The SEC is investigating the sale of $850M in bonds issued by Mozambique, the latest development in a scandal that is exposing the links between the country, three international banks and a defense contractor.
In 2013, Credit Suisse (NYSE:CS), Russian bank VTB Group and BNP Paribas (OTCQX:BNPQY) sold the bonds to investors for a Mozambican state-owned company that said it needed money for tuna fishing, but months later, the government announced that the funds had also been used to buy military equipment.
BNP Paribas (OTCQX:BNPQF) is considering spending billions of euros through 2020 to improve digital and other services, a French labor group said, citing discussions with top management.
The bank is currently working on a new four-year business plan to be presented early next year. It has held to its 2016 goals, despite record-low interest rates weighing on revenues and rising regulatory demands.
European banks are set to cut back equities trading and research teams in Asia, as global cost-cutting reaches a region where a drop in Chinese trading volumes and local competition have hit profits.
Bankers and headhunters told Reuters that BNP Paribas (OTCQX:BNPQF), Deutsche Bank (NYSE:DB) and Barclays (NYSE:BCS) are among lenders likely to slash their workforce, setting the tone for a tough 2016.
Ten of Europe's largest banks already announced 130K job cuts since last June.
The Financial Stability Board has published new rules that aim to stop banks from becoming "too big to fail," confirming its final proposals for Total Loss Absorbing Capacity, or TLAC.
Under the plan, large lenders will have by January 2019 to hold a financial cushion of at least 16% of their risk-weighted assets in equity and debt that can be written off. That requirement will gradually increase, reaching 18% of assets weighted by risk by January 2022.
The FSB will put the rules, which will apply to the world's top 30 banks, to the G20 later this month.
JPMorgan Chase (NYSE:JPM) will pay almost a third of a $1.86B settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit default swaps market, Bloomberg reports.
JPM reportedly will pay $595M, followed by Morgan Stanley (NYSE:MS) with $230M, Barclays (NYSE:BCS) at $175M, Goldman Sachs (NYSE:GS) at $164M, Credit Suisse (NYSE:CS) at $160M and Deutsche Bank (NYSE:DB) at $120M; BofA (NYSE:BAC), BNP Paribas (OTC:BNPZY), UBS, Citigroup (NYSE:C), Royal Bank of Scotland (NYSE:RBS) and HSBC would pay less than $100M each.
The deal would avert a trial and end years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group.
General Electric (NYSE:GE) has completed the previously announced sale of its U.S. fleet services business to Element Financial Corporation (OTC:ELEEF) in a transaction valued at approximately $5B.
The sale of GE's Mexican, Australian and New Zealand fleet businesses to Element is expected to close at the end of Q3, while the sale of GE's European fleet businesses to Arval, a fully-owned subsidiary of BNP Paribas (OTC:BNPZY), is expected to close in Q4.
Five more banks have agreed to settle U.S. investor lawsuits tied to a global currency-rigging scandal, which claimed the institutions conspired to manipulate the $5.3T-a-day foreign-exchange market.
HSBC (NYSE:HSBC), Barclays (NYSE:BCS), Goldman Sachs (NYSE:GS), BNP Paribas (OTC:BNPZY) and Royal Bank of Scotland (NYSE:RBS) now join a list of nine firms which previously settled the class actions, bringing the total amount investors have recovered to $2B.
With forecast-beating earnings underpinning market sentiment, European stocks advanced slightly after a three-day gain, heading for their biggest monthly jump since February.
Among the European notables this morning: Airbus (OTCPK:EADSY) +3.5% despite a new A400M charge; BNP Paribas (OTC:BNPZY) +3% after beating expectations; CaixaBank (OTCPK:CAIXY) -1.8% after cutting guidance; Lloyds (NYSE:LYG) is little changed; ArcelorMittal (NYSE:MT) +1.8% on keeping forecasts; Carrefour (OTCPK:CRRFY) edged higher after a profit rise; BG Group (OTCQX:BRGYY) up slightly despite a 65% slump in net income.
The record $9B fine levied against BNP Paribas (OTCPK:BNPQF) is presenting U.S. authorities with novel legal questions, after morphing into a fight over whether terrorism victims should get any of the money.
BNP pleaded guilty to violating sanctions in June 2014 by funneling billions of dollars through the U.S. financial system for clients in Sudan, Iran and Cuba.
Now, a group of terrorism victims is asking the DOJ to compensate them with funds from the BNP settlement, attempting to draw a connection between the French bank's misconduct and terrorist acts overseas.
The Federal Reserve and FDIC have vetoed the "living wills" of the U.S. units of BNP Paribas (OTCPK:BNPQF), HSBC (NYSE:HSBC) and Royal Bank of Scotland (NYSE:RBS), stating that they could face sanctions by the end of the year if the issues are not fixed.
Living wills, which are a requirement under Dodd-Frank, spell out how a firm would wind down its operations under U.S. bankruptcy code if it got into trouble.
More than half of the €7.5B in newly issued Santander (NYSE:SAN) stock was purchased by U.S. investors, reports the FT, with about 25% bought by U.K. owners.
The bank issued 1.214B shares at £6.18 each as new executive chairman Ana Botin quickly broke ranks with her late father's strategy just four months after replacing him atop the company.
The ADRs are lower by 4.5% premarket after yesterday's 7% decline.
Now that Santander has joined Deutsche Bank in raising capital, analysts turn their attention to the next dominoes. High on the list: BNP Paribas (OTCQX:BNPQY), Societe General (OTCPK:SCGLY), Credit Suisse (NYSE:CS), Commerzbank (OTCPK:CRZBY), and Credit Agricole (OTCPK:CRARY).
BNP Paribas (OTCQX:BNPQY) reported an 11% jump in third-quarter net profit, as gains in its investment-banking business helped it recover from the previous quarter when it was hit with a record $8.9B fine for sanctions violations.
The bank posted net profit for the period from July through September of €1.5B ($1.9B), compared with €1.36B a year earlier, on revenue of €9.5B.
Last week, BNP Paribas (OTC:BNPZY) completed the ECB’s stress tests unscathed.