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Adani loses Asia’s richest crown as stock rout deepens to $84 billion

BENGALURU, Feb 1 (Reuters) – Shares in Indian tycoon Gautam Adani’s conglomerate plunged again on Wednesday as a rout in his companies deepened to $84 billion in the wake of a U.S. short-seller report, with the billionaire also losing his title as Asia’s richest person.

Wednesday’s stock losses saw Adani slip to 15th on Forbes rich list with an estimated net worth of $76.8 billion, below rival Mukesh Ambani, the chairman of Reliance Industries Ltd (RELI.NS) who ranks ninth with a net worth of $83.6 billion.

Before the critical report by U.S. short-seller Hindenburg, Adani had ranked third.

The losses mark a dramatic setback for Adani, the school-dropout-turned-billionaire whose business interests stretch from ports and airports to mining and cement. Now, the tycoon is fighting to stabilise his businesses and defend his reputation.

It comes just a day after the group managed to muster support from investors for a $2.5 billion share sale for flagship firm Adani Enterprises on Tuesday, in what some saw as a stamp of investor confidence.

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The report by Hindenburg Research last week alleged improper use by the Adani Group of offshore tax havens and stock manipulation. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian law. It has always made the necessary regulatory disclosures, it added.

Shares in Adani Enterprises (ADEL.NS), often described as the incubator of Adani businesses, plunged 30% on Wednesday. Adani Power (ADAN.NS) fell 5%, while Adani Total Gas (ADAG.NS) slumped 10%, down by its daily price limit.

Adani Transmission (ADAI.NS) was down 6% and Adani Ports and Special Economic Zone (APSE.NS) dropped 20%.

Adani Total Gas, a joint venture with France’s Total (TTEF.PA), has been the biggest casualty of the short seller report, losing about $27 billion.

“There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report,” said Ambareesh Baliga, a Mumbai-based independent market analyst.

“With the stocks down despite Adani’s rebuttal, it clearly shows some damage on investor sentiment. It will take a while to stabilise,” Baliga added.

Reuters Graphics

SCRUTINY

Underscoring the nervousness in some quarters, Bloomberg reported on Wednesday that Credit Suisse (CSGN.S) had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.

Deven Choksey, managing director of KRChoksey Shares and Securities, said this was a big factor in Wednesday’s share slides.

Credit Suisse had no immediate comment.

Scrutiny of the conglomerate is stepping up, with an Australian regulator saying on Wednesday it would review Hindenburg’s allegations to see if further enquiries were warranted.

Data also showed that foreign investors sold a net $1.5 billion worth of Indian equities after the Hindenburg report – the biggest outflow over four consecutive days since Sept. 30.

Headaches for the Adani Group are expected to continue for some time.

India’s markets regulator, which has been looking into deals by the conglomerate, has said it will add Hindenburg’s report to its own preliminary investigation.

State-run Life Insurance Corporation (LIC) (LIFI.NS)said on Monday it would seek clarifications from Adani’s management on the short seller report. The insurance giant was, however, a key investor in the Adani Enterprises share sale.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group.

Reporting by Chris Thomas in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs and Mark Potter

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Insurers shun FTX-linked crypto firms as contagion risk mounts

Dec 19 (Reuters) – Insurers are denying or limiting coverage to clients with exposure to bankrupt crypto exchange FTX, leaving digital currency traders and exchanges uninsured for any losses from hacks, theft or lawsuits, several market participants said.

Insurers were already reluctant to underwrite asset and directors and officers (D&O) protection policies for crypto companies because of scant market regulation and the volatile prices of Bitcoin and other cryptocurrencies.

Now, the collapse of FTX last month has amplified concerns.

Specialists in the Lloyd’s of London (SOLYD.UL) and Bermuda insurance markets are requiring more transparency from crypto companies about their exposure to FTX. The insurers are also proposing broad policy exclusions for any claims arising from the company’s collapse.

Kyle Nichols, president of broker Hugh Wood Canada Ltd, said insurers were requiring clients to fill out a questionnaire asking whether they invested in FTX, or had assets on the exchange.

Lloyd’s of London broker Superscript is giving clients that dealt with FTX a mandatory questionnaire to outline the percentage of their exposure, said Ben Davis, lead for digital assets at Superscript.

“Let’s say the client has 40% of their total assets at FTX that they can’t access, that is either going to be a decline or we’re going to put on an exclusion that limits cover for any claims arising out of their funds held on FTX,” he said.

The exclusions denying payout for any claims arising out of the FTX bankruptcy are found in insurance policies that cover the protection of digital assets and for personal liabilities of directors and officers of companies that deal in crypto, five insurance sources told Reuters. A couple of insurers have been pushing for a broad exclusion to policies for anything related to FTX, a broker said.

Exclusions may act as a failsafe for insurers, and will make it even more difficult for companies that are seeking coverage, insurers and brokers said.

Bermuda-based crypto insurer Relm, which previously has provided coverage to entities linked to FTX, takes an even stricter approach.

“If we have to include a crypto exclusion or a regulatory exclusion, we’re just not going to offer the coverage,” said Relm co-founder Joe Ziolkowski.

D&O QUESTION

Now, one of the most pressing questions is whether insurers will cover D&O policies at other companies that had dealings with FTX, given the problems facing exchange’s leadership, Ziolkowski said.

U.S. prosecutors say former FTX Chief Executive Officer Sam Bankman-Fried engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.

A lawyer for Bankman-Fried said on Tuesday his client is considering all of his legal options.

D&O policies, which are used to pay legal costs, do not always pay out in cases of fraud.

Insurance sources would not name their clients or potential clients that could be affected by policy changes, citing confidentiality. Crypto firms with financial exposure to FTX include Binance, a crypto exchange, and Genesis, a crypto lender, neither of which responded to e-mails seeking comment.

While the least risky parts of the crypto market, such as companies that own cold wallets storing assets on platforms not connected to the internet, may get cover for up to $1 billion, a D&O insurance policyholder’s cover may now be limited to tens of millions of dollars for the rest of the market, Ziolkowski said.

The FTX collapse will also likely lead to a rise in insurance rates, especially in the U.S. D&O market, insurers said. The rates are already high because of the perceived risks and lack of historical data on cryptocurrency insurance losses.

A typical crime bond — used to protect against losses resulting from a criminal act — would cost $30,000 to $40,000 per $1 million of coverage for a digital assets trader. That compares with a cost of about $5,000 per $1 million for a traditional securities trader, Hugh Wood Canada’s Nichols said.

Reporting by Noor Zainab Hussain in Bengaluru and Carolyn Cohn in London; Editing by Lananh Nguyen and Anna Driver

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Five Chinese state-owned companies to delist from NYSE

SHANGHAI/HONG KONG, Aug 12 (Reuters) – Five Chinese state-owned firms including China Life Insurance (601628.SS) and oil giant Sinopec (600028.SS) said Friday they would delist from the New York Stock Exchange, amid heightened diplomatic and economic tensions with the United States.

The companies, which also include Aluminium Corporation of China (Chalco) (601600.SS), PetroChina (601857.SS) and Sinopec Shanghai Petrochemical Co (600688.SS), said in separate statements that they would apply for delistings of their American Depository Shares from later this month.

The five, which were added to the Holding Foreign Companies Accountable Act (HFCAA) list in May after they were identified as not meeting U.S regulators’ auditing standards, will keep their listings in Hong Kong and mainland Chinese markets.

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There was no mention of the auditing row in separate statements by the Chinese companies outlining their moves, which come amid heightened tensions after last week’s visit to Taiwan by U.S. House of Representatives Speaker Nancy Pelosi.

Beijing and Washington have been in talks to resolve a long-running dispute that could mean Chinese firms being kicked off U.S. exchanges if they do not comply with U.S. audit rules.

“These companies have strictly complied with the rules and regulatory requirements of the U.S. capital market since their listing in the U.S. and made the delisting choice for their own business considerations,” the China Securities Regulatory Commission (CSRC) said in a statement.

Some of China’s largest companies including Alibaba Group Holdings , J.D Com Inc and Baidu Inc are among almost 270 on the list and at threat of being delisted.

Alibaba said last week it would convert its Hong Kong secondary listing into a dual primary listing which analysts indicated could ease the way for the Chinese ecommerce giant to switch primary listing venues in the future. read more

In premarket trade Friday, U.S.-listed shares of China Life Insurance and oil giant Sinopec fell 5.7% about 4.3% respectively. Aluminium Corporation of China dropped 1.7%, while PetroChina shed 4.3%. Sinopec Shanghai Petrochemical Co shed 4.1%.

“China is sending a message that its patience is wearing thin in the audit talks,” said Kai Zhan, senior counsel at Chinese law firm Yuanda, who specialises in areas including U.S. capital markets and U.S. sanction compliance.

Washington has long demanded complete access to the books of U.S.-listed Chinese companies, but Beijing bars foreign inspection of audit documents from local accounting firms, citing national security concerns.

The companies said their U.S. traded share volume was small compared with those on their other major listing venues.

PetroChina said it had never raised follow-on capital from its U.S listing and its Hong Kong and Shangai bases “can satisfy the company’s fundraising requirements” as well as providing “better protection of the interests of the investors.”

China Life and Chalco said they would file for delisting on Aug. 22, with it taking effect 10 days later. Sinopec and PetroChina said their applications would be made on Aug. 29.

China Telecom (0728.HK), China Mobile (0941.HK) and China Unicom (0762.HK) were delisted from the United States in 2021 after a Trump-era decision to restrict investment in Chinese technology firms. That ruling has been left unchanged by the Biden administration amid continuing tensions.

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Reporting by Samuel Shen in Shanghai, Scott Murdoch in Hong Kong and Medha Singh in Bengaluru; Editing by Hugh Lawson, David Goodman and Alexander Smith

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HSBC hangs up on Ping An break-up call, lifts payout and profit goal

  • HSBC to revert to paying quarterly dividends from 2023
  • Aims to win over investors with higher profitability target
  • Says demerger of Asian business has huge risks
  • London shares rise 6%

LONDON/SINGAPORE, Aug 1 (Reuters) – HSBC (HSBA.L) pushed back on a proposal by top shareholder Ping An Insurance Group Co of China (601318.SS) to split the lender, a move Europe’s biggest bank said would be costly, while posting profits that beat expectations and promising chunkier dividends.

London-headquartered HSBC’s comments on Monday represent its most direct defence yet since news of Ping An’s proposal for carving out the lender’s Asian operations broke in April. It comes ahead of HSBC’s meeting with shareholders in Hong Kong on Tuesday where the Chinese insurer’s proposal will be discussed.

And in moves that pleased investors, HSBC raised its target for return on tangible equity, a key performance metric, to at least 12% from next year versus a 10% minimum flagged earlier. It also vowed to revert to paying quarterly dividends from early 2023.

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HSBC’s shares rose 6% in early London trade on Monday, the highest since end-June.

“We have sympathy for Ping An and all our shareholders that our performance has not been where it needed to be for the last 10 years,” Chief Executive Noel Quinn, who has run the bank for more than two years, told analysts.

Asia is HSBC’s biggest profit centre, with the region’s share of the lender’s profit rising to 69% in the first half from 64% a year ago.

Without directly referencing Ping An by name in its earnings presentation earlier on Monday, HSBC said a break-up would mean a potential long-term hit to the bank’s credit rating, tax bill and operating costs, and bring immediate risks in executing any spinoff or merger.

“There would be a significant execution risk over a three to five year period when clients, employees and shareholders would all be distracted,” Quinn said on the call, regarding the break-up proposal.

Some investors in Hong Kong, HSBC’s biggest market, have come out in support of Ping An’s proposal. They have been upset after the lender cancelled its payout in 2020. read more

Quinn said HSBC would aim to restore its dividend to pre-COVID-19 levels as soon as possible.

Discussions with Ping An had been around purely commercial issues, the CEO said, in response to a question from a reporter about whether politics was influencing the Chinese investor’s call for the bank to break up.

HSBC has shared the findings of a review by external advisers into the validity of its strategy with its board, but will not publish them externally, Quinn told Reuters.

He said HSBC had published detailed information on its international connectivity and revenue for all its shareholders to understand the value of the franchise and its strategies.

Ping An, which has not confirmed or commented publicly on the break-up proposal, owns around 8.3% of HSBC’s equity. A Ping An spokesperson declined to comment on HSBC’s results and its strategy.

EARNINGS BEAT

Last week, Europe’s lenders offered some positive surprises on profits. read more

Dual-listed HSBC followed in their footsteps, posting a pretax profit of $9.2 billion for the six months ended June 30, down from $10.84 billion a year ago but beating the $8.15 billion average estimate of analysts compiled by the bank.

Quinn, under whose leadership HSBC has ploughed billions into Asia to drive growth, said the upgraded profitability guidance represented the bank’s best returns in a decade and validated its international strategy.

Instead of the break-up, HSBC will focus on accelerating the restructuring of its U.S. and European businesses, and will rely on its global network to drive profits, the lender said.

Analysts at Citi said the new guidance implied earnings upside for HSBC. “The beat this quarter could result in high single digit consolidated profit before tax upgrades,” they said in a report. https://bit.ly/3BwBEXV

HSBC is paying an interim dividend of 9 U.S. cents per share. It also said stock buybacks remain unlikely this year.

It reported a $1.1 billion charge for expected credit losses, as heightened economic uncertainty and rising inflation put more of its borrowers into difficulties.

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Reporting by Anshuman Daga and Lawrence White; Editing by Muralikumar Anantharaman

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Justin Lin’s ‘Fast X’ Exit: Universal in Costly Race to Replace Him

On April 22, Vin Diesel posted a 19-second video to Instagram recapping the first week of production on “Fast X,” the latest entry in Universal’s 21-year-old franchise. In the clip, Diesel sidles up to Justin Lin to ask the film’s director and co-writer how he’s feeling at the end of the first week of production.

As Diesel grins into his selfie camera, Lin, seated and seemingly uncomfortable, nods his head as he tries to find the right words.

“It feels like the beginning of, uh, of an epic ending,” Lin says flatly.

On the surface, Lin was referencing the planned back-to-back filming of the action franchise’s 10th and 11th installments, which are purportedly meant to conclude the saga of Diesel’s Dominic Toretto and his “Fast” family.

Instead, Lin, who has helmed five of the franchise’s ten installments, was perhaps accidentally foretelling the end of his time at the wheel of “Fast X.” Just four days later, the 50-year-old filmmaker announced that he would no longer direct the movie.

“With the support of Universal, I have made the difficult decision to step back as director of ‘Fast X’, while remaining with the project as a producer,” Lin said in a statement posted to the movie’s official social media handle.

The news came as a massive shock to fans, who have come to see Lin as one of the primary architects of the series’ approach to heart, humor and vehicular carnage since he boarded the project with 2006’s “The Fast and Furious: Tokyo Drift.” He’s since helmed some of the most critically acclaimed installments, including 2011’s “Fast Five,” and took the films’ stunts to new — and quite literally out of this world — heights with his 2021 return “F9: The Fast Saga.”

Lin’s exit was reportedly “amicable” and chalked up to “creative differences.” But leaving a multi-million franchise days into production has put Universal in the rare and unenviable position of finding a replacement in time to make their planned May 19, 2023 theatrical release date.

Representatives for Universal did not immediately respond to requests for comment.

The biggest challenge facing the production is time. Sources tell Variety that the second unit will continue production in the U.K., while the main unit is paused until a replacement director is hired. Until then, the production is burning through cash to keep key crew and cast members in limbo. Sources from different studios with experience replacing directors midstream estimated that it could be costing Universal upwards of $600,000 to $1 million a day. Much of the cost depends on whether production on any major set-pieces were already underway — the bigger the action beats, the more pricey the delay — which suggests that Lin made his decision to vacate the director’s chair so early into the shoot to avoid even bigger cost overruns further down the production calendar.

There’s also the matter of the franchise’s newest stars, Jason Momoa and Brie Larson, as well as Charlize Theron, who’s returning for a third appearance as the villain Cipher. All three are dedicated to ongoing franchises that require their time and attention, so delays could necessitate some hasty, and costly, changes to accommodate their busy schedules.

Observers have noted that Lin’s announcement was made on the “Fast and Furious” social media channels, rather than by Lin’s reps or on his personal social media — and it was formatted in the franchise’s official font. Given the formality involved, it’s likely that Universal had some advance notice of his decision, and therefore more time to begin seeking a replacement.

The most logical answer to replace him would be to slot someone in who’s already familiar with the franchise’s mechanics. The problem is that, other than Lin, only five directors have helmed a “Fast and Furious” movie: Rob Cohen (2001’s “The Fast and the Furious”), the late John Singleton (2003’s “2 Fast 2 Furious”), James Wan (2015’s “Furious 7”), F. Gary Gray (2017’s “The Fate of the Furious”) and David Leitch (2019’s “Fast & Furious Presents: Hobbs and Shaw”).

Wan, Gray and Leitch would all be viable options — if they weren’t busy. About an hour after the news broke that Lin was stepping down as director, Wan was onstage at CinemaCon Las Vegas sharing a sneak preview of Warner Bros.’ “Aquaman and the Lost Kingdom,” which is still in post-production and set for a March 2023 release. That film has elaborate special effects, making it nearly impossible that Wan could turn his attention elsewhere. Gray is currently filming Netflix’s “Lyft,” starring Kevin Hart, and Leitch is set to start production on Universal’s “Fall Guy” with Ryan Gosling imminently.

Meanwhile, Cohen hasn’t directed a film since 2018, shortly before becoming embroiled in personal controversy with multiple allegations of sexual assault. (Representatives for Cohen have denied these claims).

A rival studio executive speculated that Universal could look for a skilled second-unit director, particularly one well-versed in big-budget action movies, to come on board to oversee the sequel. An A-list filmmaker might not be willing to join the series without demanding changes to the script or additional time to find their way into the story.

Beyond that, it’s well known that Diesel, the “Fast and Furious” OG, is the real driver of the franchise. He’s also a producer on the film and has not been shy about publicly expressing his displeasure with creative decisions made by others. On April 20, Diesel posted that the first draft of the “Fast X” screenplay, presumably written by Lin and co-writer Dan Mazeau, did not include Jordana Brewster’s character Mia, who, as fans know, is also Dom’s sister. “I was so disappointed that I couldn’t see how I could continue,” Diesel wrote. The actor got his way and Brewster ended up joining the film.

There were other speed bumps on the way to production for “Fast X,” including Diesel’s feud with Dwayne Johnson, who joined the crew with “Fast Five,” and then famously refused to share the set with him for “Fate.” When Diesel made a public overture to Johnson about returning for the new film, Johnson — just as publicly — shut it down.

“I told [Diesel] directly that I would not be returning to the franchise,” Johnson said in a CNN interview. “I was firm yet cordial with my words and said that I would always be supportive of the cast and always root for the franchise to be successful, but that there was no chance I would return.”

Diesel also attempted to recruit Rita Moreno to the movie’s cast as Dom’s abuela, but scheduling kept the EGOT-winner from making an appearance. “I said, ‘I’ll take a rain check,’ and we’ve become friends,” Moreno told Variety in March.

Despite his influence, however, the chances that Diesel would end up getting the director gig do not seem high. Although he did helm the 2009 short film “Los Bandoleros” — a prequel to Dom’s return to the franchise in 2009’s “Fast and Furious” after sitting out the second and third installments — Diesel has only directed a single feature, 1997’s “Strays.” Universal will almost surely need a more experienced hand to take over such a giant production that is already underway.

Certainly, the actor’s ambitions for “Fast X” are clear. In his video with Lin, he asks the filmmaker, “Is it fair to say that this will be the best one?”

Lin shrugs. “In my heart, yes.”



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Allianz, Swiss Re join other financial firms in turning from Russia

  • Allianz says stopped insuring new business in Russia
  • Swiss Re says not renewing business with Russian clients
  • Europe’s securities regulator says ensuring orderly markets
  • Deutsche changes position late on Friday
  • FTSE Russell ejects four UK-listed, Russia-focused stocks

FRANKFURT/LONDON/ZURICH, March 14 (Reuters) – Allianz (ALVG.DE) and Swiss Re (SRENH.S) said on Monday they were cutting back on Russian business as European financial institutions turn their backs on Russia.

The German insurer and Swiss reinsurer join banks Deutsche (DBKGn.DE), Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N) which have exited Russia following its Feb. 24 invasion of Ukraine and subsequent Western government sanctions.

The moves will pile pressure on others to follow.

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Allianz said it had put a stop to insuring new business in Russia and was no longer investing in Russia for its own portfolio. read more

Swiss Re said it was not taking on new business with Russian and Belarusian clients and was not renewing existing business with Russian clients. In a statement sent via email, Swiss Re said it was reviewing its current business relationships in Russia and Belarus. read more

The decisions follow similar action by other major European insurers and reinsurers, which provide cover for large projects such as energy installations.

Insurer Zurich (ZURN.S) no longer takes on new domestic customers in Russia and will not renew existing local business, a spokesperson told Reuters on Monday.

Hannover Re (HNRGn.DE) said last week that new business and renewals for customers in Russia and Belarus were on hold, while Italian insurer Generali (GASI.MI) said earlier this month it would pull out of Russia. read more

Insurance broker Willis Towers Watson (WTY.F) also said on Sunday it would withdraw from Russia, following similar moves by rivals Marsh (MMC.N) and Aon (AON.N).

Asset managers have said they will not make new investments in Russia and many Russian-focused funds have frozen because they are unable to trade following the sanctions and counter-measures taken by Russia. read more

The European Union’s markets watchdog ESMA said on Monday it was coordinating the bloc’s regulatory response to the Ukraine conflict to ensure markets continued to function in an orderly manner.

Britain’s pensions regulator said the sector had little direct exposure to Russia, but that there were practical difficulties in selling Russian assets. read more

Ukraine said on Monday it had begun “hard” talks with Russia on a ceasefire, immediate withdrawal of troops and security guarantees after both sides reported rare progress in negotiations at the weekend, despite Russian bombardments. read more

Russia calls its actions in Ukraine a “special operation”.

WINDING DOWN

Deutsche, which had faced stinging criticism from some investors and politicians for its ongoing ties to Russia, announced late on Friday that it would wind down its business there. read more

It was a surprise reversal by the Frankfurt-based lender, which had previously argued that it needed to support multinational firms doing business in Russia.

Britain’s London Stock Exchange Group also said late on Friday it was suspending all products and services for all customers in Russia, days after suspending the distribution of news and commentary in the country following new laws in Moscow. read more

Index provider FTSE Russell said on Monday it would delete four UK-listed, Russia-focused companies including Roman Abramovich’s Evraz (EVRE.L) after many brokers refused to trade their shares.

Evraz, along with Polymetal International (POLYP.L), Petropavlovsk (POG.L) and Raven Property Group (RAV.L), would be deleted from all FTSE’s indexes during the March review, it said in a statement.

FTSE Russell said it had received feedback from its External Advisory Committees and market participants that trading in the shares was “severely restricted” as brokers refused to handle the securities, hitting market liquidity. read more

JPMorgan says the majority of forecast risk for European banks from the Russia shock will come from commodity and economic spillover effects, with the sector plunging since the end of February.

European banking stocks (.SX7P) have come off their lows in recent days, however, and rose 3.8% on Monday.

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Additional reporting by Marc Jones, Iain Withers and Joao Manuel Mauricio, Writing by Carolyn Cohn, Editing by Catherine Evans

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European bank shares halt slide, Russia’s Sberbank exits Europe

FRANKFURT/LONDON, March 2 (Reuters) – European bank shares halted their slide on Wednesday after dropping to their lowest level in nearly 11-months on fallout from the Ukraine crisis, which has forced the European arm of Russia’s Sberbank (SBER.MM) to close.

Russia has shown no intention of stopping its Ukraine attack, which has triggered heavy sanctions against Moscow and led to an exodus of big companies from the Russian market. read more

U.S. President Joe Biden has warned Vladimir Putin that the Russian leader “has no idea what’s coming”. Russia calls its Ukraine actions a “special operation”. read more

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The European arm of Sberbank, Russia’s biggest lender, has been closed by order of the European Central Bank. read more

Regulators are also preparing for a possible closure of the European arm of Russia’s second-largest bank, VTB Bank (VTBR.MM), amid growing concerns about the impact of sanctions, Reuters reported on Wednesday. read more .

Sberbank, which reported record profits in 2021, said it was leaving the European market as its subsidiaries there faced large cash outflows and threats to the safety of employees and property. read more

Sberbank operated in Austria, Croatia, Germany and Hungary, among other countries, and had European assets worth 13 billion euros ($14.41 billion) on Dec. 31, 2020.

Sberbank’s depository receipts in London have plunged 99.9% so far in 2022. “All sellers no buyers,” said one London trader on Wednesday.

The impact of the crisis and the sanctions are expected to have repercussions for European banks.

“Large western European banks’ asset quality will be pressured by the fallout from Russia’s invasion of Ukraine,” the credit rating agency Fitch said on Wednesday.

“The banks also face materially increased operational risk,” it added.

An index of leading European bank stocks (.SX7P) was up 0.1%by midday Wednesday, erasing early losses that came on top of a 5.6% drop on Tuesday and 4.5% on Monday. Earlier on Wednesday, the index hit its lowest level since April 2021, down 27% from last month’s highs.

Austria’s Raiffeisen Bank International (RBIV.VI), which has operated in Russia since the collapse of the Soviet Union thirty years ago, has been one of the biggest fallers so far this week.

The bank is looking into leaving Russia, two people with knowledge of the matter told Reuters, a move that would make it the first European bank to do so since Moscow’s Ukraine invasion. read more

Raiffeisen shares, which are half the value of a month ago, were down 4.7%.

Some finance officials are trying to reassure markets.

The capital position of Hungary’s OTP Bank , central Europe’s largest independent lender, is excellent and the bank can withstand further possible market shocks in Russia and Ukraine, Hungary’s central bank said in an emailed reply to Reuters. read more

SHEDDING ASSETS

Germany’s market regulator BaFin is closely monitoring the European arm of Russia’s VTB Bank (VTBR.MM), which was no longer accepting new clients. The bank, headquartered in Frankfurt, had 8.1 billion euros of assets at the end of 2020.

On Tuesday, Russia said it was placing temporary restrictions on foreigners seeking to exit Russia assets, as it tried to stem an investor retreat driven by crippling Western sanctions.

But investors are continuing to shed assets. Aviva’s (AV.L) fund management business will divest its small exposure to Russia “as soon as we practically can,” chief executive Amanda Blanc said on Wednesday.

Financial companies are scrambling to keep up with the situation.

Dubai’s Mashreqbank (MASB.DU) has stopped lending to Russian banks and is reviewing its existing exposure to the country, two sources familiar with the matter told Reuters. read more

The move is one of the first reported instances of a bank in the Middle East halting ties to Russia and underscores growing global nervousness about falling foul of Western sanctions.

France’s BNP Paribas (BNPP.PA) said it was working to maintain its activities as much as possible at its Ukraine arm Ukrsibbank, which has close to 5,000 employees.

A task force at Germany’s Commerzbank, which has a subsidiary in Russia, is meeting multiple times a day, a board member has said.

Aki Hussain, CEO of Hiscox (HSX.L), said the Lloyd’s of London insurer provided cover for international businesses in Ukraine.

“We insure those offices and some of the people there and we’ve been working closely with our clients for the last eight weeks and effectively – to the extent they want – we’ve been helping them leave the country and evacuate their staff.”

($1 = 0.9022 euros)

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Additional reporting by Gergely Szakacs, Zuzanna Szymanska, Saeed Azhar and Yousef Saba
Editing by Paul Carrel, Tomasz Janowski and Jane Merriman

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In South Africa Omicron wave, Pfizer vaccine less effective against hospitalisation – study

  • 2 doses of Pfizer shot provide 70% protection against hospitalisation – study
  • Findings are some of the earliest outside of lab studies
  • Data preliminary, but encouraging – scientist

JOHANNESBURG, Dec 14 (Reuters) – Two doses of Pfizer-BioNTech’s COVID-19 vaccine appear to have given 70% protection against hospitalisation in South Africa in recent weeks, according to a major real-world study which suggests weaker efficacy against the new Omicron variant.

The study released on Tuesday by South Africa’s largest private health insurance administrator, Discovery Health, was based on more than 211,000 positive COVID-19 test results. Around 78,000 of those results from Nov. 15 to Dec. 7 were attributed to Omicron.

The 78,000 results are not confirmed Omicron cases, meaning the study cannot offer conclusive findings about the variant labelled “of concern” by the World Health Organization and reported in more than 60 countries.

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South African scientists have so far confirmed around 550 positive tests as being Omicron, with the variant accounting for 78% of sequences from November, more than the previously dominant Delta variant.

South Africa alerted the world to Omicron late last month, triggering alarm that it could cause another surge in global infections, and leading to the imposition of travel restrictions on southern Africa. South Africa’s daily infections have since risen to around 20,000 in recent days.

The findings from a real-world analysis are some of the earliest on protection against Omicron outside of lab studies, which have shown reduced neutralising activity against the variant. read more

Based on analysis by Discovery’s (DSYJ.J) clinical research and actuarial teams, and in collaboration with the South African Medical Research Council (SAMRC), the study calculated that two doses of Pfizer-BioNTech offered 70% protection against hospitalisation compared with the unvaccinated during the recent surge in cases and 33% protection against infection.

It said this represents a drop from 80% protection against infection and compares with 93% efficacy against hospital admission during South Africa’s outbreak of the Delta variant, which is the globally dominant variant and considered to be the most infectious to emerge during the pandemic.

Discovery cautioned that the study’s findings should be considered preliminary.

Glenda Gray, SAMRC president, said it was however encouraging that the Pfizer-BioNTech (PFE.N), (22UAy.DE) vaccine appeared to be offering good protection against severe disease and hospitalisation.

South Africa is using the Pfizer-BioNTech and Johnson & Johnson (JNJ.N) vaccines in its COVID-19 immunisation campaign, with more than 20 million Pfizer doses administered so far.

J&J and the SAMRC are conducting a large real-world study of J&J’s vaccine, and recent analysis has shown no deaths from Omicron, Gray said.

“So that’s the good news, it shows again that the vaccine is effective against severe disease and death,” she said.

EARLY DATA

With 70% or more of the South African population estimated to have been exposed to COVID-19 over the past 18 months, high estimated levels of antibodies in the population might be skewing the data.

“This could be a confounding factor for these hospital admission and severity indicators during this Omicron wave,” Ryan Noach, chief executive of Discovery Health, said in a briefing on the study.

The analysis also shows protection against hospital admission is maintained across all ages, in people from 18 to 79 years, with slightly lower levels of protection for the elderly, it said.

Protection against admission is also consistent across a range of chronic illnesses including diabetes, hypertension, hypercholesterolemia, and other cardiovascular diseases.

It concluded that there was a higher risk of reinfection during the fourth wave than during previous waves and that the risk of hospitalisation among adults diagnosed with COVID-19 was 29% lower than during the country’s first wave early last year.

Children appeared to have a 20% higher risk of hospital admission with complications during the fourth wave than during the first, despite a very low absolute incidence, it said.

“This is early data and requires careful follow up,” said Shirley Collie, chief health analytics actuary at Discovery Health.

However, this trend aligns with a warning a recent days from South Africa’s National Institute for Communicable Diseases (NICD) that during the country’s third wave from June to September they had seen an increase in paediatric admissions and now, in the fourth wave, they are seeing a similar increase in admissions for children under five, she said.

South African scientists have said they cannot confirm a link between Omicron and the high admissions of infants, which could be due to other factors.

Considerable uncertainties surround Omicron, first detected last month in southern Africa and Hong Kong, whose mutations may lead to higher transmissibility and more cases of COVID-19 disease.

The WHO has said there were early signs that vaccinated and previously infected people would not build enough antibodies to ward off an Omicron infection, resulting in high transmission rates.

It is unclear whether Omicron is inherently more contagious than the globally dominant Delta variant, the WHO said.

Pfizer and BioNTech said last week that two shots of their vaccine may still protect against severe disease, because its mutations were unlikely to evade the T-cells’ response. read more

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Reporting by Alexander Winning and Wendell Roelf;
Writing by Josephine Mason in London;
Editing by Giles Elgood

Our Standards: The Thomson Reuters Trust Principles.

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No stranger to turmoil, Dutch dealmaker Wynaendts set for Deutsche chair

The headquarters of Germany’s Deutsche Bank are pictured in Frankfurt, Germany, September 21, 2020. REUTERS/Ralph Orlowski/File Photo

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  • Alexander Wynaendts oversaw bailout and deals as Aegon CEO
  • Takes helm at crucial time for Germany’s largest lender
  • Wynaendts a true European with global network, CEO says in memo
  • Deutsche Bank poaches chief risk officer from Natixis

FRANKFURT, Nov 21 (Reuters) – As head of Dutch insurer Aegon, Alexander Wynaendts led a complex European financial institution with staff around the world and a large U.S. presence during a turbulent decade, experience that should serve him well as the next chair of Germany’s Deutsche Bank (DBKGn.DE).

On Friday, a committee of Deutsche Bank’s supervisory board nominated Wynaendts to oversee Germany’s largest lender from next year. The full board backed him at a meeting on Sunday, and shareholders will vote on his appointment in May. read more

If elected, the position will catapult Wynaendts, who is relatively unknown in Germany, into a role as one of the country’s top bankers at a time when Deutsche is also steadying itself after a rocky decade with a view to a possible future merger.

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Deutsche Bank Chief Executive Officer, in a note to staff on Sunday dislosing the full board’s support for Wynaendts, called the Dutchman a true European and expert in international finance.

“Alex has experience in the fields that always made Deutsche Bank stand out: strong expertise in retail, corporate and capital markets business as well as in asset management – and a global network,” Sewing said in the memo, which was seen by Reuters.

Just months into his tenure at Aegon (AEGN.AS), a company that in the mid-19th century helped the Dutch pay for funerals, Wynaendts, 61, navigated a 3 billion euro ($3.39 billion) state bailout and restructuring as the 2008 financial crisis took its toll.

Deutsche has lost billions of euros and faced huge fines, leaving regulators fearing it was on the brink of collapse five years ago. Although it has started reaping small profits under new leadership, there remains plenty of unfinished business.

The bank is currently working on a new strategy plan to be presented in March and has yet to make good on a promise to shed 18,000 jobs, while analysts say it is at risk of missing a key profitability target next year.

A major question for the wider industry is the consolidation of Europe’s fragmented banks. Deutsche executives says they are working to make the lender strong for a potential future tie-up after it called off talks to merge with rival Commerzbank (CBKG.DE) in 2019.

Wynaendts – who oversaw a steady stream of acquisitions, disposals and partnerships from Canada to Mexico and Romania to China during a decade as the head of Aegon – is expected to embrace the strategy.

Aegon was involved in 87 M&A deals from 2012 through 2020, based on Refinitiv data.

He will also be well aware of the challenges of low interest rates and volatile markets, which hit Aegon’s capital position near the end of his time at the company. Aegon’s shares fell sharply during his tenure due to the financial crisis and the pandemic.

Reuters Graphics

Wynaendts would take over from Austrian Paul Achleitner, another former insurance executive who previously worked at Allianz (ALVG.DE), when he steps down in May. Achleitner is credited with installing current CEO Christian Sewing to help turn the bank around after a number of management reshuffles during his decade at the helm.

Separately, Deutsche announced on Sunday that it had filled the role of chief risk officer, poaching Olivier Vigneron from France’s Natixis. read more

($1 = 0.8859 euros)

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Reporting by Tom Sims and Frank Siebelt; Editing by Kirsten Donovan, Jane Merriman and David Evans

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Corporate America unloads on Biden’s newly active business watchdogs

WASHINGTON, Nov 19 (Reuters) – Corporate America mounted fresh attacks on Friday on President Joe Biden’s antitrust enforcers who have vowed to rein in anticompetitive practices and vigorously investigate corporate crime.

The Chamber of Commerce wrote three letters and filed more than 30 Freedom of Information Act requests about what it said were Federal Trade Commission failures to strictly follow rules and giving in to political interference.

The FTC defended itself, saying it would not change course despite criticism from the big business lobby group about a series of actions spearheaded by FTC Chair Lina Khan.

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Also Friday, Alphabet Inc’s Google (GOOGL.O) asked the U.S. Justice Department to consider requiring Jonathan Kanter, the newly confirmed head of the department’s Antitrust Division, to recuse himself from matters related to the search and advertising giant because of his work for a long list of Google critics.

Kanter had worked for such Google critics as Yelp, which the letter described as “vociferously advocating for an antitrust case against Google for years.”

The Justice Department filed an antitrust lawsuit against Google last year and is believed to be preparing a second focused on the company’s dominance of online advertising.

The Chamber of Commerce said it was particularly concerned about votes cast by Commissioner Rohit Chopra before he left the FTC but which were announced after his departure. He now heads the U.S. Consumer Financial Protection Bureau.

The chamber expressed concern about what it said was White House interference in FTC decision-making and the agency’s decision to use civil penalty authority.

The FTC said it would not change direction.

“The FTC just announced we are ramping up efforts to combat corporate crime and now the chamber declares ‘war’ on the agency. We are not going to back down because corporate lobbyists are making threats,” said FTC spokesman Peter Kaplan.

The agency has filed a lawsuit accusing Facebook of breaking antitrust law, tightened some merger reviews, been asked to probe high gasoline prices, and is considering a study to probe the role of competition in supply chain disruptions. read more

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Reporting by Diane Bartz; Editing by Edmund Blair and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

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