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ING could bring forward the return of €10bn public aids

MADRID | The Corner | ING Group 2Q14 underlying net profit of EUR 1,181 million from EUR 901 million in 2Q13 and EUR 988 million in 1Q14. The company has announced that it would repay the state aid received in 2008  earlier than planned (May 2015) and confirmed the growth targets for 2017 (as well as the payment of dividends, with a payout of 40%), set last March.


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Portugal rescues BES with €4.9bn coming from Troika’s bail-out

BERLIN | Alberto Lozano | The Portuguese government splits BES into two banks. On the one hand, it will inject €4.9 billion of capital in a new company called “Novo Banco”, which will get all the assets and employees from the crisis-hit bank. On the other hand, all toxic assets mostly related to its exposure to the Espirito Santo family will stay in the current Espirito Santo’s “bad bank”.


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BCE: Widespread decline in interest rates of banking corporate credit

MADRID | The Corner | The ECB reported on Thursday the data of interest rates applied in banking corporate loans in June, which have been reduced by 18 bp in loans worth up to €1M for the EZ (up to 3.57%). Moreover, these discounts have been widespread and even higher in peripheral economies’ banks: -21 bp up to 4.3% (weighting by GDP of rates applied in Spain, Italy, Ireland and Portugal).

 


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United Kingdom, Santander’s main source of profits

MADRID | By Fernando G. Urbaneja | United Kingdom has displaced Brazil, which displaced before Spain as first market by benefit contribution to Banco Santander. Of the 2,750 million € earned in the first six months (+22% over the first half of 2013), 20% comes from the British market. Brazil contributes the 19% of benefits and Spain recovers share until reaching the 13%. And then there are United States (9%), Mexico (8%), Chile (7%), Poland (6%), Germany (5%), Portugal (2%) and other countries from Europe and Latin America (11%).       

                       


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The decline of nearly 40% of BES shares hampers the European financial sector

MADRID | The Corner | The Western stock indexes closed yesterday with prominent drops, reaction for which there was not a single trigger, but the sum of the various concerns that have been accumulating in recent days. The negative tone was maintained throughout the day, closing both European and U.S. stock markets near daily lows. It is important to emphasize the volatility increases, measured by the VIX index, which has reached its highest level of the last three months.


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ECB’s Praet: TLTRO will break the lack of credit’s vicious circle

MADRID | The Corner | Upcoming TLTRO in Sept 18 and Dec 11 will allow EZ banks to borrow an amount equivalent to 7% of what they currently lend to the private sector at 0.25% a year (excluding interbank loans and mortgages), breaking the vicious circle of high lending rates to companies, high credit risk and a sluggish economic performance, European Central Bank’s chief economist Peter Praet said on Wednesday. 


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Stimulus desync

MADRID | The Corner | While the US Federal Reserve may wind back its asset purchases by a further $US10 billion at the end of July, the ECB is ready to launch the first two TLTROs on 18 September and 11 December 2014, with settlement six days later. 

 

 


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China: Banks start using new loan-to-deposit ratio

BEIJING | By Huo Kan and Wu Hongyuran via Caixin | Starting July 1 banks in China are using a new method of calculating the loan-to-deposit ratio, a change that the regulator and analysts say will allow for more loans to be extended.  The China Banking Regulatory Commission (CBRC) announced on June 30 the new set of rules for figuring the ratio, which is capped by law at 75 percent, meaning that banks cannot lend out more than three-quarters of the deposits they accept.


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Biggest EU banks show poorest Q1 results in 5 years

MADRID | The Corner | The first quarter of the year is usually the best for lenders, and yet major European entities are showing the weakest results since Q1 2009:  net profit fell once more (-9% yoy) to a pale EUR 12, according to a report by Deutsche Bank Research. Potentially high litigation costs and the upcoming ARQ and ECB’s stress tests make them eager to strengthen their capital buffers.