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Goldman Sachs to buy Dutch asset manager NNIP for around $2 BLN

Goldman Sachs said that it will buy Dutch insurer NN Group’s asset management arm for 1.7 billion euros ($1.98 billion) in the biggest acquisition by the U.S. company since David Solomon became chief executive in 2018. The deal is part of Solomon’s strategy to make the bank’s revenue stream less reliant on earnings from trading and advising on deals. The Wall Street firm wants to bulk up in areas like wealth management and expand its presence in regions outside the United States.

Solomon gave a statement that this acquisition allows them to accelerate their growth strategy and broaden their asset management platform. NNIP, or NN Investment Partners, has $335 billion in assets under management. Goldman said NNIP’s 900 employees will join GS and the Netherlands will become a significant location in its European business. Goldman is the latest major financial firm to bulk up operations in the Netherlands in the wake of Britain’s departure from the European Union.

As part of the deal, NN Group, the Netherlands’ biggest insurer, has committed to leave its $190 billion portfolio of insurance assets under NNIP management after it joins Goldman. NN CEO David Knibbe said that the combined investment expertise and scale will enhance the service offering to NN Investment Partners’ clients, including NN Group. NN said the sale of NNIP will improve its Solvency II ratio by 17 percentage points, from 209% at the end of June. Credit Suisse in a comment on the deal stated that given the company’s already strong capital position which is sufficient to fund its organic growth opportunities, and the lack of obvious M&A targets, the potential for significant excess capital returns in the coming years is apparent. It said that the price Goldman paid was slightly higher than expected. The Dutch firm’s asset management arm had also attracted interest from other insurers and asset managers.

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LexisNexis risk solutions study reveals sharp rise of financial crime compliance costs

Decision makers inside banks, investment firms, asset managers and insurance firms identify the drivers impacting financial crime compliance. LexisNexis® Risk Solutions revealed that the results of its annual True Cost of Financial Crime Compliance Study for the U.S. and Canada. The total projected cost of financial crime compliance for the region is approximately $49.9 billion. The survey illustrates the sharp increase in financial crime compliance costs.

The study projects the average annual cost of financial crime compliance for U.S. financial institutions with $10 billion. Pandemic Continues to Spur Growth. The pandemic continues to negatively impact compliance operations. Sixty eight percent of U.S. respondents report longer times required to complete due diligence. Fifty five percent of U.S. respondents report reduced productivity compared.

More U.S. financial institutions now rank real estate and hospitality as top money laundering risk segments. Crime involving digital payments, trade-based money laundering and money mule schemes are on the rise. Digital currency is a growing problem for Canadian firms. Crimes involving digital payments have the greatest impact on compliance costs. Cryptocurrency crimes have the greatest impact on compliance costs for Canadian firms. The survey results demonstrate that financial institutions are battling a broader set of issues.

Survey respondents indicate that a lack of current and extensive data tops the list of Know Your Customer (KYC). Leslie Bailey, vice president of financial crime compliance strategy for LexisNexis Risk Solutions stated that the study shows clear linkages between the pandemic, digital crime and increasing regulations. Hence, financial institutions need to prepare for expanded compliance obligations and risks from emerging financial crime. Bailey added that digital transformation is a game-changer for financial crime compliance operations.

This will require a sophisticated approach that incorporates insight into digital behaviors. This study surveyed 145 decision-makers in the U.S. and Canada. Responses were collected in June 2019, August 2020 and June 2021. Organizations such as banks, investment firms, asset management firms and insurance firms. The total annual cost of compliance across firms was calculated using survey data. The spend amount was generated by multiplying the average percent allocated to financial crime costs.

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COP26 delegates agree on need to deliver on $100 BLN climate finance pledge

Delegates heading to the COP26 U.N. climate summit in Glasgow. These delegates agreed that they must deliver on the $100 billion per year pledge. COP26 president Alok Sharma said that, it is to help most vulnerable nations for tackling the climate change.

After many days of meetings at the pre-COP26 climate event, which happened in Italy, Sharma said that there was a consensus to do more. Which is to keep the 1.5 degrees Celsius target within reach, adding more needed to be done collectively in terms of national climate plans.

The COP26 conference in Glasgow aims to secure more ambitious climate action. This is from nearly 200 countries, those all that have signed the 2015 Paris Agreement for limiting the global warming, well below 2.0 degrees Celsius. And to 1.5 degrees, above pre-industrial levels.

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City’s exposure to Evergrande is very minimal-Hong Kong finance Chief

Hong Kong’s exposure to debt-laden developer China Evergrande Group is very minimal at 0.05%. This is of banking assets, South China Morning Post reported, citing the city’s finance minister. Financial Secretary Paul Chan told the newspaper that it is very minimal and won’t cause them any systemic risks. He added that he had arrived at the conclusion after a recent audit of the local banking sector’s exposure to the company.

Chan also said that the Hong Kong’s stock market was inevitably subject to some volatility. This is amidst a recent mainland crackdown on some industries. But still he believed any setback would be temporary. With liabilities of $305 billion, Evergrande has sparked concerns its cash crunch could spread through China’s financial system. This may reverberate globally and that is a worry that has eased with the Chinese central bank’s vow, to protect homebuyers’ interests. Evergrande has missed two bond interest payments. Bondholders have said this and its offshore debt, amounting to about $20 billion, trades at distressed levels.

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