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BoE gets new head; Nordea in €575M deal; BBVA US unit goodwill adjustment


Banking Essentials Newsletter: January 11th Edition


Banking Essentials Newsletter December 21st Edition


The Road to Basel IV: Navigating the challenge facing European banks


Basel Framework- Utilizing data to analyze the capital position of European banks.

BoE gets new head; Nordea in €575M deal; BBVA US unit goodwill adjustment

S&P Global Market Intelligence offer our top picks of banking news stories and more published throughout the week.

Bank of England

* U.K. Financial Conduct Authority CEO Andrew Bailey will succeed Mark Carney as governor of the Bank of England, effective March 2020. Carney's term will end Jan. 31, 2020.

* The FCA is investigating the BoE's acknowledgement that a third-party supplier misused the audio feed of a number of Bank of England press conferences before they had been officially broadcast. The central bank along with its U.S. counterpart are analyzing their broadcast feeds for potential deficiencies following the revelation.

* The U.K. central bank expects GDP growth of 0.1% in the fourth quarter, down from a growth rate of 0.2% anticipated in November.


* French lender Société Générale SA agreed to sell its Norway-based equipment finance and factoring unit SG Finans AS to Nordea Finance, the pan-Nordic finance division of Nordea Bank Abp, for a purchase price of €575 million.

* La Banque Postale SA, the banking unit of French postal service company La Poste SA, is evaluating a potential bid for HSBC Holdings PLC's retail operations in France as part of its diversification plans.

* Commerzbank AG is expected to receive initial offers for Polish unit mBank SA from PKO Bank Polski SA and a consortium comprising Polish insurer Powszechny Zakład Ubezpieczeń SA and unit Bank Pekao SA by mid-January 2020.

* The U.S. hedge fund investors of Co-operative Bank PLC mandated Goldman Sachs Group to launch discussions with potential buyers for the U.K.-based lender. Barclays PLC, Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC are understood to be among the banks approached for a possible deal, although a formal sale process is yet to begin.


* Spanish bank Banco Bilbao Vizcaya Argentaria SA expects to make a negative adjustment of roughly $1.5 billion to the value of the goodwill in its U.S. unit, citing a slowdown in the country's economy and declining interest rates, particularly during the second half.

* Credit Suisse Group AG said it expects a pretax gain of at least CHF450 million in the fourth quarter from the revised accounting treatment of its stake in Swiss stock exchange operator SIX Group AG.

* Poland-based Alior Bank SA expects its profitability to improve in 2020 and is targeting a net interest margin of at least 4.5%. The lender also expects its cost of risk will fall to about 2% in 2020 from the estimated level of 2.3% in 2019.

Bank strategies

* French banking group BNP Paribas SA plans to relocate 75 commodity finance jobs to Geneva in Switzerland from Paris to consolidate its specialized trade solutions team focused on the regions of Europe, the Middle East and Africa.

* Standard Chartered PLC said it will cease financing for three coal-fired power plants in Southeast Asia amid mounting global pressure on banks to stop financing fossil-fuel-based power projects.

* UBS Group AG's co-heads of wealth management, Iqbal Khan and Tom Naratil, plan to break up the bank's ultra high-net-worth unit to bring some clients under regional divisions, insiders told Bloomberg News.

Italy bank rescue

* The Italian government approved a capital injection of up to €900 million for struggling lender Banca Popolare di Bari SCpA after the Bank of Italy placed it under special administration. Popolare di Bari will use €500 million of the cash to shore up its financial strength, while the remaining funds will be reserved for future requirements.

Regulatory actions

* All the main U.K. banks passed the Bank of England's 2019 stress test, for which the scenario was more severe than the actual financial crisis and included a disorderly Brexit, though banks saw greater losses on corporate exposures than previously.

* The Finnish Financial Supervisory Authority fined S-Pankki Oy €980,000, mainly for failing to meet requirements in customer due diligence, a key requirement in preventing money laundering and terrorism financing.

* Sweden's Financial Supervisory Authority launched a sanctions probe into Skandinaviska Enskilda Banken AB as part of its investigation into the bank's alleged involvement in the Baltic money-laundering scandal.

In other news

* Banks and insurers in the U.K. will be stress-tested against the effects of different climate change scenarios in what the Bank of England claims will be pioneering tests.

* The Swedish central bank concluded a five-year streak of negative interest rates by raising its key rate despite a slowdown in the economy, and downgraded its economic growth forecast for 2019.

* The ECB licensed Estonia-based Luminor Bank AS to issue covered bonds.

* Ireland's Ulster Bank Ireland DAC will pay a €500 million dividend to its parent company NatWest Holdings Ltd., a unit of Royal Bank of Scotland Group.

Featured during the week on S&P Global Market Intelligence

European i-banks shine amid fixed-income surge in Q3 but 2020 outlook more muted: Helped by a surge in fixed income, Credit Suisse, BNP Paribas and Barclays booked the highest year-over-year rise in third-quarter trading revenues, outpacing global peers. The trend continued in late 2019 but is expected to moderate in 2020.

Expenses increase as big Nordic banks spend more fighting money laundering: Big Nordic banks including Danske Bank, Swedbank, Nordea Bank and DNB saw a year-over-year rise in operating expenses for the nine months ended Sept. 30.