TOP NEWS IN GLOBAL FINANCIALS
* Asian firms are gearing up for the potential effects of the conflict between Russia and Ukraine. South Korea's financial regulators started drafting contingency arrangements for the deployment of resources and tools, such as market stabilization funds, to calm the market if it takes a hit from the ongoing crisis, The Korea Herald reported, citing a source with knowledge of the matter.
South Korean lenders KEB Hana Bank and Woori Bank – whose loan exposures in the third quarter of 2021 were estimated to be 296 billion won and 266.4 billion won, respectively – are preparing contingency measures for the potential impact of the recent sanctions against Russia on their operations in the country, The Korea Times reported.
Meanwhile, Industrial & Commercial Bank of China Ltd., or ICBC, and Bank of China Ltd. restricted financing for Russian commodities amid Russia's military action of Ukraine, Bloomberg News reported, citing unnamed sources. ICBC stopped issuing U.S. dollar-denominated letters of credit for purchases of physical Russian commodities ready for export, while Bank of China curbed financing based on its own risk assessment as it awaits guidelines on Russia from Chinese regulators. The two lenders, as well as the China Banking and Insurance Regulatory Commission, did not immediately respond to requests for comment, the news platform added.
* The U.S., EU, U.K. and Canada agreed to remove "selected Russian banks" from the Society for Worldwide Interbank Financial Telecommunication as part of the latest round of sanctions targeting Russia over its military operations in Ukraine. They also agreed to impose restrictive measures aimed at preventing the Russian central bank from deploying its international reserves in ways that undermine the impact of the sanctions, the European Commission said.
* U.S. banks are readying themselves for cyberattacks amid an escalation in the conflict between Russia and Ukraine, and following the move to block certain Russian banks from the Swift messaging network by the U.S. and its allies, Reuters reported, citing cyber experts and executives. Analysts also say the threat of such attacks will drive further investments in the security landscape.
➤ Credit card delinquency, net loss rates tick up while yields fall in January
Bank of America President and CEO Brian Moynihan noted during the bank's Feb. 17 conference presentation that paydown rates on cards are starting to slow down.
➤ YOY credit quality improvement continues in Q4'21
Credit trends are expected to normalize as the impact from pandemic relief efforts dissipates and labor costs increase, but credit quality finished 2021 at historically strong levels.
US & CANADA
* The Goldman Sachs Group Inc. is cooperating with the U.S. Securities and Exchange Division and producing documents related to a probe of its compliance with records preservation requirements pertaining to business communications sent over electronic messaging channels that have not been approved by the company, according to Goldman's most recent 10-K filing.
* The SEC is proposing a rule that would provide greater transparency to investors and regulators by increasing the public availability of short sale-related data. Specifically, the new rule would require institutional investment managers exercising investment discretion over short positions meeting specified thresholds to report on the proposed Form SHO information relating to end-of-the-month short positions and certain daily activity affecting such short positions.
Click here for more of the day's essential bank and financial services news in the U.S. and Canada.
LATIN AMERICA
* Brazil's Banco Bradesco SA, through unit Bradescard Elo Participações SA, completed the purchase of 49.99% of Banco Digio SA stake held by BB Elo Cartões Participações SA for 645 million reais. Bradesco now holds 100% of Banco Digio.
* Spain's Banco Bilbao Vizcaya Argentaria SA will open a representative office in Chile, about five years since the bank exited from the Latin American country. The branch will provide investment banking services.
EUROPE
* France's Société Générale SA and Switzerland-based Credit Suisse Group AG paused commodities trading financing from Russia following sanctions against the country, insiders told Bloomberg News. Dutch banks ING Groep NV and Rabobank have also reportedly restricted financing deals to move commodities from Russia to Ukraine. SocGen and Credit Suisse declined to comment, according to Bloomberg.
* Bank of Ireland Group PLC swung to a full-year 2021 profit of €1.06 billion from a year-ago loss of €707 million. In a statement, CEO Francesca McDonagh said an update on the Irish lender's strategy and outlook to 2024 will be provided this year, including refreshed medium-term goals.
Click here for more of the day's essential financial news in Europe.
MIDDLE EAST & AFRICA
* United Arab Emirates-based First Abu Dhabi Bank PJSC has agreed to sell a 60% stake in its Magnati payments business to Bermuda-based private equity firm Brookfield Business Partners LP. The transaction, which values Magnati at up to $1.15 billion, is subject to regulatory approvals.
* South African lender Absa Group Ltd. expects its IFRS headline EPS for the year ended Dec. 31, 2021, to increase by 190% to 200% to between 21.20 rand and 21.93 rand from 7.31 rand a year ago. EPS is expected to rise year over year by 195% to 205% to between 21.0 rand and 21.71 rand from 7.12 rand.
ASIA-PACIFIC
* The exposure to the Ukrainian and Russian markets of banks, insurers and securities firms in Taiwan dropped by NT$10 billion to NT$217.91 billion as of Jan. 31, the Taipei Times reported, citing the Financial Supervisory Commission. The investments in Russia of Taiwan's top two financial holding firms, Fubon Financial Holding Co. Ltd. and Cathay Financial Holding Co. Ltd., totaled NT$21.2 billion and NT$20 billion, respectively. The firms have no investments in Ukraine.
* China's securities regulator ordered Morgan Stanley to share details of an ongoing U.S. investigation into the investment bank's block trading business, the Financial Times reported. The bank declined to comment on the probe, which comes as it seeks regulatory approval to expand in China.
Click here for more of the day's essential financial news in Asia-Pacific.
Mary Christine Joy and Ryan Jeffrey Sy contributed to this report.
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