BANKING NEWS FLASH July 16, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 9 Technology .......................................................................................................................... 13 Strategy .............................................................................................................................. 17
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Sales & Marketing Mastercard introduces MasterPass in Poland July 14, 2014 | BBR http://www.banking-business-review.com/news/mastercard-introduces-masterpass-in-poland140714-4317876 MasterCard announced the launch of MasterPass, its global digital service in Poland. MasterPass provides consumers a seamless, secure and speedy checkout - regardless of where they may be and what device they may be using - at online merchant sites around the globe. MasterPass eliminates the need for consumers to enter detailed shipping and card information to complete their online shopping at MasterPass merchant sites. uPaid will be the first partner to leverage the MasterPass platform to enable its digital uPaid wallet. MasterPass will replace and enhance the MasterCard Mobile platform, which has been present in Poland for three years. uPaid will automatically switch its current users of MasterCard Mobile over to the uPaid wallet. Consumers will continue to access mobile applications that enable them to purchase city transport tickets in approx. 90 towns and cities across Poland, movie theater tickets, order groceries or have flowers delivered in a fast and easy way, wherever they see the MasterCard Mobile acceptance mark today, until it transitions to the MasterPass acceptance mark. Plus, they will benefit from an improved online shopping experience at more than 40,000 MasterPass merchants around the world. As an open platform, MasterPass allows consumers to use not only MasterCard, but other branded credit, debit and prepaid cards. “In the recent years we have successfully supported the MasterCard Mobile project as part of which more than 30,000 users relied on mobile payments in that technology. I am glad that as MasterCard's partner we are able to be the first to allow our customers access to a new shopping experience at more than 500 Polish merchants as part of MasterPass”, said Marcin Kopys, CEO at uPaid. For merchants, MasterPass is a convenient, easy to implement solution enabling a simple payment method for consumers. At the same time it opens new business opportunities and international reach. Implementation of MasterPass enables Polish merchants to potentially expand their sales to consumers in the USA, Canada, Great Britain, Australia, China, New Zealand, Italy and Singapore. At the same time eCard, as the first acquirer, will enable MasterPass payments for its merchants in Poland. “At MasterCard we have always valued innovative payment technologies. The launch of MasterPass is the evidence of this approach. It is an excellent tool facilitating shopping experience to both consumers and merchants. Thanks to that we are able to offer new quality to dynamically growing ecommerce entities in that way opening global markets to Polish shops and consumers,” says Bartosz Ciolkowski, General Manager Poland at the MasterCard Europe.
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MasterPass is another step towards the development of the Polish e-commerce market that, according to forecasts, may exceed PLN 30 bn in 2014.
Barclays Bank of Botswana partners with Bytes for new ATM rollout July 09, 2014 | BBR http://www.banking-business-review.com/news/barclays-bank-of-botswana-partners-with-bytesfor-new-atm-rollout-090714-4313890 Barclays Bank of Botswana has partnered with Bytes Managed Solutions for the installation of intelligent cash deposit ATMs across the country. Developed by NCR, the ATMs can accept cash deposits with real time credit capability, recycle the deposited cash, dispense cash, do cheque deposits, while offering a range of other services, such as bill payment, funds transfer, mobile phone top-up and mini-statements. Specifically, the new generation of ATMs provide a variety of functions, aimed at simplifying everyday consumer transactions. Barclays Bank of Botswana Channels head Malebogo Sebusang said the investment in ATMs positions the bank to substantially grow its market share and reaffirms its goal to become the 'GoTo' bank in Botswana. “For customers, transactions such as cash deposits will be effected in real-time, giving them 24/7 ability to transact, and to experience secure cash handling,” Sebusang added. “The new ATMs are optimized for simple cash deposit transactions, allowing our employees in the branches to spend more time with customers on complex banking transactions.” Bytes Managed Solutions Business Development director Alan Anderson said the ATMs installation paves the way for other NCR solutions to be introduced to the bank, particularly in branch transformation, where kiosks and teller cash recyclers add even more convenience for customers. Bytes made substantial adjustments to the ATMs for the Botswana market, including development of currency note templates, and rigorous testing for correct note detection and rejection. Proof of concept and demonstration of the ATM started midway through 2013, while the bank representatives saw the ATM in action at 2013 ATMIA in Cape Town, South Africa, and at a recent NCR Branch Transformation event
MYOB launches new PIN-compatible mobile payments card reader July 07, 2014 | BBR http://cards.banking-business-review.com/news/myob-launches-new-pin-compatible-mobilepayments-card-reader-070714-4311652 MYOB has launched a new credit card reader for its popular mobile payments solution MYOB PayDirect.
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The advanced card reader accepts payments from 'chip and pin' and 'swipe and pin' credit cards. The new card reader supersedes the current MYOB PayDirect audio jack card reader and is compliant with mandatory chip and PIN card payment authorisation from 1 August 2014. Existing PayDirect clients will receive the new device at no extra charge. MYOB PayDirect turns SMEs' smartphones into quick, easy payments terminals. It offers deep integration with popular cloud accounting solution AccountRight so payments are automatically entered into clients' books. It also enables receipts and invoices to be delivered to their customers on the spot. General Manager, Connected Services Andrew Birch says, “MYOB PayDirect has been a huge success in making business life easier by helping SMEs to improve their cash flow. The app has been downloaded more than 3,500 times since its release in April this year. “64% of Australian consumers prefer to pay for goods or services via card. More than half have walked away from a sale or service because they couldn't pay via card. This means around 5.13 million Australians aged 16 and over could potentially be walking away from a sale or service every month. “An increasing pressure for many SMEs is managing cash flow. Burgeoning smartphone and tablet penetration, coupled with the advent of easy to use mobile payment innovations such as MYOB PayDirect can really help remedy cash flow challenges facing many SMEs today. “The streamlined application process, affordable monthly payment plans and no lock-in contracts make PayDirect a must-have solution for all mobile businesses - from tradies to beauty therapists, and accountants to personal trainers. In the next few years, accepting credit and debit payments via mobile devices could become as everyday as visiting an ATM.” One of the co-founders of Victorian-based bespoke men's shirt maker Saibu No Akuma, Tony Wu says, “We utilise traditional [tailor] methods but we can bring it and mix it into modern day flow. Utilising technology and utilising these aspects, we're able to combine the two and understand how we get the best of both worlds and then provide the best experience. When we say we can take credit card payments and show MYOB PayDirect, it adds to the value proposition of customer experience.” MYOB PayDirect payment plans Pay As You Go Plan: $0 per month + 2.8% per transaction ex GST + card reader fee* of $199 ex GST. Ideal for smaller businesses that take less than $2000 in payments per month. No lock-in contracts. Everyday Plan: $20.00 per month + 2.1% per transaction ex GST + card reader fee of $199 ex GST. Ideal for businesses that take between $2000 - $5000 in payments per month. No lock-in contracts. High Volume Plan: $60.00 per month + 1.35% per transaction ex GST + card reader fee of $199 ex GST. Ideal for established mobile businesses that take over $5000 in payments per month. No lock-in contracts.
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Goldman Sachs opens new lending unit in Europe July 07, 2014 | BBR http://www.banking-business-review.com/news/goldman-sachs-opens-new-lending-unit-ineurope-070714-4311643 US multinational investment banking company Goldman Sachs has launched a new lending unit in Europe to offer loans to its private wealth management clients. The unit represents another move by the lender to push beyond its volatile trading business into more traditional areas of banking, as reported by The Financial Times. A part of London-based Goldman Sachs International Bank, the newly wealth management division has a minimum account size of $10m and an average account balance of $40m, and serves the company's roughly 1,700 wealthiest customers throughout Europe, the Middle East and Africa. The unit will provide secured loans for a wide range of purposes, including liquidity facilities, portfolio diversification, tax payments or luxury purchases, such as yachts, and aims to build up a $5bn loan book within the next three years. Goldman Europe private wealth management head Christopher French told the news paper that the unit currently seeks to focus mainly at existing clients rather than 'a proposition to gain new clients.' Unlike its US-based lending business for rich clients, Goldman has so far only given a limited amount of margin loans to its wealthy European customers. In addition, the bank aims to provide mortgages for prime properties in London and elsewhere, subject to regulatory approval within the next one year.
CaixaBank introduces first Visa contactless wristband July 04, 2014 | BBR http://payments.banking-business-review.com/news/caixabank-introduces-first-visa-contactlesswristband-040714-4310678 For the first time in Europe, CaixaBank has launched a Visa wristband that allows users to make easy payments at merchants using the contactless system. The band allows the bank's customers to carry payment cards on their wrists, making for fast and convenient payments at more than 300,000 businesses across Spain. This summer CaixaBank plans to distribute 15,000 contactless wristbands to those customers who have made the most use of their contactless cards. The launch will thereby become the largest programme in Europe to use wearable devices as a payment method with Visa. The wristband will be made available via the bank's entire branch network in the second half of the year, with customers able to make their own designs and get hold of their bands through all the usual banking channels.
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The wristband uses contactless payment technology: inside is a microtag with the customer's encrypted card details, protected with the same security guarantees as normal cards (EMV system). The contactless chip connects the wristband to PoS systems to complete transactions just like a standard contactless card. All this technology is united in a small gadget featuring an adjustable strap and hypoallergenic materials. Complete payments with a simple tap of the wrist against PoS terminals The elastic and adjustable Visa contactless wristband can comfortably be worn by users as they go about their day. It is also water-proof and damp-proof, making it ideal for the summer months. Users can wear the band while working out or during outdoor activities without having to worry about a thing. The wristband also represents an additional card to the user's existing contactless card, meaning all purchases are charged in exactly the same way as with their normal card. Furthermore, wearing the card at the wrist is more convenient and more secure, as users won't need to take it off to make payments, ensuring much faster purchases. Interaction with the PoS is the same as with existing contactless cards, except that the wearer simply brings their wrist close to the terminal rather than a card. The device will connect via proximity and complete the transaction. As with contactless cards, for purchases over 20 euro customers will have to enter their card PIN to validate the transaction. Purchases of less than 20 euro can be made simply by bringing the device close to the merchant's PoS. The system is fully compatible with all PoS systems that support Visa contactless payments all over the world. All the existing security guarantees and free CaixaProtect coverage The wristband has all the same security features as normal contactless cards. Thanks to EMV technology, purchases made with the band are fully encrypted. Furthermore, like all CaixaBank cards, the contactless wristband is covered by the CaixaProtect service free of charge, which protects customers from potential fraudulent card use. To ensure that customers have complete control over transactions completed using the wristband, CaixaBank has set up a specific application that alerts users immediately of any transactions made using the device. The application is completely free of charge and can be downloaded via an SMS that is sent to the user when they activate their wristband. The application is also available via the bank's app store, CaixaM贸vil Store. Uniting innovation in payment methods and wearable banking The rollout of these wristbands sees CaixaBank bring together two areas of innovation that have already had significant international success: the contactless payment system and wearable banking. Back in 2011 CaixaBank became the first bank in Europe to launch a large-scale contactless card payment system. CaixaBank now has more than 4 million contactless cards in circulation, 200,000 contactless-ready PoS systems and accounts for 16% of all contactless payments made in Europe, according to Visa estimates.
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Meanwhile, in early 2014 CaixaBank launched its first financial services for new wearable devices, including the world's first application for smartwatch devices and an application to help Google Watch users locate branches and convert currencies. The contactless wristband unites these two trends, providing users with wearable financial services and all the benefits that these entail, particularly in terms of convenience, security and speed when making payments. By diversifying payment formats, customers can choose the system that suits them best: card, mobile or wearable device. CaixaBank currently has more cards in circulation than any other bank in Spain, at more than 12.5 million, and has also pioneered mobile payments via its NFC service.
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Finance Citi, US regulators reach $7bn settlement over shoddy mortgages sale July 14, 2014 | BBR http://www.banking-business-review.com/news/citi-us-regulators-reach-7bn-settlement-overshoddy-mortgages-sale-140714-4316557 Citigroup is set to announce a $7bn deal with the US authorities today aimed at settling an investigation into its alleged sale of private-label mortgage-backed securities in the run-up to the 2008 financial crisis. Unnamed sources familiar with the negotiations were quoted by Reuters as saying that the company would pay $4bn in cash to the US Justice Department, $2.5bn in consumer relief, as well as $900m more to resolve probes by five states and the Federal Deposit Insurance Corporation (FDIC). The settlement follows months of negotiations, during which the government demanded $12bn and also threatened to sue the company, the sources added. Citi had sold approximately $91bn of mortgage loans packaged into private-label mortgage debt, which is not guaranteed or issued by government agencies, to the investors between 2005 and 2008, according to the bank's annual securities filing. While Citi and Justice Department spokesperson declined to comment on the report, the representatives of attorneys general of New York, Delaware, California, Massachusetts and Illinois, and FDIC did not immediately return requests for comment. The New York-based lender, which had initially offered $363m in April, becomes the second major bank to reach a settlement with regulators since the US President Barack Obama ordered the formation of a task force to investigate the sale and packaging of toxic home loans prior to financial crisis. In 2013, JPMorgan Chase agreed to pay $13bn to settle government investigation over the packaging of toxic mortgages, including by Bear Stearns and Washington Mutual, according to the news agency. Another US lender, Bank of America (BofA) is also negotiating with the Justice Department to settle similar claims.
Commerzbank likely to pay up to $800m to resolve US probe July 11, 2014 | BBR http://www.banking-business-review.com/news/commerzbank-likely-to-pay-up-to-800m-toresolve-us-probe-110714-4315659 German banking and financial services company Commerzbank is likely to pay between $600m and $800m to settle a probe into its alleged dealings with countries sanctioned by the US
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Unnamed sources familiar with the matter were quoted by Reuters as saying that the penalty includes a demand for more than $300m from New York's banking regulator, Benjamin Lawsky. One of the source said a settlement is anticipated to be reached in the next few weeks. Suspected of transferring money through its US operations on behalf of companies in Iran and Sudan, the Frankfurt-based lender was also found guilty of stripped identifying information from incoming wires to avoid red flags that would have enabled regulators to police the transactions. One source said the US regulators are investigating the bank's alleged transactions for the Islamic Republic of Iran Shipping Lines, despite knowing that the company was sanctioned. The shipping company is under US economic sanctions since 2008 for allegedly supporting Iran's proliferation of weapons of mass destruction. The lender is expected to sign a deferred prosecution agreement that would suspend criminal charges in exchange for the financial penalty and other concessions, according to the sources. Commerzbank is believed to have fired employees in Hamburg 'some time ago' for hiding dealings with Iranian and Sudanese customers, Frankfurter Allgemeine Zeitung reported. A Commerzbank representative refused to comment on the allegations, the size of any settlement, and on the newspaper report. The US authorities, including the Justice Department, Manhattan District Attorney's office and the New York Department of Financial Services also declined to comment. Commerzbank, which is 17% owned by the German government, had set aside â‚Ź934m as provision for litigation risks, including the US investigation at the end of 2013, according to the news agency.
Citi nears settlement with US regulators over faulty mortgage sale probe July 09, 2014 | BBR http://www.banking-business-review.com/news/citi-nears-settlement-with-us-regulators-overfaulty-mortgage-sale-probe-090714-4313324 Citi has reportedly agreed to pay around $7bn to settle an investigation into its alleged sale of private-label mortgage-backed securities in the run-up to the 2008 financial crisis A source familiar with negotiations was quoted by Reuters as saying that an announcement of the settlement between the bank and the US Justice Department is expected to be made as early as next week. A majority of the settlement is expected to be in cash, but the bank would also pay several billion dollars in help to struggling borrowers, the source added. Another source with knowledge of the matter told The Wall Street Journal that the lender would pay $4bn in cash, while the remainder would come from soft dollar penalties, including mortgage modifications and other forms of relief to homeowners, and possibly payments to state attorneys general involved in the case.
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The Justice Department had suspended negotiations and prepared to sue the New York-based Citi last month after it offered to pay less than $4bn to settle the charges. The department had initially sought more than $10.6bn from the lender, but was willing to consider an offer below the requested amount. Citi had sold approximately $91bn of mortgage loans packaged into private-label mortgage debt, which is not guaranteed or issued by government agencies, to the investors between 2005 and 2008, according to the bank's annual securities filing. The resolution of the Citigroup case is likely to heat up the negotiations between the US regulators and Bank of America (BofA) aimed at settling a similar investigation. BofA's Merrill Lynch unit is believed to have issued about $965bn of faulty mortgage bonds between 2004 and 2008.
SunTrust agrees to pay $320m to settle HAMP mortgage modification probe July 04, 2014 | BBR http://retailbanking.banking-business-review.com/news/suntrust-agrees-to-pay-320m-to-settlehamp-mortgage-modification-probe-040714-4310160 SunTrust Mortgage has signed an agreement with the US Department of Justice (DoJ) to settle a criminal investigation of its administration of the Home Affordable Modification Program (HAMP) from 2009 to 2010 Under the agreement, SunTrust Banks' subsidiary will pay around $320m to settle allegations that it misled numerous mortgage servicing customers who sought mortgage relief through HAMP, and suffered serious financial harms due to the mismanagement. The company has agreed to pay up to $274m in consumer remediation, $20m for housing counseling for homeowners, $10m toward restitution to the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, as well as a cash payment of $16m to the Treasury Department. US Attorney General Eric Holder said SunTrust's mismanagement drove up foreclosures, decimated individual credit and increased costs for distressed homeowners. “This resolution will provide much-needed restitution for victims. It will make available substantial funds to help other homeowners avoid foreclosure,” Holder added. SunTrust Mortgage president and chief executive officer Jerome Lienhard said the settlement of the matter enhances the company's ability to focus on the future and support the continued housing recovery. “We recognize that there were deficiencies in our administration of HAMP during the recession, and through the improvements we have made to our internal processes and this restitution plan, we are demonstrating our commitment to meet the high standards that we set for ourselves and that our customers expect,” Lienhard added. SunTrust is accused of making material misrepresentations and omissions to borrowers in HAMP solicitations, and failing to process HAMP applications in a timely manner.
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The company also reached a $968m settlement with DoJ and the Department of Housing and Urban Development (HUD) last month to resolve allegations of improper mortgage origination and servicing practices.
Santander launches $100m fintech venture fund July 03, 2014 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=26231 Spanish banking giant Santander has launched a $100 million, London-based fintech venture capital fund as it bids to get in on the ground floor at startups leading the financial services digital revolution. Owned by Santander UK but operating as an independent unit, the fund will look to invest in fintech firms around the world, initially focusing on startups involved in e-commerce and payments, online lending and investing, and big data analytics. Explaining the thinking behind its new fund, Santander cites Accenture research that shows banks having traditionally only accounted for 10% of fintech innovations, whilst VC backed companies have supported 60%. It is hoping to shift the balance, helping to “support the digital revolution” and ensure that it is at the forefront, bringing innovative services to its customers. Ana Botin, chief executive, Santander UK, says: “The Santander Fin-Tech Fund builds on our philosophy of collaboration and partnership with small and startup companies at Santander. In this case our aim is to provide fintech companies with much needed capital, whilst we gain know-how and our customers benefit from the latest thinking.” According to Accenture, global fintech investment tripled between 2008 and 2013 from $928 million to $2.97 billion and is expected to double again to between $6 billion and $8 billion by 2018. With startups and established tech giants posing an increasing threat to their business, many banks have decided that cooperation, rather than competition, is the best approach. Last year Santander's Spanish rival BBVA set up a similar, $100 million, Silicon Valley-based fintech venture fund while Russia's Sberbank has also pumped in $100 million into its fund, which this week invested in digital challenger Moven. HSBC is also understood to have launched a $200 million fund with the aim of finding startups that can help to refresh its own technology offerings.
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Technology Bradesco deploys new NCR technology July 15, 2014 | BBR http://www.banking-business-review.com/news/bradesco-deploys-new-ncr-technology-1507144317871 Bradesco, one of the largest financial institutions in Brazil, will begin piloting new technology from NCR Corporation in order to give customers immediate account credit for cash deposits made at the ATM. The new technology from NCR, the global leader in consumer transaction technologies, will eliminate the use of envelopes for cash deposits, making Bradesco one of the first financial institutions in Brazil to incorporate intelligent deposit into its ATM channel. Both account holders and non-account holders of the bank will benefit from this new technology. Account holders will have the deposit amount instantly credited into their accounts, even on weekends. Non-account holders no longer need to go to a teller to deposit cash. Bradesco began this pilot in June at its Bradesco Next branch in São Paulo. “With NCR's technology, Bradesco takes the lead once again and inaugurates this new service in Brazil,” said Elias Silva, vice president of NCR Latin America and Caribbean. “Bradesco is consistently a pioneer in using technology to deliver quality services throughout the country.” The ATMs specially developed by NCR for Bradesco have technology that combines hardware produced in Brazil at the company's factory located in the City of Manaus, State of Amazonas. “Putting a stack of cash directly into an ATM, without using envelopes, and crediting the amount online into the account makes sense for clients' lives. And that's our goal: to improve our clients' lives through improved access to their financial needs,” said Luca Cavalcanti, director of Digital Channels at Bradesco. Bradesco and NCR also are working to extend real-time deposits to checks, as well. This new model will help to reduce the waste of envelopes used in ATM deposits, give customers dramatically improved access to their funds, and decrease costs
UK digital banking reaches £1bn a day, says BBA report July 08, 2014 | BBR http://www.banking-business-review.com/news/uk-digital-banking-reaches-1bn-a-day-says-bbareport-080714-4312191 The UK customers are using mobile and internet banking for transactions worth nearly £1bn a day, a new report by the British Bankers' Association (BBA) and Ernst & Young (EY) has revealed. Entitled 'It's in Your Hands,' the study found that the rate of adoption of digital banking in 2014 has grown strongly with banking apps being downloaded at a rate of around 15,000 a day.
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The second Way We Bank Now report said the technology was used for transactions worth £6.4bn a week, an increase from £5.8bn in 2013, while noting that internet banking services are typically receiving seven million log-ins a day. In addition, the report forecast spending on contactless cards would rise to £6.1m a week this year from £3.2m in 2013. BBA chief executive Anthony Browne said the report highlights how enthusiastically the UK citizens are embracing mobile banking, contactless cards and a range of other consumer-friendly banking technologies. “This study shows that banks have, are and will continue to compete against one another to offer customers innovative technology to win your custom,” Browne added. Digital Financial Services EY Partner Tariq Khatri said the digital banking is shaking up the market, driving competition and innovation, which is great news for both consumers and the UK economy. “The British public's adoption of digital banking has reached critical mass this year and we believe the UK has a unique opportunity to achieve a leading position in digital banking,” Khatri added. Despite warning that the branch use is falling sharply in the wake of digital banking, the report insisted that the high street outlets will remain important when a customer takes out a mortgage, wants to assess their financial options or resolve a complaint. “2,274 bank branches have been refurbished in the past two years, underlining the commitment to high street outlets,” the report said.
Absa Bank deploys EquiLend trading platform July 07, 2014 | BBR http://ecnandexchanges.banking-business-review.com/news/absa-bank-deploys-equilendtrading-platform-070714-4311741 Absa Bank, the South African banking entity of Barclays Group Africa, became the first-ever domestic South African entity to execute a securities finance trade via the EquiLend trading platform. With Absa Bank now trading on EquiLend, the bank and its clients benefit from the ability to automate securities finance trading with EquiLend counterparties around the globe. Furthermore, global market participants now have unprecedented access to the South African market. Brian Lamb, CEO of EquiLend, says: “As EquiLend's global footprint continues to expand, we are constantly aware of our clients' demands to bring the automation and efficiency gains seen for users of our platform to new markets. We have seen significant interest among domestic market participants in South Africa, who are keen to elevate their international presence by joining the EquiLend platform. We anticipate considerable growth in this market going forward.” Francois Henrion, head of Equity Finance within Absa's Prime Services business, says: “Partnering with EquiLend was a natural step for Barclays Group Africa in becoming the 'go-to' prime brokerage business. Our prime brokerage clients benefit from improved pricing and liquidity in their financing portfolios, and as a lending business, we are able to significantly improve our access to, and utilization of, inventory.”
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EquiLend anticipates greater activity in the South African securities finance market as the need for an efficient means of sourcing securities to cover failed trades becomes increasingly important with the Johannesburg Stock Exchange moving toward a shorter securities settlement cycle, from the current T+5 cycle to T+3. That has increased demand among domestic market participants for securities finance in South Africa.
ECB reveals further details of targeted longer-term refinancing operations July 04, 2014 | BBR http://policiesandregulatorycompliance.banking-business-review.com/news/ecb-reveals-furtherdetails-of-targeted-longer-term-refinancing-operations-040714-4310665 The Governing Council of the European Central Bank (ECB) decided on further technical details of a series of targeted longer-term refinancing operations (TLTROs), announced on 5 June 2014. The TLTROs are designed to enhance the functioning of the monetary policy transmission mechanism by supporting bank lending to the real economy. Under the scheme, banks will initially be able to borrow an amount equivalent to up to 7% of a specific part of their loans in two operations in September and December 2014. After this, additional amounts can be borrowed in further TLTROs, depending on the evolution of the banks' eligible lending activities in excess of bank-specific benchmarks. The additional borrowing allowance is limited to three times the difference between the net lending since 30 April 2014 and the benchmark at the time it is claimed. The Governing Council decided today that: For banks [1] that exhibited positive eligible net lending in the twelve-month period to 30 April 2014, the benchmarks are always set at zero. For banks that exhibited negative eligible net lending in the year to 30 April 2014, different benchmarks apply. These are set as follows: the average monthly net lending of each bank in the year to 30 April 2014 is extrapolated for 12 months until 30 April 2015. For the year from 30 April 2015 to 30 April 2016, the benchmark monthly net lending is set at zero. Banks that borrow in the TLTROs and fail to achieve their benchmarks as at 30 April 2016 will be required to pay back their borrowings in full in September 2016. Banks participating in a TLTRO will be subject to specific reporting obligations. The initial operations will be conducted on 18 September and 11 December 2014, with the additional operations carried out in March, June, September and December 2015 and in March and June 2016. Further technical details of the TLTROs can be found in an annex to this press release. By the beginning of August 2014 the ECB will publish a legal act that will form the basis of the series of TLTROs.
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Banco Popular sign strategic IT agreement with IBM July 02, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/banco-popular-sign-strategic-itagreement-with-ibm-020714-4308268 Banco Popular has signed a strategic outsourcing agreement with IBM to help the bank transform its technology infrastructure, including its private cloud. The bank expects to increase efficiency and flexibility as part of its growth strategy. The agreement may result in an accumulated savings of $200 million over the 10 years of the agreement. Cloud solutions provide Banco Popular with flexibility, speed and a model to allow for innovation and future growth. Under the framework of the agreement, Banco Popular will transfer to IBM 41 technology infrastructure employees. Banco Popular Chief Technology Officer Fernando Rodríguez Baquero and General Manager of IBM Global Technology Services Europe Juan Antonio Zufiria presided over the signing ceremony. Banco Popular stated, “With this agreement, with IBM as our technology partner, we will achieve market standards in terms of technology services needed to run an important digital transformation in Banco Popular, always aiming to deliver the best service to our clients.” “Banco Popular is a pioneer in the Spanish banking industry. We are proud of being a contributor in its strategic plan,” said Juan Antonio Zufiria, General Manager of IBM Global Technology Services Europe. “The progressive adoption of innovative solutions such as cloud computing will enable the bank's technology infrastructure to be more flexible and adaptable to business needs, which will result in better client service.” The agreement is a step further in the technology development of Banco Popular, which includes the recent modernization of its Data Center - also with IBM's help - and the bank's new technology headquarters in Madrid, Spain
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Strategy Banco BTG Pactual agrees to acquire BSI for $1.7bn July 15, 2014 | BBR http://www.banking-business-review.com/news/banco-btg-pactual-agrees-to-acquire-bsi-for17bn-150714-4317511 Banco BTG Pactual has signed a binding agreement to acquire all of the shares of Assicurazioni Generali’s Swiss private-banking unit, BSI, for CHF1.5bn ($1.7bn). Under the terms of the agreement, the Brazilian lender will pay CHF1.2bn ($1.3bn) in cash and CHF300m ($336m) in ordinary and preference shares. The acquisition is expected to create an international private banking platform with a strong capital base capable of offering innovative and tailored investment solutions, global reach and a premier client service to its customers. Italy-based Generali has been searching for a suitable buyer for BSI since three years, reported Reuters. Subject to the usual regulatory approvals, the transaction is expected to be completed by the first half of 2015. Following transaction, BSI will become BTG Pactual's global wealth management platform and will continue to operate under the BSI brand and identity. Banco BTG Pactual chief executive officer Andre Esteves said the acquisition reflects the company's confidence in the tradition and strength in Switzerland as a global financial centre. “It's an opportunity to build one of the biggest global private-banking platforms,” Esteves added. Generali Group CEO Mario Greco said the BSI sale represents a key milestone in the turnaround of the company, and exceedS its Solvency 1 target, restoring its capital base over a year in advance of the 2015 plan. “This sale completes the disposal process aimed at strengthening the capital base of the Group, resolving a key issue for us, and allowing Generali to focus on driving forward with its core insurance business,” Greco added. “With regards to BSI, the sale will allow it to benefit from a new owner dedicated to its development as a leading private banking group.” BSI has approximately 2,000 employees in more than ten countries worldwide, and brings 140 years of private banking heritage, and around $100bn in assets under management (AuM).
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Lloyds to slash additional 500 jobs in finance and retail divisions July 10, 2014 | BBR http://www.banking-business-review.com/news/lloyds-to-slash-additional-500-jobs-in-financeand-retail-divisions-100714-4314579 Lloyds Banking Group (LBG) is set to slash additional 500 jobs in its finance and retail operations, as part of the group's restructuring strategy The latest job cuts will affect about 100 customer service managers and more than 360 positions in the finance business sector, in addition to the retail and group risk functions. In June 2011, Lloyds announced that it would axe nearly 15,000 jobs in retail, risk, operations and commercial banking divisions by the end of 2014. The 25% government-owned bank said in a statement that the group always looks to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group. “Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy,” the statement added. “Compulsory redundancies will always be a last resort. In fact, since the strategic review in 2011 only around a third of role reductions have led to people leaving the group through redundancy.” However, the Unite union criticised the announcement and urged the London-based bank to stop its “salami-slicing” of jobs a bi-monthly basis. Unite finance national officer Rob MacGregor said the bank should halt job cuts as it persists in continuing to exploit cheaper resources offshore. “Unite questions whether LBG is living up to its own job security agreements as it would appear that an extraordinary number of colleagues are working overtime to make ends meet which, at a time of job losses, should not be happening,” MacGregor added. The latest tranche brings the jobs lost by the group to about 30,000 since the banking crisis unfolded in 2008, according to the union.
European Commission clears Alpha Bank’s restructuring plan July 10, 2014 | BBR http://www.banking-business-review.com/news/european-commission-clears-alpha-banksrestructuring-plan-100714-4315165 The European Commission has cleared the proposed restructuring of Greece's Alpha Bank through further downsizing of international operations and a reinforcement of local operations. Alpha Bank has repeatedly been bailed out by the Greek authorities and the Hellenic Financial Stability Fund (HFSF) since 2008, prompting the European Commission to open an investigation in July 2012.
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The commission found that the measures already implemented and those envisaged in the future will enable the lender to return to viability, while limiting the distortions of competition brought about by the state funding. European Commission competition policy vice president in charge JoaquĂn Almunia said: “Alpha Bank's restructuring will make a significant contribution to reinforcing the viability of the Greek banking sector, to the benefit of the Greek economy.â€? Under the restructuring plan, the bank is rationalising its operating expenses, in addition to reinforcing the net interest income, strengthening the balance sheet and a strict risk monitoring. Monitored by a trustee, the commitments are expected to help turn the company into a solid and viable bank that can significantly contribute to the sustainable financing of the Greek economy. In addition, the watchdog approved Alpha's acquisition and integration of Emporiki Bank.
Commerzbank, Deutsche Bank begin talks to settle US sanctions violations probe July 08, 2014 | BBR http://www.banking-business-review.com/news/commerzbank-deutsche-bank-begin-talks-tosettle-us-sanctions-violations-probe-080714-4312792 Germany-based lenders Commerzbank and Deutsche Bank are reportedly in talks with the US state and federal authorities to settle an investigation into their alleged dealings with countries sanctioned by the US. A source with direct knowledge of the regulatory investigations was quoted by Reuters as saying that the settlement talks have just started and the timing of the deal currently remains unclear. The negotiation between US regulators and Commerzbank, which is suspected of transferring money through its US operations on behalf of companies in Iran and Sudan, was reported by The New York Times. Unnamed sources with the knowledge of the matter told the news paper that the bank is likely to reach a settlement agreement with the US authorities as soon as this summer, and is expected to pay at least $500m in penalties. The bank would most likely face a so-called deferred prosecution agreement that will suspend criminal charges in exchange for the fines and other concessions, the sources added, noting that the deal could set the stage for a separate settlement with Deutsche Bank. Both Deutsche Bank and Commerzbank, which have earlier disclosed the existence of the investigations, refused to comment on the latest report.
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Sun Bancorp reveals comprehensive restructuring plan July 04, 2014 | BBR http://retailbanking.banking-business-review.com/news/sun-bancorp-reveals-comprehensiverestructuring-plan-040714-4310772 Sun Bancorp has revealed multiple strategic initiatives designed to improve performance in the bank’s credit, operational and profitability metrics. Proposed by the bank's newly appointed president and chief executive officer, Thomas O'Brien, the comprehensive restructuring plan seeks the company to become a highly-focused commercial banking platform with high-value commercial products and services. As part of the plan, the company would reduce its workforce by 38%, which equates to 242 full-time jobs, and also reduce its branch network by 30% by either closing or consolidating several units. In addition, the bank intends to eliminate its home mortgage and commercial specialty lending business units, streamline disposition of $96m of 'problem loans,' and also move its legal headquarters to Mount Laurel, New Jersey, US. O'Brien said the company will focus on those businesses where it can offer a strong menu of commercial banking products and services with the appropriate technology to support evolving customer trends. “We must right-size our platform and remediate our remaining regulatory issues, so that we can efficiently generate positive earnings, support healthy growth and execute on revenue enhancement strategies,” O'Brien added. Commenting on job cuts, O'Brien said the decisions must be judged in view of the primary objective of returning to profitability, even though the reductions are unpleasant. “Current staffing levels at the Company are not sustainable. As a company, we must effectively address outstanding regulatory matters and build operating profitability,” O'Brien noted. Once completed, the restructuring plan is expected to bring an annual cost savings of approximately $16.8m to the company.
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