March 07, 2025 14:09 GMT
FINANCIALS: Financials - Week in Review - 07032025
FINANCIALS
- Financials - like much of the credit market - was mostly a passenger in a week where sharply higher government bond yields drove pricing
M&A Headlines
- Swedbank and Sparebank1 announced the creation of a Nordic investment bank.
- Credit Agricole and Unicaja are also in talks to create a joint consumer finance unit.
- BBVA reportedly received good news as the core of their disposal plan in the event of a merger with Sabadell was preferred by Spain's competition commission.
- In preparation for their AGM, UniCredit disclosed an estimated €900m of synergies if it could merge with Banco BPM, following an initial cost estimate of €2bn.
Other Headlines
- Close Brothers completed their sale of their asset management arm - which should boost CET1 by 120bps.
- The Bank of England is considering increasing the deposit amount required to qualify for enhanced leverage requirements from £50bn to £70bn in line with nominal GDP. We think this would benefit primarily Coventry and Yorkshire building societies
- Donald Trump took aim at Canada by claiming it doesn’t allow US bank to operate their, causing some jitters for Canadian banks.
Insurers
- UK insurers Bupa, Direct Line, Admiral and Just group reported. Direct Line was arguably the standout performer ahead of its acquisition by Aviva. But generally, performance was positive.
- SCOR produced a solid Q4, with its life insurance assumption review now firmly in the rear view mirror a good 2025 result could help it narrow spreads to closer to that implied by their ratings - https://mni.marketnews.com/3F6RNqW
Banks
- Novo Banco solid results see it making progress towards converting its positive outlook at Moody's and tier 2 bonds reaching IG. - https://mni.marketnews.com/4bw6Pmd
- BAWAG's good revenue outcome and provision wire back helped net income beat estimates
- AIB and Permanent TSB round out Ireland's bank reporting. We saw both as small credit positives with outlooks implying improved RoTE. Irish banks outperformed this quarter following positive outlooks from Fitch and Moody's https://mni.marketnews.com/4bw6UGx
Other
- UK 'other' financials posted positive results. Good news from Aberdeen was largely pre-released in January. Schroders beat expectations but still reported net outflows. Quilters reported solid results and flows.
- The Marex Group posted another set of excellent results, based revenue growth from all divisions. https://mni.marketnews.com/3XvkjsA
New Issues
- A quieter week for new issues. NN Group issued an RT1, it drew healthy demand despite a relatively ambitious IPT. It managed to tighten 25bps from IPT to reach our FV 5.75%
- RBC, NABC, BofA, and Sabadell all issued sr non-prefs
- We reviewed AT1 & RT1 new issue performance from February - https://mni.marketnews.com/43vnrsn
Ratings Changes
- Cajamar was upgraded by Fitch, on the back of Abanca and Unicaja Banco being upgraded the previous week. https://mni.marketnews.com/43pHlFa
- MAPFRE received a positive outlook from Fitch - which looks a foregone conclusion should they perform in line with management expectations in 2025.
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