE

* The Russian central bank licensed Tinkoff Capital, a subsidiary of Tinkoff Bank JSC, to manage investment funds, mutual funds and private pension funds, Vedomosti wrote.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Deutsche Bank, BNP Paribas get Chinese underwriting license; Suncorp eyes sale

Middle East & Africa: France plots $15B credit line for Iran; South Africa averts recession in Q2

Latin America: Caixa Q2 profit jumps 21.6%; S&P warns of economic risks for Argentine banks

North America: Goldman eyes German fintechs; Mass. bank plans conversion; Maine CUs to merge

Global Insurance: Dorian weakens; UK losing insurance business; Rolls-Royce engine liability

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Forecast underwriting profit rise won't help reinsurers' ROE: S&P Global Ratings has predicted an improvement in the top reinsurers' underwriting profit, but said it will not result in a commensurate uplift in return on equity.

Liberbank remains hot target for takeover despite Unicaja merger failure: The lender had been in merger talks with Unicaja Banco SA, which broke down in May, and its CEO, Manuel Menéndez, told analysts during a recent earnings call that it remained "open" to merger opportunities, noting that consolidation could "drive shareholder value."

Reinsurance outlook stable, but climate change risks rising, Moody's says: The rating agency said the outlook is stable for the reinsurance sector, with profitability improving, capitalization strong and prices set to rise in some sectors, though it warned that climate change risks are mounting.

Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Roman Savinov, Yael Schrage, Brian McCulloch, Praxilla Trabattoni 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.