Links spring 2021

Green finance

Asset managers, bankers, central bankers1… Everybody in finance is talking about climate change and sustainability.

Source

But what do green investments mean in practice?

A report by Common Wealth found that some climate-themed funds invest in oil & gas companies such as ExxonMobil. More broadly, the largest holdings of climate funds were Big Tech and finance. Adrienne Buller, the author of the study, writes “what do these ostensibly climate-focused funds really contribute to combatting the climate crisis, reducing emissions or driving a rapid transition to low carbon economic activities? There is nothing in the specific labelling or remit of these funds that would require them to invest in the green economy, in financial instruments design to drive the transition of business models to lower carbon activities, or other similar investments.” (emphasis mine)

Source: Common Wealth

There are plenty of metrics by which providers assess climate risk. Given different methodologies and the complexity of estimating climate risk, there is some divergence in the metrics. However, Chiara Colesanti Senni and Julia Anna Bingler do find that “metrics tend to converge for companies that are most and least exposed to climate risk”.

Data and tools for monitoring climate change and financial assets:

Organizations promoting green finance:

Organizations advocating broader economic change, including green finance:

Finance lobby in Europe

Financial centers

Financial industry

NGOs

Chinese-owned banks in Europe

Bank of China and ICBC are obviously Chinese banks. Less well-known, the following banks are also controlled by Chinese shareholders:

ATLANTICO Europa (Portugal) is owned by “a Hong Kong financial group

Banque Internationale à Luxembourg (Luxembourg) is owned by Legend Holdings (Hong Kong)

Bison Bank (Portugal) is owned by Bison Capital Holding (Hong Kong)

Haitong (Portugal) is owned by Haitong Securities (Shanghai)

Nagelmackers (Belgium) is owned by Anbang, which is owned by the Chinese Ministry of Finance (Beijing)

Saxo Bank (Denmark) is owned by Zhejiang Geely Holding Group (Hangzhou)

If banks are no longer active, why do they still have a banking license?

During my research on banks in Europe, I came across some strange things. Here’s an example. Some banks have a banking license in a country, while the banks themselves say they are no longer active there:

LBBW has a banking license in Luxembourg according to the ECB.

LBBW doesn’t mention Luxembourg on its global locations site. A 2012 article says LBBW pulled out of Luxembourg.

Credit Europe has a banking license in Belgium according to the ECB.

But Credit Europe says it has stopped its activities in Belgium in 2016.

Bank of Scotland has a banking license in France and in the Netherlands, according to the ECB. But the bank says it does not operate internationally.

What’s going on here?

International bank divestments

From the 1990s until the global financial crisis, there was a wave of consolidation and international expansion by Western European banks. Over the past decade, M&A activity has been a fraction of what it used to be. International banks have sold part of their foreign subsidiaries, either volontarily or because regulators forced them to slim down.

Who did they sell to? Often to local or regional banks.

Examples (note that this is a work in progress!):

Africa

Barclays (UK) sells its controlling stake in Absa (South Africa and 9 other African countries) to investors (2017)

Americas

BBVA (Spain) sells BBVA USA to American PNC Financial Services Group (2020)

Asia and the Middle East

Dexia (Belgium) sells Denizbank (Turkey) to Russian Sberbank (2012)

National Bank of Greece (Greece) sells Finansbank (Turkey) to Qatari QNB (2016)

Sberbank (Russia) sells Denizbank (Turkey) to (United Arab) Emirates NBD (2019)

ABN AMRO (Netherlands) winds down its corporate banking activities in Asia, Australia, Brazil and the US (2020)

UniCredit (Italy) sells most of its stake in Yapi Kredi (Turkey) (2020)

HSBC (UK) wants to exit Turkey (2020)

Central and Eastern Europe

AIB (Ireland) sells its stake in Bank Zachodni (Poland) to Spanish Santander (2010)

Barclays (UK) sells Expobank (Russia) to Russian financier Igor Kim (2011)

KBC (Belgium) sells Kredytbank (Poland) to Spanish Santander (2012)

KBC (Belgium) sells its minority stake in Nova Ljubljanska Banka (Slovenia) to Slovenia (2012)

KBC (Belgium) sells Absolut Bank (Russia) to Russian investors (2012)

KBC (Belgium) sells KBC Banka (Serbia) to French Société Générale and Norwegian Telenor (2013)

National Bank of Greece (Greece) sells UBB (Bulgaria) to Belgian KBC (2016)

UniCredit (Italy) sells its controlling stake in Pekao (Poland) to local investors (2016)

Alpha Bank (Greece) sells Alpha Bank Srbija (Serbia) to Serbian AIK Banka (2017)

Cyprus Popular Bank (Cyprus) sells Marfin Bank (Serbia) to Expobank CZ (Czech Republic) (2017)

Eurobank (Greece) sells Bancpost (Romania) to Romanian Banca Transilvania (2017)

National Bank of Greece (Greece) sells its subsidiaries in Serbia to Hungarian OTP (2017)

Piraeus Bank (Greece) sells its unit in Serbia to Serbian Direktna Banka (2017)

Société Générale (France) sells most of its Central and Eastern European subsidiaries to Hungarian OTP (2017-2019)

Société Générale (France) sells Euro Bank (Poland) to Portuguese Millennium bcp (2018)

Bausparkasse Schwäbisch Hall (Germany) sells its stake in CMSS (Czech Republic) to Belgian KBC (2019)

Piraeus Bank (Greece) sells PBB (Bulgaria) to Greek Eurobank (2019)

Danske Bank (Denmark) sells its unit in Estonia to Estonian LHV Pank (2020)

Danske Bank (Denmark) sells its business in Latvia to Latvian Citadele Bank (2020)

Handelsbanken (Sweden) closes its branches in Germany and Poland (2020)

For more on bank consolidation in Central and Eastern Europe, see this report by Deloitte.

Western Europe

Citibank (US) sells its retail banking activities in Belgium to French Crédit Mutuel Nord Europe (2012)

Barclays (UK) sells its retail branches in Italy to Italian Mediobanca (2015)

HSBC (UK) wants to sell its retail banking operation in France (2020)

Exceptions

BBVA (Spain) increases its stake in Garanti (Turkey) to 49.85% (2017)

Crédit Agricole (France) buys three small banks in Italy (2017) and another one in 2020.

KBC (Belgium) buys OTP Banka Slovensko (Slovakia) from Hungarian OTP (2020)

Official lists of credit institutions

Albania

Brazil

Cayman Islands

Dubai (query for bank/banc/banque/credit in the company name and status = active)

European Union (query for individual banks available here)

Guernsey

Hong Kong

Japan

Jersey

New York (query ‘Foreign Agency’ and ‘Foreign Branch’ to find the international banks in NY)

Norway

Russia

Serbia

Singapore

South Korea

Switzerland

United Arab Emirates

United Kingdom

United States (national banks, supervised by the OCC)

If you know where to find official lists of banks in China, please let me know in the comments!