TOP NEWS IN GLOBAL FINANCIALS
* Citigroup Inc. said it is continuing its efforts to exit its consumer banking business in Russia and will be operating that business on a more "limited basis" in light of the conflict between the country and Ukraine, according to a blog post on the company's website. Separately, an unnamed source told the Financial Times (London) that since potential buyers in Russia are likely to be affected by economic sanctions by the U.S. and European countries, winding down the bank's Russian retail operations may be Citi's only option given the situation.
* The European Central Bank urged banks to determine if they need to provision for potential losses on loans to Russian companies and to those doing business in Russia or Ukraine that might be less directly affected by the conflict or sanctions, insiders told Bloomberg News. The regulator also reportedly questioned banks on how individual companies and economic sectors would fare amid supply chain disruptions and increases in commodity prices. An ECB spokesperson declined to comment to Bloomberg.
* Home Credit Group BV shortlisted Japan-based Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and Singapore's Grab Holdings Ltd. for the potential sale of its assets in Southeast Asia and India, for which it is seeking a valuation of $2 billion to $2.5 billion, Bloomberg News reported, citing sources familiar with the matter. Representatives for the banks and the Kellner family's investment firm, PPF Group NV, declined to comment, while a representative for Grab did not immediately respond to requests for comment.
➤ M&A, IPOs hit a speed bump in early 2022
Increased market volatility poses a risk to deal-making in 2022 after IPOs and M&A activity reached historic heights in 2021.
➤ Japanese megabanks face higher credit cost pressure over Russian loan exposure
Potential losses associated with exposure to Russia are adding to growing pressure on credit costs for the biggest lenders in Japan, which is struggling with post-pandemic recovery and rising borrowing costs.
➤ France leads Europe in loans, deposits growth in 2021
Monetary financial institutions in France posted the biggest increase in loans and deposits in Europe at 2021-end, while three Nordic banks still have the highest loan-to-deposit ratios among the biggest lenders by assets.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
US & CANADA
* The Goldman Sachs Group Inc. is at the early stage of considering offering over-the-counter bilateral crypto options, Bloomberg News reported, citing people with knowledge of the matter. Such options would allow trades to be customized so holders can hedge risks or boost yields, according to the report.
* Geopolitical tensions have increased the risk of a recession, and Fifth Third Bancorp has ramped up bond purchases because it expects interest rates to top out at a lower peak, the Cincinnati-based company's executives said at an industry conference.
Click here for more of the day's essential bank and financial services news in the U.S. and Canada.
LATIN AMERICA
* Brazilian antitrust regulator CADE approved Banco Pan SA's incorporation of shares in Mosaico Tecnologia ao Consumidor SA and the bank's capital increase as a result of the merger.
* Mexican inflation rose 0.83% in February from January while core monthly inflation ticked 0.76% higher, data from the national statistics institute showed.
EUROPE
* Deutsche Bank AG said its "very limited and tightly managed" gross loan exposure to Russia totaled €1.4 billion at 2021-end, equivalent to 0.3% of the German lender's overall loan book. Including guarantees and collateral, the net exposure was €600 million. To Ukraine, the gross and net loan exposures were €600 million and €42 million, respectively. Additionally, Deutsche said the operational risks from a potential shutting of its Russian technology center were well contained.
* Credit Suisse Group AG's net credit exposure to Russia was CHF 848 million as of 2021-end but has since been reduced, the Switzerland-based bank said, adding it had minimal total credit exposures to sanctioned individuals that are clients of its wealth management division. Additionally, Credit Suisse said higher trading and hedging business activity in the short term amid the market impact of the Russia-Ukraine war is expected to be offset by lower capital market issuances due to increased volatility and credit provisions.
Click here for more of the day's essential financial news in Europe.
MIDDLE EAST & AFRICA
* The Bank of Mauritius raised the key repurchase agreement rate by 15 basis points to 2%, citing heightened risks to inflation. The central bank also revised its inflation forecast to roughly 6.7% for 2022, subject to further headwinds from the Russia-Ukraine war.
* The South African Reserve Bank appointed Fundi Tshazibana CEO of the central bank's Prudential Authority in a rotation of deputy governors aimed at developing well-rounded central bankers exposed to all areas of SARB's work. Tshazibana's appointment is effective from April 1 until her term as deputy governor expires in July 2024.
* Rayan Mohammed Fayez resigned as CEO and managing director of Banque Saudi Fransi, effective May 31. Fayez will remain a member of the Saudi Arabia-based bank's board.
ASIA-PACIFIC
* Former Shaw and Partners COO Dan Jowett took over the role of CEO of Openmarkets Group Ltd. after Ivan Tchourilov resigned as the firm undergoes restructuring, The Australian Financial Review's Street Talk blog reported. The Australian financial technology firm said it received an injection of additional capital from shareholders, which coincided with the rolling of some convertible notes and a cash payment for some convertible notes that were redeemed.
* Thailand-based Bangkok Bank PCL plans to offer loans via its mobile banking app during the first half, Krungthep Turakij reported. The lender is looking to increase the number of digital banking users to 14 million by 2022-end.
Click here for more of the day's essential financial news in Asia-Pacific.
Erin Tanchico and Ryan Jeffrey Sy contributed to this report.
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