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☆ Credit Agricole strikes bancassurance deal with Italy's Banco BPM
▼ + stars: | 2022-12-23 | by ( ) www.reuters.com time to read: +1 min

The deal allows the provision of non-life insurance products and related services through BBPM's networks for a 20-year period. It also stipulates that the French bank's Credit Agricole Assurances (CAA) division will buy from Banco BPM 65% of the share capital of both Vera Assicurazioni and Banco BPM Assicurazioni. "We are very pleased that our long-standing strategic partnership with Banco BPM will soon be strengthened," Credit Agricole CEO Philippe Brassac said in a statement. Credit Agricole has a 9.18% stake in Banco BPM, Italy's third-largest bank behind Intesa Sanpaolo (ISP.MI) and UniCredit (CRDI.MI). Three weeks ago, Banco BPM picked Credit Agricole over a rival bid from French insurer AXA (AXAF.PA) to start exclusive talks over a non-life insurance partnership.

While the error margins are unlikely to distort euro inflation in the long-term, economists say they could warp inflation expectations if not addressed, at a time when the European Central Bank is raising rates aggressively to tame double-digit inflation. As falling energy prices will take time to be reflected in household contracts, the current methodology will underestimate inflation when energy prices fall, CBS said. More volatility could follow when Germany introduces a cap on energy prices in March, that will also cut costs for January and February retroactively, he said. Eurostat has said that only measures that have a direct impact on energy prices, known to consumers before they purchase the energy, should reflect in inflation calculations. FEEDTHROUGH RISKSWith inflation at 10%, the calculation issues are unlikely to significantly impact the aggregate euro zone inflation print.

☆ Analysis: Italy's rates clash with ECB a sign of things to come for euro zone
▼ + stars: | 2022-12-20 | by ( Francesco Canepa | ) www.reuters.com time to read: +4 min

Summary Euro zone governments offering cost-of-living subsidiesECB has warned it won't compensate for "policy errors"Clashes seen widening beyond ItalyFRANKFURT, Dec 20 (Reuters) - Attacks by Italy's new government on the European Central Bank over its plans to raise borrowing costs may be a sign of things to come for a euro zone struggling with inflation and debt. It also showed the ECB did not fear penalising the most indebted of the 19 euro zone countries, Italy among them, which tend to see their borrowing costs rise disproportionately when credit becomes more expensive. "The ECB is clearly ready to take risks with fragmentation in the euro area," Gilles Moec, chief economist at AXA Investment Managers, said. With bigger deficits to refinance and the ECB raising interest rates while also winding down its bond purchases, markets have pushed up yields across the euro zone and particularly for the weakest borrowers, such as Italy. But the ECB has been clear it won't be used to rescue countries that have made imprudent "policy errors".

☆ Analysis: Private debt markets face reality check as companies grapple with rising rates, recession
▼ + stars: | 2022-12-20 | by ( Chiara Elisei | ) www.reuters.com time to read: +5 min

An era of ultra-easy cash from central banks lured investors into private credit, attracted by juicy returns in the high-single to low-double-digits. The private debt market has expanded to $1.4 trillion, up from $250 billion in 2010, according to data provider Prequin, with funds including Ares, Blackstone (BX.N) and KKR (KKR.N) holding big positions. Corporate default risks are rising, making investors think twice about holding riskier private debt. A Private Credit Default Index by law firm Proskauer showed a default rate of 1.56% on U.S. dollar-denominated deals in the third quarter, the first notable increase over the past 18 months. "While the default rate is likely to go up, I wouldn't expect to see a significant spike in 2023," he added.

☆ CNBC Pro Talks: Fund manager Jeremy Gleeson on how to trade tech right now
▼ + stars: | 2022-12-20 | by ( Cnbc.Com Staff | ) www.cnbc.com time to read: +2 min

After a tough year for tech, the sector's stocks are "down but by no means out," according to CNBC Pro Talks ' next guest. Gleeson has more than 20 years of investing experience, with a focus on the tech sector. Watch the next Pro Talks on Wednesday, Dec. 21 at 12 p.m. GMT/ 8 p.m. Singapore Time / 7 a.m. EST. Gleeson has more than 20 years of investing experience, with a focus on the tech sector. Watch the next Pro Talks on Wednesday, Dec. 21 at 12 p.m. GMT/ 8 p.m. Singapore Time / 7 a.m. EST.

This could change after negotiators at the U.N. nature summit in Montreal secured long-awaited formal support on Monday for a Global Biodiversity Framework to protect nature. Just 907.6 million euros are invested in Morningstar’s top 10 equity funds with biodiversity in their name. "We know the global economy and every company in it is negatively impacting biodiversity," said Tom Atkinson, portfolio manager at AXA Investment Managers, which has a 117 million euro Article 9 biodiversity impact fund. "At the moment we can only assess the negative impact (on biodiversity) of the companies in our portfolio, this is why more biodiversity funds don't exist and why regulation is arguably dragging." Three of the six largest biodiversity-named funds assessed by Reuters are overweight industrials versus the MSCI ACWI Index (USD).

☆ The Fed has to portray itself as tough on inflation even as it pushes through a smaller rate hike
▼ + stars: | 2022-12-13 | by ( Patti Domm | In | ) www.cnbc.com time to read: +3 min

"The Fed has been saying for some time that it wants to slow the pace of tightening. The fed funds target rate range is currently 3.75% to 4%. "But then the press conference would cause a bit of a whipsaw if he sounds hawkish," she said. "I think the most interesting thing will be the press conference," said Rick Rieder, BlackRock chief investment officer of global fixed income. "I think we've heard two different types of sentiment from the chair between the latest press conference and Brookings."

☆ Investor group launches campaign to help companies protect nature
▼ + stars: | 2022-12-11 | by ( Expert Analysis | Reuters Professional | Calls Grow For Companies To Disclose Impacts On Nature In Bid To Plug Finance Gap | ) www.reuters.com time to read: +2 min

REUTERS/Luis EcheverriaMONTREAL, Dec 11 (Reuters) - Here's the plan: Select 100 companies whose business burdens nature. Such is the vision of a campaign called "Nature Action 100" launched on Sunday by 11 investment firms hoping to encourage companies to help preserve ecosystems that support more than half the world's economic output. "The aim of Nature Action 100 is to engage those companies that have the highest impact on nature, not only to protect the natural environment but also to mitigate the risks these companies face from mounting pressure to effectively address biodiversity issues," Wearmouth said in a statement. The list of 100 companies will be published next year. Nature Action 100 would seek to select 100 companies for investors to focus on in suggesting how the private sector can navigate any new rules and monitoring their progress, the group said.

☆ Banks’ buyout-debt machine defies quick jumpstart
▼ + stars: | 2022-12-08 | by ( Neil Unmack | ) www.reuters.com time to read: +4 min

Asset managers like Blackstone (BX.N) or Axa (AXAF.PA) pick the underlying loans, while investment banks underwrite the CLO securities and place them with credit investors. Many of the bonds that come out the other side get an ultra-safe AAA credit rating. The combination of higher funding costs and slower private-equity dealmaking has pushed sales of European CLO securities down 67% year-on-year, according to JPMorgan analysts. So, for example, 70% of the whole portfolio would have to default, with the creditors recovering just half of their money, before AAA tranches see a loss. That means banks’ biggest CLO risk is an even sharper slowdown, not a blowup.

☆ November job growth slowed but will still show strength despite layoffs, hiring freezes
▼ + stars: | 2022-12-01 | by ( Patti Domm | In | ) www.cnbc.com time to read: +3 min

Job growth in November was expected to have slowed while remaining strong, even in the face of layoffs and job freezes at major companies. The economy is expected to have added 200,000 jobs, less than the 261,000 in October, according to Dow Jones. Economists forecast the unemployment rate was steady at 3.7%, and average wage growth slowed to 0.3% month-over-month, from 0.4% in October. She said the number of workers out for illness could continue to be a factor, and there have been more announcements of hiring freezes. But big tech and venture capital backed firms are not hiring as much, or are reducing workforces, he added.

But you have to go back centuries in some cases to get anything nearly as bad as 2022 for 'safer' sovereign bonds. "2023 will be the year of the bond," claimed Chris Iggo, chair of the AXA IM Investment Institute. "Road to recession - bullish bonds and quality credit," was how SocGen entitled their view. And while stock volatility makes forecasters nervy, there's a clear attraction for long-term funds in seeking both the fixed income as well as the lift to bond funds when sub-par price discounts disappear into maturity for most high-quality names. "Long high quality bonds in the U.S. and Europe seems like an obvious strategy for 2023," said hedge fund manager Stephen Jen at Eurizon SLJ Capital.

Many in the art and insurance world, however, say it may be only be a matter of time before art works are vandalised, especially if protests spread beyond climate activism. The art insurance market globally earns around $750 million in premiums. PRESSURE ON PREMIUMSLosses and levels of insurance availability tend to dictate insurance premiums. Commercial museums and galleries, however, buy art insurance, and its use is also more prevalent among larger museums in the United States than in Europe. While five insurers contacted by Reuters said they were not yet factoring climate attacks into premiums, some artists say they already face increased costs.

☆ Credit Agricole Q3 profit beats forecasts on corporate loan growth
▼ + stars: | 2022-11-10 | by ( ) www.cnbc.com time to read: +1 min

Credit Agricole joined French and European peers in booking higher-than-expected third-quarter profit, driven mainly by corporate loans and consumer finance which more than offset withdrawals at asset manager Amundi and lower trading revenue. Net income came in at 1.35 billion euros ($1.35 billion), down 3.6% from a year earlier but above a 1.17 billion euro average forecast in a Refinitiv analyst poll, helped by one-off items such as the sale of the La Medicale insurance business. But Credit Agricole, like most European banks, managed to take advantage of rising interest rates to post a strong increase in corporate loans, up by 15.4%, and consumer finance, which rose 12.6%. "Globally we have a lower risk profile than rivals, which means we may profit less from volatility," said Credit Agricole Deputy Chief Executive Xavier Musca. It said it would not increase its stake in Credit Agricole beyond 65%.

☆ Debt rules in Europe are changing. And that could have big repercussions in the bond markets
▼ + stars: | 2022-11-04 | by ( Silvia Amaro | ) www.cnbc.com time to read: +6 min

The euro zone is to discuss changing its fiscal rules - a task that could have market repercussions. Bloomberg | Bloomberg | Getty ImagesThe euro zone will soon reveal changes to its fiscal rules — a move that could have significant repercussions for government borrowing costs and the region's bond markets. At the same time, Germany and the Netherlands would blame the European Commission for not enforcing the rules with fines. "Interest burden on large public debt to GDP ratios is set to increase significantly in the years ahead. This means that in a optimal scenario, the fiscal rules will be changed from 2024 onward.

☆ Italy's Monte dei Paschi says cash call 96.3% covered
▼ + stars: | 2022-11-03 | by ( Valentina Za | ) www.reuters.com time to read: +2 min

Concerns about tapping markets against the backdrop of the Ukraine war, record inflation and an impending economic slump had risked derailing Monte dei Paschi's (MPS) seventh cash call in 14 years. European Union laws curbing state aid to banks capped the Italian taxpayers' contribution at 1.6 billion euros, reflecting Rome's 64% stake in MPS. Underwriters led by global coordinators Bank of America (BAC.N), Citigroup , Credit Suisse (CSGN.S) and Mediobanca (MDBI.MI) will be left holding 93 million euros in shares, MPS said. Having committed up to 200 million euros towards the issue, AXA is expected to emerge as the Tuscan bank's second-biggest shareholder. ($1 = 1.0265 euro)($1 = 1.0259 euros)Reporting by Valentina Za; Editing by Jonathan Oatis and Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ Axa 9-month revenue up 2%, faces 400 mln euro hit from Hurricane Ian
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +1 min

The French insurer - Europe's second-biggest after Germany's Allianz - said its nine-month revenue rose 2% on a comparable basis to 78.4 billion euros from 76 billion in the year-earlier period. Property and casualty revenue was up 3% to 40.7 billion euros, while health revenue was up 14% to 13.1 billion. Axa said that Hurricane Ian, which devastated the coastlines of Florida in September, was expected to be one of the costliest hurricanes to hit the United States in recent years. More than 80 people died in Hurricane Ian, which is likely to be among the worst in U.S. history, President Joe Biden has said. Axa also confirmed it was taking part in a capital increase of Italian bank Monte dei Paschi di Siena (MPS) (BMPS.MI) for an amount that could reach 200 million euros.

☆ Analysis: Top central bankers fear breaking economy if they raise rates too fast
▼ + stars: | 2022-10-28 | by ( Francesco Canepa | ) www.reuters.com time to read: +4 min

STUBBORNLY HIGHBut stubbornly high inflation is making central bankers' job incredibly tricky. While there is nothing central bankers can do about present inflation rates, the mere optics of runaway prices made a "pivot" more difficult to justify. This requires an extraordinary balancing act by central bankers: persuading the market that they are serious about bringing down inflation without choking the economy. "The Fed needs to open a path towards smaller interest rate hikes without sounding too dovish," Christian Scherrmann, U.S. economist at DWS, said. The change of tone was minimal but it was enough for investors to start pricing in smaller hikes further down the road.

The stakes are high as it potentially affects the future use and effectiveness of extraordinary monetary policies such as bond-buying 'quantitative easing' (QE) and questions the wider political independence of central bank policymaking. The European Central Bank, Bank of England and U.S. Federal Reserve are all - to differing degrees - now facing a backwash from years of policy-driven but lucrative balance sheet expansion. As they lift interest rates, that balance sheet burns a hole in their pockets - or more particularly the pockets of their governments long used to windfalls coming the other way. That will surely climb as the BoE is expected to at least double its policy rate, the rate paid on bank reserves, by May. G4 central bank balance sheetsThe easy-money era is overReuters Graphics Reuters GraphicsThe opinions expressed here are those of the author, a columnist for Reuters.

☆ The evolution of Credit Suisse over 166 years
▼ + stars: | 2022-10-27 | by ( ) www.reuters.com time to read: +4 min

1990The group takes a controlling stake in U.S. investment bank CS First Boston and buys Bank Leu, a Swiss private bank. 1997A reorganisation turns CS Holding into Credit Suisse Group and drops the SKA name; it also buys insurer Winterthur, a strategic partner. 2002A reorganisation creates two units: Credit Suisse Financial Services and Credit Suisse First Boston; two years later it splits into three units by adding Winterthur. 2005Credit Suisse and CSFB merge and stop using the Credit Suisse First Boston brand name. In March, U.S. investment fund Archegos implodes, saddling Credit Suisse with a $5.5 billion loss.

☆ Analysis: Decade of central bank largesse haunts taxpayers as losses loom
▼ + stars: | 2022-10-25 | by ( Francesco Canepa | ) www.reuters.com time to read: +6 min

Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. The British government, which received 120 billion pounds in profits from the BoE since 2009, has already earmarked a transfer of 11 billion pounds for the central bank. It will contribute to losses of around 40 billion euros for euro zone central banks next year, according to Morgan Stanley. They have all warned of upcoming losses and the Dutch central bank openly said it risked needing a bailout, although finance minister Sigrid Kaag later cautioned this was "not yet on the table". By contrast, central banks with less cash and higher-yielding bonds in Italy, Spain and Greece were likely to fare better.

☆ Credit Agricole, AXA to bid this week for Banco BPM's insurance deal-sources
▼ + stars: | 2022-10-18 | by ( Andrea Mandala | ) www.reuters.com time to read: +2 min

Credit Agricole has bought 9.2% of Banco BPM this year with a view to expanding their strategic partnerships beyond consumer finance. Insurance and asset management, which Banco BPM has put at the core of its profit strategy, are seen as the obvious candidates. Banco BPM, AXA, Credit Agricole and Generali all declined to comment. Banco BPM CEO Giuseppe Castagna recently said the bank was in no rush to select an insurance partner. In August Banco BPM had indicated it would take a decision by the end of the year.

"It is really not the right time to experiment with fiscal policy," AXA chief economist Gilles Moec said about the UK's moves, assessing that Monday's U-turn may have appeased "the bond vigilantes for now". The term, bond vigilantes, refers to debt investors imposing fiscal discipline on profligate governments by forcing their borrowing costs higher. Ed Yardeni, who coined the bond vigilantes term in the early 1980s, penned a blog post saying "They're Baaaack!" Even U.S. President Joe Biden was speaking the bond vigilante's language at the weekend, noting he wasn't the only one that thought the UK plan was a "mistake". "This is probably the biggest example in practice of the bond vigilantes activity," said Antonio Cavarero, head of investments at Generali Insurance Asset Management.

Up to 200 million euros of the capital will come from France's AXA (AXAF.PA), MPS' partner in an insurance joint-venture. Another 50 million euros are being guaranteed by London-based fund Algebris, whose founder Davide Serra is a close associate of Lovaglio. The state will put in 1.6 billion euros towards the capital raising, based on its 64% stake. Local banking foundations in Tuscany - charitable organisations overseen by Italy's Treasury - have already put in some 30 million euros. After its market value shrunk to just 256 million euros, MPS will sell the new shares with a discount of only 8.6% over Wednesday's closing price stripped of subscription rights.

Another 50 million euros are being guaranteed by London-based fund Algebris, whose founder Davide Serra is a close associate of Lovaglio. The state will put in 1.6 billion euros towards the capital raising, based on its 64% stake. If MPS gathers less than the maximum 2.5 billion euros, the state's contribution will be proportionally reduced so as not to exceed 64% of the total. At least 100 million euros will come from France's AXA (AXAF.PA), MPS' partner in an insurance joint-venture. After its market value shrunk to just 256 million euros, MPS will sell the new shares with a discount of just 8.6% over Wednesday's closing price stripped of subscription rights.

☆ France's AXA commits up to 200 mln euros to Monte dei Paschi cash call - sources
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: 1 min

Factbox: Mega merger talks turn spotlight on Kroger, Albertsons, article with imageDeals · October 13, 2022 · 4:52 PM UTC · undefined ago · undefined agoGrocery giant Kroger Co (KR.N) is to merge with smaller rival Albertsons Companies Inc (ACI.N), Bloomberg News reported on Thursday, in what would be one of the biggest deals in the U.S. retail landscape in recent years.

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