TOP NEWS IN GLOBAL FINANCIALS
* HSBC Holdings PLC posted a first-quarter after-tax profit attributable to ordinary shareholders of the parent company of $2.80 billion, down from the year-ago $3.88 billion, mainly driven by provisions for expected credit losses of $642 million, compared with a release of $420 million a year ago. The provisions include $250 million related to Russia's invasion of Ukraine and $160 million related to China's commercial real estate sector. The U.K.-based bank will launch a $1 billion share buyback program in May, but group CFO Ewen Stevenson played down the prospect of further repurchases in 2022.
* The enforcement division of the U.S. SEC has started an investigation of exchange-traded fund revenue-sharing practices, specifically information related to payments or compensations made by advisers or ETFs to financial intermediaries, the Financial Times (London) reported, citing a letter shared with a sister publication of the news outlet. The regulator is looking to see whether fund groups' payments to broker/dealers and other intermediaries have conflicts of interest and have caused certain products to be promoted more than others in light of such arrangements, according to the report.
➤ French banks face up to mounting challenges as election shock is avoided
Relief at the reelection of Emmanuel Macron will be short-lived as France's largest lenders face up to the problems posed by the impact of the war in Ukraine on revenues and asset quality.
➤ Australian banks' return to bond market to raise costs, pressure margins
Australian banks may see increased pressure on their margins as they become more active in capital market issuances after enjoying years of cheap funding as rising interest rates add to funding costs.
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 Consumer Financial Protection Bureau is invoking a "largely unused" legal provision to examine nonbank financial companies that pose risks to consumers. Congress authorized several categories of the agency's nonbank supervision program after the 2008 financial crisis, such as those in the mortgage, private student loan and payday loan industries, larger participants in other nonbank markets for consumer financial products and services, and others.
* Washington Trust Bancorp Inc. is considering changes to its overdraft policies, in line with other industry peers, but does not expect to see any impact from those changes on earnings until the end of 2022, according to executives on the Rhode Island-based company's quarterly earnings call.
Click here for more of the day's essential bank and financial services news in the U.S. and Canada.
LATIN AMERICA
* Banco Santander (Brasil) SA reported first-quarter net profit of 4.01 billion Brazilian reais, up from 3.96 billion reais a year ago. Total revenues increased year over year to 18.56 billion reais from 17.79 billion reais, while loan loss provisions totaled 4.61 billion reais, up from 3.16 billion reais.
* Mexico's economy is expected to have expanded in the first quarter for the first time in three quarters, according to a Reuters survey. A projected GDP growth of 1.1% was driven by domestic consumption and a rebound in exports, according to the news wire.
EUROPE
* Banco Santander SA's first-quarter profit attributable to the parent climbed 58.1% year over year to €2.54 billion from €1.61 billion, with the Spanish group noting that its geographic and business diversification has, to some extent, shielded it from the adverse effect of Russia's invasion of Ukraine. The bank booked net loan loss provisions of €2.10 billion, up from the year-ago €1.99 billion. Santander said it remains confident it can achieve its 2022 targets.
* Swiss bank UBS Group AG's first-quarter net profit attributable to shareholders rose 17% to $2.14 billion from the year-ago $1.82 billion. Pretax profit at the group's investment bank division more than doubled year over year to $929 million from $412 million. The group said its direct exposure to Russia stood at roughly $400 million as of March 31, adding that the groupwide profit-and-loss impact of its exposure to the country was roughly $100 million. Meanwhile, UBS is considering growth opportunities in the U.S. after the region helped shield the company from a slowdown in its private banking business in Asia, Bloomberg News reported, citing an interview with CEO Ralph Hamers.
Click here for more of the day's essential financial news in Europe.
MIDDLE EAST & AFRICA
* Nairobi Securities Exchange PLC is planning to acquire more stakes in bourses in African countries, such as Nigeria and Botswana, after taking a 4.9% shareholding in Tanzania-based Dar es Salaam Stock Exchange PLC, Reuters reported, citing CEO Geoffrey Odundo. The Kenyan bourse has cash reserves of up to 1.5 shillings for acquisitions, Odundo reportedly said. Nairobi Securities Exchange is also considering acquiring stakes in related businesses, such as technology and depository services.
* Fitch revised to positive from stable the outlooks of the long-term issuer default ratings of Saudi Arabian lenders Gulf International Bank - Saudi Arabia C.JSC, Arab National Bank, Bank AlJazira, Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Alinma Bank, following a similar action on the sovereign's outlook. The rating agency affirmed the banks' long- and short-term issuer default ratings at BBB+/F2.
* Abu Dhabi Commercial Bank PJSC reported a 32% year-over-year increase in its first-quarter net profit to 1.48 billion United Arab Emirates dirhams from 1.12 billion dirhams. Net interest income rose on a yearly basis to 2.15 billion dirhams from 2.12 billion dirhams. The bank posted a 58% fall in its impairment charges to 294 million dirhams from the year-ago 704 million dirhams due to higher recoveries and improved economic conditions.
ASIA-PACIFIC
* South Korea's Hana Financial Investment Co. Ltd., a unit of Hana Financial Group Inc., signed a 142 billion won deal to acquire a 35% stake in Vietnam-based brokerage BIDV Securities JSC, The Korea Times reported, citing a company statement. Post-transaction, the company will become the second-largest shareholder of BIDV Securities, according to the report.
* Japan's Mizuho Financial Group Inc. plans to beef up its operations in the U.S. for M&A advisory and equity underwriting to gain a bigger share of the global investment banking fee pool, President and CEO Masahiro Kihara told Reuters in an interview.
Click here for more of the day's essential financial news in Asia-Pacific.
Rhema Peñaflor and Christiana Sciaudone contributed to this report.
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