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Credit Suisse market revenue slumps; ex-Deutsche exec convicted; banks watch Veneto


Banking Essentials Newsletter: 7th February Edition


Insurance Underwriting Transformed How Insurers Can Harness Probability of Default Models for Smarter Credit Decisions

Case Study

A Bank Outsources Data Gathering to Meet Basel III Regulations


Private Markets 360° | Episode 8: Powering the Global Private Markets (with Adam Kansler of S&P Global Market Intelligence)

Credit Suisse market revenue slumps; ex-Deutsche exec convicted; banks watch Veneto

Editor'snote: S&P Global Market Intelligence has launched a Daily Dose offering forthe Middle East and Africa. This regional news overview will be published by 9a.m. Dubai time, Monday to Friday. To read the first edition, please clickhere.

Investors to focus onSolvency II, despite flaws, Fitch says: Fitch Ratings saysinvestors are expected to adopt the headline Solvency II ratio as their firstmeasure of insurers' capital strength, despite the model's flaws. The ratingagency said it will continue to assess insurers' capital based primarily on itsprism factor-based capital model, as it believes prism scores are morecomparable than Solvency II metrics.


Former Deutscheexec convicted of insider dealing conspiracy: The U.K. Financial ConductAuthority saidyesterday that former DeutscheBank AG Managing Director Martyn Dodgson and chartered accountantAndrew Hind, ex-finance director of retail chain Topshop, were convicted ofconspiring to engage in insider dealing between November 2006 and March 2010.The pair face up to seven years in prison, TheGuardian notes.Andrew Harrison, Ben Anderson and Iraj Parvizi, the other three defendants inthe case, were acquitted.

* The British Bankers' Association invited members to talksthis week with U.S. Secretary of State John Kerry over the implications of therecent lifting of various economic sanctions against Iran, Sky News reports.The meeting, which comes amid hesitancy by U.K. banks to resume doing businessin Iran, was proposed by U.K. Foreign Secretary Philip Hammond and is expectedto include executives from German and French banks.

* LloydsBanking Group Plc could face a backlash after shareholder advisorygroups PIRC and Manifest called CEO Antonio Horta-Osorio's pay"excessive," The Daily Telegraphwrites.Horta-Osorio received £8.8 million in pay, bonuses and long-term incentiveslast year, down from £11.5 million in 2014, but still above his peers at rivalbanks. Shareholders are set to vote on pay at Thursday's annual general meeting.

* Marme Inversiones, owner of 's Madridheadquarters, asked a London judge to delay a dispute with andother banks over a loan deal it signed to fund its €1.9 billion acquisition of theCiudad Financiera complex, accordingto Bloomberg News. Marme, which is in administration, says it shouldnot have to make about €700 million of payments to RBS and other banks forinterest rate swaps linked to EURIBOR, which it alleges that RBS was trying torig.

* Industry analysts say U.K. challenger banks are drivingdown mortgage costs for consumers as they increase competition in the mortgageindustry, The Daily Telegraph reports.The rise of challenger banks is also pulling interest rates on credit cardsdown.


Credit SuisseQ1 global markets revenue falls 60% YOY: Credit Suisse Group AG reporteda first-quarter net loss attributable to shareholders of CHF302 million,compared to CHF1.05 billion earned a year earlier, which it said reflectedchallenges in the global economy. The global markets division recorded a pretaxloss of CHF635 million, compared to pretax profit of CHF842 million a year ago,as revenues fell 60% year over year to CHF973 million. The bank said itachieved, on an annualized basis, more than half of the CHF1.4 billion of netcost savings it is targeting for 2016.

* MunichRe CFO Jörg Schneider saidthe company's first-quarter resultwas "below our expectations" as profit attributable to equity holdersfell year over year to €430 million from €790 million, on the back of"significant strains" on the investment result. Schneider warned thatthere will likely be high costs for implementing the strategy program atERGO Group AG,leading the company to "now envisage a consolidated result of €2.3billion" for the full year, which is at the lower end of the company'spredicted profit guidance.

* HannoverRe reportedfirst-quarter group net income of €271.2 million, compared to €279.7 million inthe same period a year ago. Excluding a €39 million special effect from theprevious year, group net income rose 12.7% year over year. CEO Ulrich Wallinreaffirmed the company's aim to achieve a full-year profit of at least €950million.

* Aareal BankAG reportedfirst-quarter consolidated net income attributable to shareholders of €55million, up from €40 million a year ago. The group anticipates a consolidatedoperating profit of between €300 million and €330 million for the full year,having booked an operating profit of €87 million during the first quarter, upfrom €67 million a year earlier.

* Austrian Chancellor Werner Faymann resigned yesterdayafter the far-right Freedom Party came first in the initial round ofpresidential elections in April, BBC News reports. Faymannalso stepped aside as leader of the Social Democratic party. Deputy ChancellorReinhold Mitterlehner will serve as interim chancellor.

* Deutsche BankAG is facing renewed scrutiny by Germany's financial watchdog and apossible fine of up to €1 million in connection with the apparently lateannouncement last year that Anshu Jain and Jürgen Fitschen were stepping downas co-CEOs, Wirtschaftswoche reports.

* Prosecutors in Frankfurt have launched an investigationagainst CommerzbankAG in connection with fresh revelations that it enabled foreigninvestors to benefit from tax breaks for German shareholders on dividends, or"cum-cum" transactions, accordingto Bloomberg News. The lender is facing some 20 investigations fromprosecutors in Berlin, Cologne, Dusseldorf, Munich and Stuttgart into cum-extransactions, which were carried out for domestic investors, the Süddeutsche Zeitung notes.

* Jorge Arzuaga, a former Julius Bär Gruppe AG banker, is assisting U.S.authorities investigating corruption in world football, Bloomberg reports.Arzuaga is the first banker to cooperate in the investigation into bribery andkickbacks that influenced the awarding of media and marketing rights totournaments in the Americas.

* HSH NordbankAG namedStefan Ermisch CEO, effective June 10, confirming the departure of current CEOConstantin von Oesterreich. Ermisch is the bank's CFO and deputy CEO. OliverGatzke will become the bank's new CFO.

* Deutsche Bank appointed Darren Campili global co-head ofhealth care investment banking coverage, Bloomberg reports.

* Swiss ReLtd. named Judy Klugman and Jean-Louis Monnier co-heads of itsglobal insurance-linked securities business activities within the capitalmarkets unit, Artemis writes.


ING Q1 resultfalls YOY: ING GroepNV reporteda first-quarter net result of €1.26 billion, down from €1.77 billion in theyear-ago period. Regulatory costs increased on a yearly basis to €496 millionfrom €174 million, while the net result from banking operations declined to €829million from €1.17 billion.

* GroupeBPCE reportedfirst-quarter net income attributable to equity holders of the parent of €872million, compared to €873 million in the year-ago period. Unit postedfirst-quarter consolidated net income group share of €200 million, includingnonoperating items and IFRIC 21 impact, compared to €287 million a year earlier.

* Two experienced corporate bankers will leave this summer tojoin ING, Het Financieele Dagblad reports.Executive director Pim Kist and managing director Rico Overhaart were involvedin the IPOs of Intertrust and Refresco. Kist will be managing the stockissuance division at ABN AMRO.

* Edmond de Rothschild named Roderick Munsters, formerly CEOof Robeco Groep NV,to serveas global CEO for its asset management unit. Munsters will replace LaurentTignard.

* ASRNederland NV will publish first-quarter figures to allow it toconduct an IPO before August, DeTelegraaf reports.CEO Jos Baeten had said he didn't plan to release quarterly figures, but IPOrules require that a listing prospectus use information that is no more than135 days old, meaning that this weekend would be the last opportunity to gopublic using the full-year 2015 report. The insurer wants to announce an IPOwithin a few days or weeks, but realizing this within four days is impossible,according to the report.


Santander,BBVA make commodity provisions: Banco Santander SA and setaside €100 million and €95 million, respectively, in first-quarter provisionsfor oil, gas and other commodity exposures in the U.S., Expansión reports.Together, the two banking giants are exposed to the energy sector for a totalof €25.6 billion, including €16.1 billion at BBVA.

* CaixaBankSA presented a prospectus to the Portugal's CMVM market regulatordetailing its offer for a full takeover of Banco BPI SA, DiárioEconómico reports.Following Monday's presentation, BPI will have eight days to respond.Meanwhile, Angola's central bank chief, Walter Filipe, met BPI CEO Fernando Ulrichin Luanda earlier in May to discuss the takeover offer, accordingto Angola's O País.

* Portugal's central bank will wait until after Britain's June 23 referendumon EU membership to launch the sale of Novo Banco SA, Jornalde Negócios writes.In the event of a vote for "Brexit," the possibility of selling thebank on the stock market could be shelved, the report says, adding thatalthough the exact mechanism would not be finalized until late June, thecentral bank hopes to complete the sale by the end of July.

* The board of GrupoCooperativo Cajamar, Spain's main credit cooperative and ruralsavings bank, appointedFrancisco Gonzalez Lopez director general. He replaces Jose Luis HerediaCeldrán, who was elected second vice president at an April 27 general meeting.Deputy Director General Bartolomé Viúdez Zurano is also leaving his executiverole to join the bank's board.


UBI,BPER keep eye on Veneto: Unione di Banche Italiane SpA and are among four lenders taking an interest in the upcoming capital increase ofVeneto Banca SCpA, Il Messaggero writes. Veneto's new management willhold its first meeting with the ECB as soon as Friday, Il Sole 24 Ore reports.

* BPER is also looking at all four good banks of the small Italianlenders bailed out last year, not just CARIFE SpA, MFwrites.Meanwhile, Rothschild and Lazard could be among the candidates to advise on thesale of the nonperforming vehicles of the bailed-out lenders, the publication adds.

* Shareholders of Banco Popolare Società Cooperativa have expressed such ahigh interest in taking part in the €1 billion capital increase for the mergerwith Banca Popolare di MilanoScarl that the lender may decide to offer all of the increase withoption rights, MF writes.

* Cassa di Risparmiodi Cesena SpA has contacted the Interbank Deposit Protection Fundto help it cover its upcoming €100 million capital increase and does also notrule out the intervention of the Atlante fund, Il Messaggero writes.

* Monday's meeting of the Eurogroup of finance ministers ended withGreece and its international creditors slightly closer to a deal to finalize abailout review and release a fresh tranche of funding, reports.Greece looks to have won a concession on contingency measures should it fail tomeet budgetary surplus targets, meaning that it will not have to legislate forthe measures now. The Eurogroup will meet again May 24.


Danish FSAfinds fault with 3 lenders: The Danish FSA has adjudgedNordea Bank AB (publ)unit Nordea Bank DanmarkA/S' operational risk management mechanisms and policies to beflawed and directed the bank to reorganize its risk management systems anddevelop new guidelines to better control its supervisory processes. DagensIndustri, SvenskaDagbladet  and Taloussanomathave reports. The FSA also identifiedflawswith operational risk management controls and systems at and , both of which werereprimanded and told to strengthen guidelines, accordingto Børsen.

* Danish insurer Codan A/S signed a cooperation agreement with thatwill allow the bank's 11,000 corporate customers to purchase insurance productsprovided by Codan, and distributed through Arbejdernes Landsbank, at specialpremium rates, FinansWatch reports.


PKO Q1 profitdown slightly YOY: PKO BankPolski SA reported first-quarter net profit attributable to equityholders of the parent company of 638.6 million zlotys, down from 647.2 millionzlotys in the year-ago period. The lender's result was influenced by Poland'snew asset tax, the value of which amounted to 148 million zlotys, Rzeczpospolita says.Parkiet notesthat PKO is working on a new strategy, which will be unveiled in June and willfocus on digital development. Branch reductions will be part of the newstrategy, PAP says.

* The Russian central bank carried out 647 inspections oflocal lenders in 2015, with 64.9% of them discovering violations related to theunderestimation of credit risks, Vedomostireports.Inspected lenders often concealed the actual value of bad loans, issued newloans for customers to pay off old debt and issued loans to clients with insufficientinformation about their income, the newspaper notes.

* As of today, the corporate and retail business ofBank of Moscow willbe integrated into parent JSC VTBBank, Vedomosti reports.VTB will take more than 900 billion rubles, or 70%, of Bank of Moscow's assets,while the remaining, poor quality assets, including 243 billion rubles of loansprovided to former Bank of Moscow owners and managers, will be held in a"bad bank." Reuters also has a report.

* OAO RussianNational Commercial Bank, which operates in Crimea, asked PresidentVladimir Putin for a capital boost of 21 billion rubles to be provided between2017 and 2019, Vedomostiand Kommersant report. The lenderreportedly has ambitious plans to expand its loan portfolio, but theirimplementation has been hampered by the current size of its capital.

* Bank BPHSA wrote down its assets by 370 million zlotys at the stand-alonelevel and a further 77 million zlotys at group level to match terms of theplanned sale of its core business to Alior Bank SA, PAP reports.

* Czech President Miloš Zeman is expected to name JiríRusnok head of the Czech central bank May 25, Hospodarske Noviny reports.Zeman also has to appoint two members to the central bank board by the end ofJune, with former ING chief economist Vojtech Benda among the leadingcandidates.


* Unofficial results project Rodrigo Duterte, the mayor ofDavao, Philippines, to have won the country's presidential election, BBC News reports. With 90% ofballots counted, Duterte led the national polls with about 39% of the votes.

* Mossack Fonseca sent a letter of apology to an unnamedShanghai-based banking client following the Panama Papers data leaks, Reuters reports.It is not known whether the law firm sent similar letters to other companiesaffected by the leak.

* Waldir Maranhao, the interim speaker of Brazil's lower house,yesterday attempted to annul the impeachment vote against President DilmaRousseff, saying the ballot would need to be re-run, Reuters reports.The Senate pressed ahead with impeachment proceedings, with a vote set forWednesday on sending Rousseff to trial, which would result in her suspensionfrom office.

* LendingClubCorp. Chairman and CEO Renaud Laplanche following an internal review ofsales of $22 million in near-prime loans to a single investor. The company saidthe sale directly contravened the investor's instructions.


Basel mortgage floorscould slash capital ratios at ING, other Dutch banks: The BaselCommittee wants banks to store more capital against mortgage loans. Dutch bankscould see their capital ratios slide under the proposals.

Insurance IPO castsspotlight on risks and opportunities in India: The Indian insurancemarket presents attractive opportunities for foreign investors, but a fight formarket share will take its toll on margins.

Rich Lovie, Ed Meza, Stephanie Salti, PraxillaTrabattoni, Chantal Groothengel, Beata Fojcik, Helen Popper, Mike Hatzidakis,Gerard O'Dwyer, Yael Schrage and Ali Kayalar contributed to this report.

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