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M&A impact of FDIC chair's resignation; big US banks set for guidance reset

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M&A impact of FDIC chair's resignation; big US banks set for guidance reset

Sector Spotlight: Global Financials is a weekly summary of exclusive banking, financial services and insurance industry news and analysis from S&P Global Market Intelligence.

US and Canada

* FDIC chairman's resignation paves path for review of merger rules

Federal Deposit Insurance Corp. Chairman Jelena McWilliams will step down from her post on Feb. 4, allowing the remaining Democratic board members to pursue stricter M&A regulation with fewer obstacles.

* Big US banks poised for guidance reset in Q4'21 reports after rates increase

Analysts expect that cash-heavy balance sheets will keep net interest margins under pressure in the 2021 fourth quarter, but that they might be bottoming out.

* Acting OCC Comptroller Hsu likely to keep Democratic support despite FDIC snafu

Michael Hsu's work on cryptocurrency and the Community Reinvestment Act will likely earn him the Democratic votes he needs to be confirmed should President Joe Biden nominate him to head the Office of the Comptroller of the Currency permanently.

* After topping $75B in 2021, bank M&A shows no signs of slowing down

Total U.S. bank deal value surged to $77.58 billion in 2021, a 15-year high, as banks teamed up in large, transformational mergers to offset growing operational pressures.

Latin America

* Brazil's banks to see better profitability, slower credit demand

After two years of strong growth years in credit, Brazilian bankers reckon on a slower 6.7% pace in 2022 with weak GDP growth forecasted. Banks will target higher-quality loans, strengthening profitability.

* Banco do Brasil issues 1st social bond as ESG wave seen to continue in 2022

Banco do Brasil's first-ever social bond issuance serves as a bellwether for Brazilian companies that would want to continue riding the environmental, social and governance wave this year.

* LatAm banks get stable 2022 outlook; risks abound

Rating agencies have a stable outlook for the Latin American banking sector this year, but warn of risks in the form of higher inflation and interest rates, a scaleback of government support and still-weak investor demand for credit.

Europe, Middle East and Africa

* SocGen's €4.9B LeasePlan buy accelerates European banks' auto-leasing drive

The French banking giant's acquisition of the Netherlands-based auto leasing firm is the latest and largest move by a European lender in the sector.

* Deutsche Kreditbank sale would slash BayernLB's profits, deposits

The German retail bank has about 4.8 million clients and accounts for more than half of BayernLB's pretax profit.

* Turkish bank stocks unlikely to recover soon after 2021 rout

An ongoing currency crisis in Turkey sent bank share prices tumbling in 2021, with five of the country's banks making it onto the list of the 15 worst-performing bank stocks in Europe in the year.

Asia-Pacific

* Australian banks face tricky outlook with margin pressure, housing risks

Australian banks face a challenging new year as they contend with record-low interest rates, tighter lending requirements and the risk of the housing market cooling.

* Indonesian lenders maintain lead as best-performing bank stocks of Q4'21

Small Indonesian banks are likely to sustain their strong stock performance in the new year after besting their regional peers in 2021, as the Southeast Asian nation's economic outlook improves.

* Asian finance executives renew call for ESG investment standards

Asian finance executives called for greater partnership and industrywide standards for ESG investments amid a renewed focus on sustainable finance.

Global Insurance

* Significant discipline' at Jan. 1 reinsurance renewals may set tone for '22

Price increases were steeper for the retrocession reinsurers buy than for the cover they sell, which could put further upwards pressure on prices.

* Insurance for systemic risks creates security 'illusion' – Zurich exec

Zurich Insurance Group's top risk officer, Peter Giger, said the dividing line between insurable and uninsurable risks is sometimes unclear.