BANKING NEWS FLASH August 18, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 7 Technology .......................................................................................................................... 11 Strategy .............................................................................................................................. 16
2|Sutherland Insights Banking News Flash Aug 18, 2014
Sales & Marketing HDFC Bank introduces ForexPlus card for Haj and Umrah pilgrims in India August 18, 2014 | BBR http://cards.banking-business-review.com/news/hdfc-bank-introduces-forexplus-card-for-hajand-umrah-pilgrims-in-india-180814-4345311 HDFC Bank is offering the Haj and Umrah pilgrims from India a new ForexPlus card, which can be used to withdraw money from local ATMs and banks, and also for making payments during the pilgrimage. The new prepaid card helps pilgrims avoid carrying foreign currency and thus shields them from fluctuating exchange rates when travelling internationally. The card is available with both Visa and Mastercard options, and can be topped up during the travel. HDFC Bank branch division country head Navin Puri said: "HDFC Bank is consistently looking at ways in which we can make a difference in people's lives. "With the launch of the prepaid forex card, we are offering pilgrims to Haj and Umrah a customized product to suit their ever-evolving requirements. "They can make payments in a safe and easy manner, and also avail of the exclusive deals offered on the card." The forex card is being offered to both HDFC Bank customers and general public at all branches across the country from today. In addition to Saudi Riyals, HDFC's ForexPlus card is also available for other currencies such as Australian Dollar, AED (Dirhams), Canadian Dollar, Euro, Japanese Yen, Singapore Dollar, Sterling Pound, Swiss Franc, Swedish Krona and US Dollar Currencies
UK stalls Lloyds public share sale plan August 14, 2014 | BBR http://retailbanking.banking-business-review.com/news/uk-stalls-lloyds-public-share-sale-plan140814-4343491 The UK government is reportedly set to stall the planned sale of its shares in Lloyds Banking Group to private retail investors next month in the wake of drop in the lender’s share price UK Chancellor George Osborne had revealed plans to sell a portion of the Treseaury's remaining 25% holding to private investors before the general election in May 2015. However, the government will have to wait until at least summer 2015 to launch the public sale of all the remaining government-owned shares, which are worth £13bn, as reported by The Guardian.
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Meanwhile, the Treasury is likely to continue sale of some of the bank shares it owns in Lloyds following its ÂŁ20bn bailout during the 2008 financial crisis, to institutional investors. A Treasury spokesman said: "The chancellor set out the government's approach to the state-owned banks in his Mansion House speech last year: we want to maximise support for the British economy, get the best value for money for the taxpayer and return the state-owned banks to private ownership. "Any decisions on share sales will be determined by value for money and market conditions." In 2013, the Treasury sold two portions of Lloyds shares to institutions for nearly ÂŁ7bn, thereby reducing the taxpayer's stake from 39% to 24.9%. Hargreaves Lansdown analyst Keith Bowman said: "The timing would be tight for a public offering. "But an institutional sale would be a smoother process, with previous sales passing off with few problems." Meanwhile, a Lloyds representative refused to comment on the government's plans to delay the share sale
DSB activates Emirates NBD and EIB into direct debit service August 11, 2014 | BBR http://payments.banking-business-review.com/news/dsb-activates-emirates-nbd-and-eib-intodirect-debit-service-110814-4340023 Dubai Smart Government (DSG) has announced the activation of Emirates NBD and Emirates Islamic Bank (EIB) into its direct debit service, which is heavily used for ePay and settling of Dubai government fees and services. The announcement is aimed at expanding the base of the public benefiting from the ePay service based on the agreement which DSG previously signed with Network International, electronic payment solutions provider in the Middle East. The recent inclusion of the two banks reflects Dubai's increasing pace of eTransformation aimed at building an integrated digital society in terms of offering a wide variety of electronic payment solutions to customers under the highest standards of privacy, security and credibility, while extending the number of banks participating in the service for easy procedures to both individual and corporate customers. Commenting on the step, H.E. Ahmad Bin Humaidan, DSG Director General, said: "The addition of more banks to the 'Direct Debit' service reflects the joint commitment to raise the bar of excellence with regard to banking electronic services provided to customers as per the highest standards of quality in line with the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to create a world-class smart government in Dubai to ease the life of all segments of the society and make them happy."
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"The positive effects of electronic payment are not restricted to supporting the national economy and providing customers with multiple options to ease their transactions but extend to environment sustainability, which is a mainstay for publicizing the green economy that H.H. Sheikh Mohammed called for in his future vision of the UAE when he launched the UAE green development strategy under the slogan 'Green Economy for Sustainable Development', a long-term national initiative aimed at converting the UAE into a leading global hub in the field of green development towards a green environment free of pollution resulting from customers' use of their cars and the effect of exhausts on global warming", Bin Humaidan added. Bin Humaidan affirmed that providing an electronic payment option for settling the fees of government services would contribute to reducing traffic jams, thereby substantially minimizing the waste of assets in favour of the green economy as a result of providing the service round the clock from anywhere through innovative electronic and smart channels. The ePay gateway allows individual and corporate customers to pay online for many services provided by the participating entitiesincluding paying DEWA bills and license renewal fees, recharging RTA's Salik and Nol cards, settling Dubai Police traffic fines and donating for Dubai Cares in addition to paying for medical fitness certificates and healthcare facility license renewals from Dubai Health Authority, either through credit cards or direct debit from customer's account with the seven participating banks: Commercial Bank of Dubai, Dubai Islamic Bank, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Union National Bank, Emirates NBD and Emirates Islamic Bank. Customers can also use e-Dirham G2 as another option for electronic payment. The design of DSG's ePay gateway allows it to be integrated with all the eServices of all Dubai government entities, no matter what technologies and software they use, thanks to its compatibility with all means of online payment, catering to the needs of the participating entities. Users can also browse the ePay gateway and make payments through their smart phones
Diebold to transform Bankia’s ATM fleet August 08, 2014 | BBR http://payments.banking-business-review.com/news/diebold-to-transform-bankias-atm-fleet080814-4338695 Diebold, Incorporated is driving an extensive update of the entire automated teller machine (ATM) fleet for Bankia, S.A., one of Spain's top financial institutions, through a comprehensive managed services project. Diebold will support Bankia to reduce the complexity of managing an assorted fleet of ATMs from different providers by providing multivendor, turnkey installation services for the project, including terminal audits, terminal pre-staging, software loading/testing, security module integration, signage and advertising deployment, ATM installation and ATM training for end users. Through these services-driven capabilities, Diebold will enable Bankia's channel transformation strategy for approximately 80 percent of its network by the end of the multi-year project. Bankia operates more than 2,000 branches and serves more than 7 million customers in Spain. The institution is implementing a universal banking model that will right-size its branch and ATM network, and increase self-service offerings to drive more customers to the lower-cost ATM channel.
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As part of the agreement, Diebold will be managing the installation of more than 2,100 ATMs in the initial phase of the project, including the deployment of approximately 900 new Diebold Opteva速 ATMs for the Madrid-based bank. Bankia's strategic plan calls for reducing its ATM network by 1,000 units to about 5,000 terminals by the end of 2015. Over the next two years, Bankia will eliminate multiple older terminals and replace others with more advanced terminals. "We are excited to support such an innovative customer. Bankia has identified the self-service channel as key to enhancing consumer services and operational efficiencies, resulting in a renewed and unique customer experience and an even more agile organization," said Bassem Bouzid, Diebold senior vice president and managing director of Europe, Middle East and Africa. "Diebold's advanced service capabilities and self-service technology will help the bank meet these goals. With this project, we continue to build the momentum we are creating in the services space, as we move forward with Diebold's growth in Spain and in the region."
Blackhawk Network, Barclays partner to bring Egift options for Pingit customers August 06, 2014 | BBR http://payments.banking-business-review.com/news/blackhawk-network-barclays-partner-tobring-egift-options-for-pingit-customers-060814-4335986 Blackhawk Network, a leading prepaid and payments network, announced a partnership with Barclays Bank PLC, one of the leading UK banks, to launch a wide range of eGifts onto its Pingit mobile banking service including entertainment, dining, gaming, fashion, health and beauty and leisure brands available to purchase as a gift or for self-use The launch on Android and iOS device applications is scheduled for later this month. Originally launched in early 2012, Barclays Pingit was Europe's first free service for sending and receiving money using only mobile phone numbers. It allows anyone over 16 years old to make speedy payments using just a mobile number. The service is connected to the bank accounts of Barclays customers, who in turn are able to send and receive funds. For non-Barclays customers, a digital wallet is created so easy payments, top-ups and withdrawals can be made. For its eGift proposition, Pingit utilises the latest cloud-based environments and dynamic wallet capabilities to deliver a fresh and innovative eGifting solution. The free service, available to UK consumers regardless of whether they have an account with the bank, has proven to be a popular mechanism for sending money to friends and family as well as small business and individual traders, who can receive payments from customers quickly, easily and securely. "Gifting through mCommerce is a leap forward for the payments market. For businesses, e-gifting is a cost-effective way to acquire new customers and maximize incremental spend," said Matthew Howe, managing director, Europe at Blackhawk Network. "For consumers, the ability to purchase and send gift cards across digital channels provides far greater ease and convenience than having to make a trip to a particular merchant to purchase a physical gift card." Available with top entertainment, fashion, dining and digital content brands, Blackhawk Network's gift card solutions benefit merchants by offering a broader customer acquisition channel, greater opportunity for incremental sales and the increased intelligence facilitated by easier customer data capture
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Finance Deutsche Bank, BayernLB agree to settle RMBS lawsuit August 15, 2014 | BBR http://retailbanking.banking-business-review.com/news/deutsche-bank-bayernlb-agree-to-settlermbs-lawsuit-150814-4344513 Deutsche Bank has reportedly agreed to pay $810m to Bayerische Landesbank (BayernLB) to settle a lawsuit over residential mortgage-backed securities (RMBS) A BayernLB spokesman said in a statement: "We have reached a basic agreement. The final settlement has yet to be agreed." In April 2012, BayernLB filed a lawsuit in a New York court alleging that Deutsche sold the bank securities that were backed by mortgages whose quality was internally disregarded as 'poor' by its employees. In the court filing, BayernLB said: "Deutsche Bank originated, purchased, financed and securitized exceptionally high-risk loans into these RMBS, all while internally disparaging the poor quality of these loans and the RMBS they backed as 'pigs' and 'crap." The complaint available on the court website was cited by The Wall Street Journal as saying that the German state-owned lender acquired large parts of securities between 2006 and 2007, shortly before the financial crisis. However, Deutsche Bank spokesman Duncan King dismissed the claims as 'unfounded' and noted that the bank would vigorously defend itself. Meanwhile, a Supreme Court of the State of New York judge also confirmed in a statement that the banks had agreed in principle to settle the case out of court, reported Reuters. A Deutsche Bank representative declined to comment on the report. Global banking gaints are facing numerous lawsuits in the US, which accuse them of selling faulty mortgage-backed securities and home loans to investors in the run-up to the 2008 financial crisis. Since 2011, the US Federal Housing Finance Agency (FHFA) has recouped $16.1bn, or nearly 11 cents per dollar of the underlying securities, according to Reuters
TPG to acquire majority stake in Union Bank of Colombo August 15, 2014 | BBR http://www.banking-business-review.com/news/tpg-to-acquire-majority-stake-in-union-bank-ofcolombo-150814-4344519 TPG Capital Management has signed an agreement to acquire a majority stake in Sri Lanka's Union Bank of Colombo (UBC) for $113m.
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Under the agreement, the company will buy up to 75% of UBC through a combination of primary and secondary shares and warrants, in what is billed as one of the largest foreign direct investments into Sri Lanka in recent years. The exercise of the warrants is expected to take the value of the transaction to $117m. TPG Asia managing partner and co-head Tim Dattels said: "As a strategic and first-time investor in Sri Lanka, we are very encouraged by the country's economic growth momentum and the Central Bank's policy initiatives to enhance the country's banking sector. "We see great growth potential in Union Bank to emerge as one of the top five local commercial banks in the country." Union Bank chairman Alex Lovell said: "TPG is one of the leading and most experienced private investment firms with an unrivalled investment track record in the financial services sector in Asia. "Union Bank will be able to tap into TPG's operational expertise and global resources to not only strengthen Union Bank's balance sheet but also introduce new products and expand our network in order to offer better services to our customers." The transaction is expected to strengthen the UBC's Tier 1 capital and enable the bank to meet the minimum capital requirement of LKR10bn ($768m) set by the Central Bank of Sri Lanka, effective January 2016
HUD Fines Freedom Mortgage for Disability Discrimination August 13, 2014 | National Mortgage Professional Magazine http://nationalmortgageprofessional.com/news51069/HUD-Fines-Freedom-Mortgage-DisabilityDiscrimination The U.S. Department of Housing and Urban Development (HUD) has announced that Freedom Mortgage Corporation will pay $104,000 to settle allegations that it discriminated against loan applicants with disabilities by requiring them to provide medical or other documentation regarding their disability. The Fair Housing Act makes it unlawful to discriminate in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, family status, or disability. This includes requiring persons with disabilities to provide medical or other documentation not required of mortgage applicants who are not disabled. “Applicants who are otherwise qualified for a home loan may not have additional requirements placed on them because of a disability,” said Gustavo Velasquez, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "We are pleased that this national mortgage lender, through the agreement, is making a commitment to comply with its obligation to treat persons with disabilities the same way they treat those who are not disabled.” The agreement settles a HUD Secretary Initiated Complaint filed in 2013, alleging that Freedom Mortgage’s underwriting policies and practices subjected persons with disabilities to different terms and conditions from other applicants by requiring, among other things, that they provide doctor’s notes or letters from the Social Security Administration that their disability income would continue for three years. Freedom and HUD identified 69 applicants with disabilities subjected to such terms and conditions.
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In one case, a loan applicant provided medical documentation of his disability, a Department of Labor Work Capacity Evaluation form, and a benefits statement showing regular disability payments since 2009. Nonetheless, Freedom Mortgage allegedly continued to request proof that the income would continue for at least three years. Under the terms of the agreement, Freedom will establish a three-tiered system of relief for the 69 aggrieved applicants. Under the tiered system, they will each receive $1,000, $2,000, or $5,000 in damages. In addition, Freedom will amend its underwriting guidelines to abolish disability-related income verification requirements for applicants who receive disability income, and require employees to attend training on the Fair Housing Act.
Standard Chartered to face additional US fines over money-laundering controls August 07, 2014 | BBR http://retailbanking.banking-business-review.com/news/standard-chartered-to-face-additionalus-fines-over-money-laundering-controls-070814-4337417 The US regulators are likely to impose an additional fine on Standard Chartered over problems in its anti-money laundering systems and controls. Standard Chartered said the proposed fine comes after New York financial regulators identified new problems with the bank's surveillance system. The problems might also lead to remedial action and an extension of a two-year monitoring period, which was imposed in 2012 after the bank was fined $667m by US regulators for allegedly hiding multi-billion dollar transactions with Iran, reported Reuters. Speaking to reporters, Standard Chartered chief executive Peter Sands said the latest problems were related to computer surveillance faults and were less serious than those spotted earlier. "We do not believe the impact to be of the same scale as the very different issues the group faced two years ago," Sands added, noting that the penalty should be less than the $340m paid by the bank in 2012. The revelation comes as the London-based bank reported a 20% earnings decline in half-year profits. The bank's pretax profit, excluding adjustments to the value of its own debt, fell to $3.3bn from $4.1bn in the year-earlier period. Commenting on results, Sands said: "Our performance this first half is clearly disappointing. "We're taking action on multiple fronts, both in response to near term pressures and to execute our refreshed strategy, with the objective of getting back to a trajectory of sustainable, profitable growth."
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HSBC's H1 pre-tax profit down 12% August 05, 2014 | BBR http://retailbanking.banking-business-review.com/news/hsbcs-h1-pre-tax-profit-down-12050814-4334718 The British bank HSBC has reported a 12% decline in its half-year pre-tax profits to $12.3bn from $14.1bn the same period a year ago. The lender said the decline was due to a number of significant items. Net interest income declined to $58m compared with $64m in the same period in 2013, and while operating expenses rose 2% to $18.24bn. The bank's underlying revenue fell 4% to $31.36bn from $32.7bn, while its commercial banking revenue continued to grow, with a good performance in Asia. A pre-tax profit of $565m for the second quarter was reported, down by about $250m compared to the year ago period. The bank's total payment protection insurance (PPI) provisions have increased by ÂŁ66m ($111m), bringing the running total since April 2011 to ÂŁ2.1bn. HSBC Group chief executive Stuart Gulliver said: "These results demonstrate the resilience of our business model. Whilst regulatory uncertainty persists, our balance sheet remains strong and our continuing ability to generate capital supports both growth and our progressive dividend policy."
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Technology TD Bank launches mobile check deposit feature for business customers August 15, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/td-bank-launches-mobile-checkdeposit-feature-for-business-customers-150814-4344613 TD Bank, America's Most Convenient Bank, has introduced mobile check deposit through the TD Bank BusinessDirect app for Android™ and iPhoneŽ devices, making it easier for business customers to deposit checks into their accounts on-the-go. Available to all TD Bank customers who are enrolled in BusinessDirect - TD Bank's online banking for business owners - for at least 90 days, the added feature allows customers to deposits checks via the BusinessDirect mobile app on their smartphones, anywhere and anytime they choose. "We continue to enhance our online and mobile capabilities to adapt to our customers' changing banking needs," said Ravi Subbaraya, Head of Business Banking Products at TD Bank. "The ability to deposit checks through our mobile app helps small business owners save time that they can, in turn, invest in their business. Their checks get paid faster and that accelerates their cash flow." To use the mobile check deposit feature, customers can download or update their version of the TD Bank BusinessDirect app from the Google Play or iTunes stores. Customers are able to make a deposit following a simple, three-step process that includes selecting the deposit amount, photographing the front and back of the check, and, selecting the account to receive the deposit. Funds deposited before 8:00 p.m. Eastern Time are generally available the next business day. TD Bank Small Business ranks highest in J.D. Powers' Small Business Customer Satisfaction Northeast survey and was named Money Magazine's "Best Big Bank in America" for 2013
Faisal Islamic Bank of Egypt selects SunGard risk management solutions August 13, 2014 | BBR http://riskmanagement.banking-business-review.com/news/faisal-islamic-bank-of-egypt-selectssungard-risk-management-solutions-130814-4342811 Faisal Islamic Bank of Egypt, the first Islamic Bank in Egypt, has selected SunGard’s suite of enterprise risk management solutions to help build a new operational framework for improved risk exposure, reporting and Basel compliance. The bank is an active participant in the country's development projects and a leading player in the Egyptian banking sector which strives to maintain best practices in the region. As part of this, the bank recognized a need to transform its risk infrastructure to comply with international and domestic regulatory standards. The bank plans to centralize all of its risk activities using the SunGard solution suite, which will help the bank identify, measure, monitor and manage risk more effectively. This will also help provide more accurate insight to support investment decision making.
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Automating and centralizing its manual risk management processes will help the bank increase risk exposure transparency and reduce reporting time. The bank will also benefit from the solutions' best practice, out-of-the-box risk reporting and monitoring to help improve balance sheet management and drive value from more sophisticated, forward looking analysis. The bank will also leverage the suite for improved Basel compliance. "As a pioneer of Islamic banking in Egypt, when evaluating our risk and compliance requirements, we wanted to implement a solution that would help enhance not only our compliance capability but our competitiveness in this market. SunGard provides us with a fully comprehensive solution suite underpinned by global and local best practice and standards. We hope that the company's strong footprint in the Middle East and proven implementation success in Islamic Finance will be key to helping us improve our risk management practices, particularly with the automated measurement of regulatory capital for Basel compliance in credit, market and operational risk."- Mr. Mohammed Abdulalim, sector head of risk management, Faisal Islamic Bank of Egypt "Banks that continue to run legacy risk management systems face challenges in meeting today's risk and compliance requirements. Coupled with increasing Central Bank pressure to comply with international standards, we see these as key drivers to a wave of risk management transformation in the Egyptian banking sector. Faisal Islamic Bank of Egypt is taking steps to upgrade its operational capabilities and our technology will help them drive competitive advantage from their risk and compliance initiatives." - Wissam Khoury, managing director, Middle East, SunGard
Middle Eastern and North African banking and securities firms’ software spending to grow in 2014, says Gartner August 11, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/middle-eastern-and-north-africanbanking-and-securities-firms-software-spending-to-grow-in-2014-says-gartner-110814-4340037 Banking and securities companies in the Middle East and North Africa will spend approximately US$13.2 billion on IT products and services in 2014, an increase of 2.7 percent over 2013 revenue of nearly $12.8 billion, according to Gartner, Inc. This forecast includes spending by banking organizations on internal IT services (including personnel), IT services, software, data center technologies, devices and telecom services. Telecom services will be the largest segment in overall IT spending in the banking and securities market at $5.7 billion in 2014. This segment is forecast to increase 0.6 percent compared to 2013. Software and IT services are the fastest growing segments with 9.2 and 8.4 percent increases in 2014, largely due to the expansion strategies of banks across the region and to modernization and replacement projects of the back-office that require a lot of consulting and system integration. Outsourcing is also picking up, as it's one of the fastest growing segments within IT services. "The outsourcing of IT, as well as business processes, have become more common across some Gulf countries. This market is still far from mature, but it is already a good start and miles ahead compared to a decade ago," said Vittorio D'Orazio, research director at Gartner. "Business process outsourcing (BPO) is expected to have a strong growth at 12.6 percent in 2014, while IT outsourcing is forecast to increase 8.5 percent from year."
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"Software spending is being driven by the replacement trend of back-office systems, especially from the larger banks, while newer banks are being created from the scratch which opens a lot of new opportunities for IT vendors, " said Mr D'Orazio
IBM to manage Fidelity Bank’s technology infrastructure August 08, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/ibm-to-manage-fidelity-bankstechnology-infrastructure-080814-4338682 At the U.S. Africa Business Forum in Washington, D.C, Ghana's Fidelity Bank announced its choice of IBM to manage its technology infrastructure and services. The five year deal will help the bank deliver advanced customer services and secure its reputation as a dynamic financial services institution in West Africa. Currently one of the largest banks in Ghana, Fidelity Bank Ghana Limited is seeking to enhance its operational efficiencies as it embarks on a new strategic direction, developing growth plans and strategies for new markets, products and services. Fidelity Bank pioneered agency banking in Ghana, contracting third party retail networks called Fidelity Smart Agents to provide services on its behalf, with the objective of offering the full benefits of its services and products to the unbanked and under-banked in the country. Fidelity Bank was licensed by the Bank of Ghana (BoG), the local industry regulator, in 2006; and has made tremendous strides in the past 7 years to become a Tier1 Bank. The quality of its product offerings and its high professional standards has propelled its franchise into a leading Ghanaian brand. The bank now has a balance sheet of USD $1billion (approx.). Fidelity Bank's choice of IBM to manage the administration and governance of its technology assets and operations will further entrench its position as a leading, financial institution in West Africa The aim of the technology management services deal is to ensure stability in the bank's operations nationwide and help drive its projected exponential growth, as it seeks to become one of Ghana's top 3 banks in the next 5 years. To support the bank's goals, IBM will combine local and international expertise, including round-theclock technical support from IBM's international Global Delivery Centers to ensure the bank achieves cross-channel integration and a seamless customer experience across all its touch-points. The IBMmanaged services will cover a broad spectrum of the bank's IT functions, including management of its server, security, storage, networks, end user services, branch IT support, ATM infrastructure support and datacenter services. Ghana is one of Africa's fastest growing economies, according to the World Bank. "Our bank enjoys an exceptional reputation that results from the dedication and hard work of our employees and our incomparable products and services," said Edward Effah, Managing Director, Fidelity Bank. "In the rapidly changing Ghanaian banking industry, with far more players and competition than ever before, consumers are entitled to expect benchmark service and protection from these unique market challenges. It is my belief that our partnership with IBM will enable us to deliver and exceed these stakeholder expectations."
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The Ghanaian lender earlier chose IBM's datacenter solution for a successful retooling and upgrade of its technology assets. "The economy is going through a unique phase in its evolution and increasingly we are seeing that the appropriate deployment of technology solutions and services in the nation's financial services sector will be key to boosting the growth momentum already achieved in the sector and by extension in the macro-economic environment," said Joe Mensah, Country General Manager, IBM Ghana. The list of banks around the world turning to IBM for support continues to grow. Whilst 70% of the world's data is managed on IBM systems, 95 of the top 100 banks worldwide use IBM business or technology services to run their business. IBM has also announced more than 20 banking deals throughout Africa over the last five years, with Kenyan, Ghanaian, Nigerian and Congolese banks turning to IBM for world-class IT solutions. In Nigeria, IBM plays a significant role in the ongoing reforms in the financial services sector. 80% of Nigeria's banks now run on IBM's enterprise server architecture. IBM has a long history in Africa, and is taking its role as a technology leader seriously, helping to boost the capacities of Africa's people and institutions. Just last year, IBM opened its first African Research Laboratory, the 12th globally and part of IBM's $6 billion annual spend on research alone. In the past 5 years, the company has set up offices in Angola, Mauritius, Tanzania, Senegal, Ghana, Nigeria and Kenya and now has more than 20 subsidiaries on the continent. "Changing economic conditions and oversight regulatory requirements are turning old arguments against outsourcing upside down as organizations seek ways to cut costs. In West Africa, the need for organizations to focus on their core business competencies while outsourcing their IT challenges to a trusted third-party service provider, may be a game changer to reduce overall operating cost. Fidelity Bank's decision to go with IBM in this huge IT Outsourcing deal will definitely send a strong signal to the banking sector that IT outsourcing is the way to go," said Bola Adisa, Country Regional Manager, IDC West Africa. A robust IT operating environment managed by IBM will help Fidelity management concentrate on Business Strategy and enable the bank to pursue its aggressive growth strategies
United Bank of Michigan selects Wolters’ ComplianceOne Manager August 06, 2014 | BBR http://riskmanagement.banking-business-review.com/news/united-bank-of-michigan-selectswolters-complianceone-manager-060814-4335991 Wolters Kluwer Financial Services announced that United Bank of Michigan, a long-time user of the ComplianceOne loan and deposit origination and workflow system, has implemented ComplianceOne manager, the company's Software as a Service-based business process management, or BPM solution, to help automate lending workflows and reduce regulatory risk. According to Cindy Lowman, president of the United Bank Mortgage Corporation, the bank chose ComplianceOne manager to help meet the demands of regulators and business partners for increased data reporting and audit tracking capabilities. Compliance with each of these was becoming more challenging because of the bank's manual, paper-based reporting processes.
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"ComplianceOne manager has become the eyes and ears of our offsite staff, giving them access to loan information without the actual paper file," said Lowman. "The result is fewer bottlenecks in the lending pipeline, faster processing times, reduced administration time and more responsive customer service." In addition, Lowman says the solution's compliance tracking feature helps assure that the bank meets all compliance requirements. ComplianceOne manager helps users recognize which tasks are the bank's top priorities at any given moment, and ensures that each step in the documentation process is completed on time and meets regulatory requirements. "Implementing a BPM solution helps financial institution's gain better process visibility. With the ability to monitor loan portfolios in real time, financial institutions can proactively detect and respond to changes in the marketplace before they erupt into serious business or compliance issues," said Lisa Fraga, vice president and general manager, Banking Solutions, Wolters Kluwer Financial Services. ComplianceOne manager helps organizations continually operate at optimal business levels by treating lending workflow processes as strategic assets that directly contribute to overall enterprise performance. Another advantage of ComplianceOne manager is that it encourages better collaboration among employees. Lending officers, underwriters and loan processing staff all have access to the same information, so they can work together more effectively. As a result, financial institutions can engage more freely with customers, respond to their queries faster, decrease cycle times and errors, and focus on the right customer-centric business tasks-all of which are prerequisites to achieving higher customer satisfaction levels. ComplianceOne manager can be used on its own, with Wolters Kluwer Financial Services' ComplianceOne or ARTA Lending solution, or with another loan origination system
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Strategy RBS confirms plans to offload Coutts International August 12, 2014 | BBR http://www.banking-business-review.com/news/rbs-confirms-plans-to-offload-coutts-international120814-4340862 Royal Bank of Scotland (RBS) has reportedly confirmed plans to sell intenrational operations of its private banking and wealth management unit, Coutts The Switzerland-based Coutts International serves clients in Asia, Europe and the Middle East, and employees 12,000 people in seven countries. The UK state-backed lender said in a memo to staff: "We will...work with local management teams to explore options including merging the remainder of the current Coutts International business, considering joint ventures or a sale, thereby reducing RBS's footprint internationally. "There are no immediate changes for individuals in these businesses and it is important that we continue to work together to deliver for our customers." Two sources with knowledge of matter were quoted by Reuters as saying that Coutts International has attracted proposals from a range of bidders, including unnamed Asian and North American banks. Another source said RBS would recieve between $720m and $1.1bn from the sale, based on a multiple of 2 to 3% of assets under management. Coutts's international operations were slimmed down two years ago following the acquisition of its Latin American, Caribbean and African private banking units by the Royal Bank of Canada. Meanwhile, an RBC spokesman could not be reached for comment on the potential sale. In February, RBS had announced that Coutts would be integrated with its UK commercial lending business to better connect it with wealthy entrepreneurs. However, the lender says that the international unit would find to difficult to hit a profitability target of 15% return on equity "given the dynamics of compressed margins and the increasing need for scale in international businesses." Coutts International is among 100 Swiss banks being investigated by the US regulators for allegedly helping wealthy US citizens evade tax by hiding their assets in secret bank accounts
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SARB to rescue Abil with nearly $1bn capital injection August 11, 2014 | BBR http://retailbanking.banking-business-review.com/news/sarb-to-rescue-abil-with-nearly-1bncapital-injection-110814-4339482 The South African Reserve Bank (SARB) has placed African Bank Investments Limited (Abil) under curatorship, in a bid to rescue the crisis-hit lender The Pretoria-based SARB has also confirmed a plan to provide nearly $1bn as capital injection to Abil, which is set to be split into 'good' and 'bad' banks. South African Reserve Bank governor Gill Marcus said: "The curatorship is a protection procedure which gives the SARB the legal means to create the necessary space to implement a resolution plan capable of ensuring that the business of African Bank gains a secure perspective for the future as a lending institut ion with a transformed business model "The Minister has appointed Mr Tom Winterboer as the curator . He will be responsible for African Bank with immediate effect , with the full authority the law confers on the curator." With a book value of R26bn ($24.3bn) net of portfolio impairment, the good bank would be recapitalized by a R10bn ($9.3bn) capital raising underwritten by a consortium comprising Absa Bank, Capitec Bank, FirstRand Bank, Investec Bank, Nedbank, Standard Bank, and the Public Investment Corporation ( PIC). Meanwhile, the bad book, which comprises a substantial portion of the non - and under - performing assets worth nearly R17bn ($15.9bn) would be acquired by SARB. Commenting on support measures being implemented by SARB, Marcus said: "These will further strengthen the resilience of the banking system as a whole, and, importantly, they will provide African Bank with the best chance of a viable future." The Johannesberg-based Abil has been recently hit by waves of bad loans, posting an estimated headline loss of R6.4bn ($6bn) for the full year to September 2014. Marcus said: "The problems that have beset African Bank are, in our view, largely specific to their current business model, which does not include a diversified set of products and income streams, nor does it offer transactional banking services."
Banca Veneto agrees to sell 51.4% stake in Bank of Intermobiliare August 08, 2014 | BBR http://www.banking-business-review.com/news/banca-veneto-agrees-to-sell-514-stake-in-bankof-intermobiliare-080814-4338860 Italian cooperative bank Banca Veneto has signed an agreement to sell a 51.4% stake in private banking unit, Bank of Intermobiliare Investment and Management (BIM), for â‚Ź289m.
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The stake was acquired by a consortium of investors comprising Gestinter, MA.VA. Company, Duet BIM, SerendipEquity BIM, MI.MO.SE, Romed, Piovesana, Pietro, DAD & SON, Building, Cruiser Srl, Gianfranca Cradled, Serfin Services Financial Srl, Alessandro Federici, Nasi Valentina and Luca Cordero di Montezemolo. The sale forms part of an intiative to strengthen the lender's capital base. After the transaction is completed, Veneto Bank will retain a stake of about 20% in the share capital of BIM. Veneto Banca president Francesco Favotto said: "The sale of BIM is the last of the major milestones of the capital strengthening plan launched in November 2013. "With this step our CET 1 is now well beyond the safety threshold set by the ECB." The transaction is subject to obtaining the provision from the Bank of Italy, and a public tender offer is scheduled to be launched in the first half of 2015. Banca Intermobiliare is currently worth around â‚Ź480m on the market, reported Reuters. Meanwhile, the bank has also signed an agreement for the sale 55% of the share capital of Banca IPIBI Financial Advisory (IPIBI), which along with BIM stake sale is expected to add 73 basis points to the lender's Common Equity Tier 1 capital ratio
BofA, DoJ close to residential mortgage disputes settlement August 07, 2014 | BBR http://retailbanking.banking-business-review.com/news/bofa-doj-close-to-residential-mortgagedisputes-settlement-070814-4336879 Bank of America (BofA) is reportedly close to signing a $16bn to $17bn agreement with the US Department of Justice (DoJ) to resolve the long-running defective residential-mortgage-securities sale investigation Unnamed people with the knowledge of matter were quoted by The Wall Street Journal as saying that the bank has agreed to pay nearly $9bn in cash to the US government, states and other government entities. The agreement is likely to be finalized this month, the sources added. Meanwhile, the bank would pay the remaining money in consumer relief, such as reducing mortgage balances for struggling homeowners. Settlement talks between BofA and the US regulators were stalled after the DoJ disagreed with the bank's proposal to pay a bigger portion of the fine in so-called soft money. While, BofA initially offered to pay $13bn, including cash and consumer relief, the DoJ sought heftier cash penalty settle probe into alleged sale of private-label mortgage-backed securities by the North Carolina-based bank in the run-up to the 2008 financial crisis. BofA spokesman Lawrence Grayson declined to comment on the report.
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If finalized, the agreement would be the largest penalty paid by any bank for sale of shoddy mortgages, surpassing a $13bn deal agreed by DoJ and JPMorgan Chase over similar issues, early this year. BofA had agreed to pay nearly $6bn to the Federal Housing Finance Agency (FHFA) earlier this year over similar mortgage issues. In addition, the bank also reached a $650m agreement with American International Group (AIG) to settle the defective mortgage-backed securities litigation
UniCredit agrees to buy RBS Romania’s corporate business August 06, 2014 | BBR http://www.banking-business-review.com/news/unicredit-agrees-to-buy-rbs-romaniascorporate-business-4335410 UniCredit Tiriac Bank has signed an agreement with the Royal Bank of Scotland (RBS) to acquire its Romanian corporate business portfolio for undisclosed amount Under the agreement, RBS Romania will transfer a total portfolio of aggregate assets of around €260m, and corporate deposits of nearly €315m to UniCredit. RBS Romania's client portfolio comprises more than 500 mid market and large private corporates, local and international, as well as public and financial institutions. UniCredit Tiriac Bank CEO and UniCredit Romania country chairman Rasvan Radu said: "This new portfolio acquisition represents another natural step for us, as UniCredit - leading European banking group - is committed to sustainable growth on the Romanian market. "After the acquisition of the Retail and Royal Preferred Banking business from RBS Romania last year, the full integration of the Corporate portfolio is a very suitable choice, as both banks share common values of business excellence and customer centricity. "Corporate represents a core business for us and this development perfectly fits our strategy in the medium and long-term, while at the same time consolidating our leading position in the market." RBS Romania CEO and RBS Central and Eastern Europe hub executive Henk Paardekooper said: "We are confident that this will bring a lot of benefits and added value to our clients. "Our customers are very important to us and we would like to ensure them that UniCredit Tiriac Bank will take over and build on the relationship we have developed with them." The two banks have confirmed that the clients' contractual conditions and to the technical details of their respective products and services will remain same despite transaction. Scheduled to be finalised after receipt of the necessary approval by the Competition Council, the transaction is subject to consultation with the social partners and is expected to complete in the coming months
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