MSCI said on Wednesday that a report that it had received a takeover offer from S&P Global that would have combined the two biggest global asset benchmark providers was “incorrect” and that it is currently “not in discussions with any third party”.
The group’s statement came after the Evening Standard reported that MSCI had rejected an $11bn bid from rival S&P Global.
“…we believe such reports are incorrect,” MSCI said. “We are not in discussions with any third party, and we have not received any offer or indication of interest.”
A pact would have brought together the two biggest providers of global financial market indicators. Benchmarks have taken on increased significance in recent years amid the rapid rise in exchange-traded funds that passively track indices.
S&P Global is perhaps best known for managing both the Dow Jones Industrial Average — among the oldest US equities gauges, and the S&P 500 index, a broader index that is closely followed by professional investors and is tracked by the largest ETFs.
MSCI manages a suite of all-world indices that capture 99 per cent of investable global equities, among a slew of other barometers.
EU warns banks may face higher bad loan risk when ECB tightens - Reuters News
15-Mar-2017 15:35:10
1 trillion euros of bad loans hampers EU bank lending
EU documents warn the problem has European dimension
EU finance ministers to discuss in April, Germany cautious
By Francesco Guarascio
BRUSSELS, March 15 (Reuters) - European Union banks may face increasing risks from bad loans totalling 1 trillion euros ($1.1 trillion) when the European Central Bank cuts back its economic stimulus programme, internal EU documents seen by Reuters said.
Banks have been saddled with more so-called non-performing loans (NPLs) following the 2008 global financial crisis, as companies and households have struggled to pay their debts. This in turn has crimped their ability to make new loans.
While the problem is more acute in countries such as Greece and Italy, which have experienced a prolonged economic crisis, it has "a European dimension" with spill-overs possible, a report by representatives of EU countries and regulators said.
And the risks posed by NPLs to the whole EU banking system may increase, "should monetary conditions become less accommodative," a document accompanying the report said.
The ECB is scheduled to cut the pace of its bond purchases, which it has used to try to stimulate economic growth, by a quarter to 60 billion euros a month from April.
Although it will continue them until at least the end of the year, it is also preparing the ground for a gradual phasing out of its aggressive stimulus measures, sources said. (Full Story)
EU countries with the highest rates of bad loans have returned to growth since the ECB launched its stimulus programme in 2014, but it remains unclear what will happen when this ends.
While banks are likely to benefit from higher interest rates, which improve the margin they make on their loans, this may be offset by the effects of another an economic slowdown.
The report will be discussed at a meeting of EU finance ministers in Malta on April 7-8 on how to tackle the NPL issue and a more detailed version is expected in spring.
ITALY'S BAD LOANS
Germany, the EU's largest economy, has so far opposed EU-funded solutions to the problem, arguing that it is only an issue in some countries and it is up to them to resolve it.
In absolute terms, more than a quarter of all EU bad loans are held by Italian banks, with Banca Monte dei Paschi di Siena BMPS.MI, which is negotiating the terms of a multi-billion-euros bailout with EU regulators, holding the largest proportion of bad loans compared to its capital.
German banks hold only 2.6 percent of the loans classified as soured, while in Greece and Cyprus nearly half of all loans are difficult to recover, according to the latest European Banking Authority (EBA) data.
Greek banks are being urged to reduce their high load of bad loans, a source said on Wednesday (Full Story).
In Portugal NPLs are almost 20 percent of the total, and in Slovenia and Italy the ratio is above 16 percent, against a slightly declining EU average of 5.4 percent.
To tackle the problem, the EBA proposed in January setting up a publicly-funded bad bank that would acquire soured loans at prices higher than the market is now ready to pay. (Full Story).
This could help create a secondary market for the loans, which banks now are reluctant to sell because prices are too low and there are too few buyers.
While UniCredit CRDI.MI, Italy's biggest bank, has sold 17.7 billion euros of bad loans at average 13 percent of their gross nominal value this year, it has also raised 13 billion euros in the markets to compensate the capital shortfall.
Italian lenders price bad loans at 41 percent of their nominal value on average, but the quality of the credit varies and few could afford a capital rise on the scale of UniCredit's.
While Germany did not endorse the EBA plan, the EU documents point at the development of a secondary market for NPLs as a priority. (Full Story)
But this issue remains controversial and is likely to require a compromise at political, rather than technical, level at the Malta meeting, an EU official familiar with the discussions told Reuters.
The documents also suggest a wider "restructuring of banking sectors" as states address the NPLs problem. This could lead to mergers among EU banks after they offload their bad loans, a banking industry official said.
"Time limits" to conclude insolvency procedures are also suggested as a way of boosting the value of bad loans, as recovering them would become easier and less costly. This proposal would complement European Commission plans to shorten bankruptcy procedures and the recovery of bad loans.
BNP Paribas in talks to buy UK estate agents Strutt & Parker
BNP Paribas is in talks to acquire Strutt & Parker, the UK estate agents, in what would be a vote of confidence in the British property market by France’s biggest bank.
The talks have been going on for several months and may not lead to a deal, according to people familiar with the matter. BNP Paribas and Strutt & Parker both declined to comment.
Strutt & Parker, which made £18.2m of pre-tax profit on £108m of revenue in the year to April 2016, has been rumoured to be for sale for some time as it struggles with a sharp slowdown in prime London house prices.
BNP Paribas Real Estate is one of the biggest property services companies in Europe, generating more than €700m of revenues last year from consulting, managing and investing in both commercial and residential property. The UK is its third-biggest market after France and Germany, generating a 12 per cent of the unit’s total revenues.
The French bank, which has been one of the most acquisitive in Europe, may only be interested in buying the commercial property unit of Strutt & Parker and could team up with another group that buys the residential property arm.
Prices for prime London homes fell 5.8 per cent last year, and in the most expensive areas they are down 12.5 per cent from their 2014 peak, according to Savills. Among newly built central London homes, sales dropped in 2016 to their lowest since 2012, according to Molior London.
Strutt & Parker’s residential property arm specialises in high-end homes. This contributed to a 35 per cent fall in pre-tax profits in its last annual results. The estate agency has been considering its options, advised by Evercore, since last year.
Andy Martin, senior partner of the 132-year-old company, has announced plans to step down this year. Other potential suitors include CBRE and Bidwells, according to a recent report by Estates Gazette.