Sutherland insights banking news flash july 01, 2014

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BANKING NEWS FLASH July 01, 2014


Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 7 Technology .......................................................................................................................... 11 Strategy .............................................................................................................................. 16

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Sales & Marketing ANZ considering physical commodity trading business expansion June 30, 2014 | BBR http://ecnandexchanges.banking-business-review.com/news/anz-considering-physicalcommodity-trading-business-expansion-300614-4305374 Australia and New Zealand Banking Group (ANZ) is reportedly considering expansion of its physical commodity trading business, in a bid to fill the gap created by the retreat of major Wall Street and European banks A source with the knowledge of matter was quoted by Reuters as saying that the bank is all set to submit a proposal to launch a physical commodities trading desk to its risk committee and board in July. “With the exit of big U.S banks from the business of physical commodity trading, we see an opportunity to get into that business,” the source added. The proposal, which aligns with ANZ’s “super regional” strategy, will include options for the bank to operate in all aspects of the supply chain, from sourcing to warehousing and freight contracts, unlike the current gold and silver trading. The commodities that the bank would trade, however, remain undisclosed. Unnamed ANZ sources told the news agency that the bank is expanding its suite of services to serve its biggest corporate customers and offer specialized services to them. An ANZ spokesman refused to comment on the report. Claimed to be the third-largest importer of gold into China, ANZ’s commodities unit provides risk management services through its eight locations worldwide, and handled 15% of global physical bullion turnover as at end June 2013. Major global banks are scaling back their physical commodities trading businesses in the wake of increasing capital requirements, regulatory scrutiny and weak margins. While JPMorgan Chase and Morgan Stanley sold large parts of their physical trading businesses, Barclays and Deutsche Bank are quitting the commodity markets, according to the news agency

HSBC to sell Swiss private banking assets portfolio to LGT Bank June 25, 2014 | BBR http://www.banking-business-review.com/news/hsbc-to-sell-swiss-private-banking-assetsportfolio-to-lgt-bank-250614-4301491 HSBC Private Bank (Suisse) has signed an agreement to sell a portfolio of its Swiss private banking assets to LGT Bank, a wholly-owned subsidiary of the LGT Group Foundation

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LGT Bank said in a statement that the transaction includes more than CHF10bn ($11.2bn) in assets under management (AuM) and around 70 employees, with majority being client relationship managers across Switzerland. The acquired business is distributed amongst various teams, each focusing on high-net-worth (HNW) and ultra high-net-worth (UHNW) clients from a specific geographic region, notably Central and Eastern Europe, Latin America and Western Europe. It will be integrated into LGT Bank, which had AuM of CHF21bn ($23.4bn) year ending 2013, the statement added. HSBC spokesman Patrick Humphris was quoted by Bloomberg as saying that the transaction forms a part of the company’s growth strategy, and completes the strategic repositioning of the Swiss private bank. “It’s not about pulling back from private banking and it’s not about pulling back from Switzerland in any way,” Humphris added. Claimed to be the Europe’s biggest bank by market value, HSBC has also ensured its commitment to Switzerland as a key international center for its global private banking business. HSBC’s Swiss private banking unit is among several banks being investigated by the US Justice Department for their alleged role in tax evasion by some US citizens, according to the news agency. LGT said: “The assets to be acquired have undergone rigorous tax and general compliance procedures.” Subject to regulatory and other approvals, the transaction is expected to complete in the last quarter of 2014. HSBC has either shut down or sold more than 60 businesses over the past three years, as chief executive officer, Stuart Gulliver focuses on the bank’s most profitable markets and controls costs

ABN Amro set to open up asset-based lending for UK businesses June 23, 2014 | BBR http://retailbanking.banking-business-review.com/news/abn-amro-set-to-open-up-asset-basedlending-for-uk-businesses-230614-4299381 State-owned Dutch bank ABN Amro is set to announce plans to open up asset-based lending for UK businesses, with the target of a 5% market share, to help capitalize on the growth in the sector ABN Amro UK leasing business head George Ashworth was quoted by The Financial Times as saying that a total of £21.5bn of asset-based lending was available for businesses in the UK, and accounts for about 30% of all business investment excluding property. “We are expecting asset-based lending to grow in the coming years, as the liquidity crisis over the past few years means there is a lot of pent-up demand,” Ashworth added, noting that the financing type has been used by 40% of all UK businesses with debts. “It is a useful way for companies to save cash when they make an investment, by spreading the cost over time.”

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Approximately £5.1bn of asset-based finance has been raised by the larger UK companies with more than £100m of revenue until March 2014, which represents a 16% increase on the previous year and a fivefold rise over the past decade, according to the Asset Based Finance Association (ABFA). ABFA chief executive Jeff Longhurst said: “Asset-based lending was once seen as only for distressed companies or smaller companies, but now it is coming of age.” The UK asset-based lending market is currently dominated Barclays, Lloyds Banking Group, Royal Bank of Scotland and HSBC, which alone controls about 80% of the market. ABN’s UK business already offers clearing, commodities brokerage, as well as corporate banking and other services to corporate and institutional clients. Besides UK, the bank is looking at expanding its leasing operations to Germany as it seeks to broaden its global activities to a fifth of the group’s revenues before the planned initial public offering in 2015

Raphaels Bank makes prepaid card hires June 20, 2014 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=55712 In response to a growing demand for its expertise in the growing prepaid card market, Raphaels Bank Card Services has made two significant appointments. Emily Utton, has been appointed Senior Relationship Manager and Alex Reddish has joined the business as Relationship Manager. The appointments round off a rapid period of growth for the Raphaels Bank Card Services team which has tripled in size in just 18 months. The team’s expansion is in response to increasing demand for Raphaels’ leading edge and innovative prepaid card programmes, including the recently launched RAC membership loyalty card. Emily Utton has joined Raphaels Bank after five years at Paypoint, where she was an Account Manager, looking after the energy sector. Prior to that, she was Account Manager at the Home Retail Group. Although Emily is new to prepaid, she has extensive experience as a relationship manager in the payments industry. Joining Emily, Alex Reddish has joined the team as Relationship Manager, moving after two years as Relationship Manager at Ukash. He has a long family history in prepaid and did his final dissertation, at Roehampton University, on the future of prepaid. Raphaels Bank has also moved existing key talent into new positions within the Card Services team. The role of Business Development Manager held by Emily Baum has now expanded to include Marketing. Emily has been with Raphaels Bank for over a year and prior to that was a Prepaid Programme Manager for five years, specialising in loyalty. Emily owned her own retail business for seven years, ahead of joining the prepaid market, bringing a valuable mix of skills as these three areas start to play a large part in the growth of the payments market moving forward. Janet Johnston has expanded her role as Head of Operations to include Relationship Management. Janet has been with Raphaels for three years, initially heading up Operations. Susan Jordan is now Head of Compliance and Legal, moving from Head of Programme Delivery. With six years’ experience at Raphaels and previous experience as a Senior Risk Manager for the American Express Prepaidid team, Susan is a natural fit for the expanding Card Services team.

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Andy Downes, General Manager, Card Services at Raphaels Bank comments, “As a leading player in the European prepaid card market, it’s essential that we continue to invest in the best talent to focus on our growth in this sector and drive innovation. We are now working with some major global brands to create attractive schemes that benefit our partners and their customers. This is a very exciting period in our growth and with the expertise of this newly expanded team, Raphaels Bank Card Services is set to go from strength to strength.”

BNP Paribas and Orange join forces on African mobile banking June 17, 2014 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=26173 BNP Paribas and Orange have teamed up to allow customers in Africa to use their handsets to transfer money directly between their bank and mobile accounts. Initially launching in Côte d’Ivoire, with other countries such as Senegal to follow, the service is designed to combine the relative strengths of BNP Paribas and Orange Money. By linking their accounts to Orange money, the partners say BNP customers will be able to take advantage of the latter’s ability to buy goods and services, pay utility bills and purchase airtime credit via a mobile phone. In addition, the network of licensed Orange Money distributors will supplement BNP Paribas’s branches, increasing the number of cash withdrawal points for customers, particularly in more remote areas. Meanwhile, Orange Money customers will get the chance to access new banking services such as savings accounts and international bank cards. Thierry Millet, director, payments and contactless programme, Orange, says: “The synergies of our businesses will make it easier for customers to manage their money, wherever they are in the country and at any time of the day.”

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Finance BNP Paribas agrees to pay $8.97bn to settle US sanctions violations probe July 11, 2014 | BBR http://retailbanking.banking-business-review.com/news/bnp-paribas-agrees-to-pay-897bn-tosettle-us-sanctions-violations-probe-010714-4306570 BNP Paribas has agreed to pay a penalty of $8.97bn to the US authorities to resolve investigation relating to US dollar (USD) transactions involving parties subject to the US economic sanctions The French bank also pleaded guilty to conspiring to violate the international emergency economic powers act (IEEPA) and the trading with the enemy act (TWEA) by processing more than $8.8bn through the US financial system on behalf of Sudan, Iran, and Cuba between 2004 and 2012. The agreements were signed with the US Justice Department, US Attorney’s Office for the Southern District of New York, the New York County District Attorney’s Office, the US Federal Reserve System (FED), the New York State Department of Financial Services (DFS), and the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). As part of the agreements, the bank will pay $8.97bn, including forfeiture of $8.83bn and a fine of $140m. US Justice Department Criminal Division assistant attorney general Leslie Caldwell said BNPP helped Sudanese, Iranian, and Cuban individuals and entities gain illegal access to the US financial system by providing dollar clearing services, which is a clear violation of the US law. “Remarkably, BNPP continued to engage in this criminal conduct even after being told by its own lawyers that what it was doing was ill,” Caldwell added. BNP Paribas CEO Jean-Laurent Bonnafe said the bank deeply regrets the past misconduct that led to the settlement. “We have announced today a comprehensive plan to strengthen our internal controls and processes, in ongoing close coordination with the US authorities and our home regulator to ensure that we do not fall below the high standards of responsible conduct we expect from everyone associated with BNP Paribas,” Bonnafe added. Apart from establishing a US Group Financial Security department in New York to ensure that the bank complies globally with US regulation related to international sanctions and embargoes, the bank also agreed that the department will ultimately process and control all USD flows for the entire BNP Paribas Group. In addition, the bank accepted a temporary suspension of one year beginning 01 January 2015 of the USD direct clearing focused mainly on the oil and gas energy and commodity finance business line in certain locations

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NatWest, RBS committs more than £1bn to improve banking services June 30, 2014 | BBR http://www.banking-business-review.com/news/natwest-rbs-committs-more-than-1bn-toimprove-banking-services-300614-4305946 NatWest and RBS are investing more than £1 billion into personal and small business banking in the next three years with the aim of becoming the most trusted and recommended bank for UK customers. The investments will concentrate on the bank’s digital services to make it easier for customers to bank while on the move, and accompanies bank-wide moves to improve the resilience of NatWest and RBS systems. Improvements will include: •

customers will be able to view and amend regular payments, and track their Cashback Plus reward balances, on their mobile without using online banking

integration of the personal and small business banking mobile apps so customers with both types of account can see and make transactions in both via one app

Online Banking will be more intuitive for customers, tailoring content to the individual •

more than 400 branches will be upgraded across the UK, fitted with new technology, including iPads, to register for and access Online Banking. Customers will also be offered free Wi-Fi access to use their own digital devices in branch

almost 100 new ATM locations will be introduced across the UK, including in railway stations, to increase the number of places customers can access their cash

nearly 600 new Cash and Deposit machines (CDMs) will be placed in branches for customers, enabling quick and easy paying in of cheques, cash and coins

improved systems will allow staff to see all of a customer’s interactions with the bank, enabling them to understand the customer’s situation and advise them better

The focus of the bank’s investment is driven by a dramatic increase in customers’ use of online and mobile technology for banking, which has grown by over 200% in the last three years. Les Matheson, CEO of Personal and Business Banking, said: “Our customers’ needs are rapidly changing: they want to bank day-to-day in the most convenient ways available. We must respond to their needs and continue to improve on the service we offer both online and on mobile. “Our branch network also plays an important role in delivering a great service for our customers. We’re investing in branches to make it easier for customers to have good conversations with our staff when they need our help, and in our processes so banking with us is simple and straightforward. “A bank that customers feel they can trust is a bank they look to when they need to make bigger financial decisions, such as buying their first home or starting a business. My business challenge is simple. I need to make changes to the way we do business so that our customers do more business with us.”

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Vishing fraud nets £21 million in first five months of 2014 June 27, 2014 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=26209 In the first five months of this year, some of the UK’s main high street banks have reported losses of over £21 million from vishing attacks, wherein consumers are tricked into handing over personal financial information. The fresh data equates to over 2000 vishing attacks resulting in an average loss of over £10,000 per victim. It coincides with the launch of a new awareness campaign on the dangers of social engineering run by GetSafeOnline in conjunction with major banks, the National Fraud Intelligence Bureau (NFIB) and Action Fraud. According to Financial Fraud UK, approximately 23% of people in the UK have received a cold call requesting personal or financial information, potentially putting them at risk of becoming a victim. Alex Grant, Barclays managing director of fraud prevention, comments: “We’ve seen from our own interaction with customers who have fallen victim to social engineering frauds that the loss of hard earned savings causes great emotional distress, as well has having a significant financial impact. This is why raising awareness about social engineering scams and protecting customers from fraud is one of our highest priorities.”

Royal Bank of Scotland to spend £1 billion on retail transformation June 27, 2014 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=26212 The Royal Bank of Scotland is to spend over £1 billion over the next three years to rebuild its retail banking business, with investment in digital channels as the primary focus. In a presentation to investors, the UK bank shared slides showing a steady decline in branch footfall and increase in mobile banking activity, forecasting that 50% of all retail transactions will be conducted via mobile devices by 2017, as opposed to less than five percent on the high street. The £1 billion spend by the bank will reflect these trends, with an increasing switch to self-service and provision of advice at the branch level, married to a continued investment in mobile and online technology. In the branch, this will entail a transformation from transaction centres to ‘advice and education centres’ with ‘points of presence where our customers live, work and travel’. This includes an expansion of the ATM network to railway stations and the kitting out of branches with iPads and free wi-fi. While the branch consumes 35% of the £1 billion budget, the lion’s share of 40% is allocated to digital initiatives, with a further 25% going to infrastructure and systems. In the digital realm this will mean new tablet banking and mobile apps, and the creation of ‘innovative tools tailored to specific live events’.

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In terms of infrastructural spend, the bank is planning the development of an open API protocol and the abolition of data silos to provide a single view of the customer

GE Capital Retail agrees to $169m settlement over unfair credit card lending allegations June 20, 2014 | BBR http://cards.banking-business-review.com/news/ge-capital-retail-agrees-to-169m-settlementover-unfair-credit-card-lending-allegations-200614-4298515 GE Capital Retail Bank has reached a $169m settlement with the US Department of Justice (DoJ) and the Consumer Financial Protection Bureau (CFPB) to resolve allegations of credit card lending discrimination. The company is accused of violating the Equal Credit Opportunity Act (ECOA) by excluding Hispanic borrowers, who indicated that they preferred Spanish communications or had a Puerto Rican mailing address, from two of its credit card debt-repayment programs, namely ‘Statement Credit Offer’ and the ‘Settlement Offer,’ between January 2009 and March 2012. As a result, the excluded Hispanic borrowers experienced higher debt levels and longer periods of debt, and some of them are also believed to have suffered additional consequential economic damages, including increased risk of credit problems, default and repossession, as their accounts were closed or ‘charged-off’ and sold to a third party. CFPB Civil Rights Division acting assistant attorney general Jocelyn Samuels said the blatant discrimination is unlawful and will not be tolerated. “Borrowers have the right to credit card terms that do not differ based on their national origin, and the settlement today sends the message that the Justice Department can and will vigorously enforce the law against lenders who violate that right,” Samuels added. Apart from providing $169m to 108,000 affected borrowers in the form of cash or reductions of their credit card balances, the bank has also agreed to eliminate negative credit reports for borrowers that occurred during periods of the alleged discrimination. The bank, which recently changed its name to Synchrony Bank, has already provided $131.8m in relief to approximately 84,000 affected borrowers.

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Technology Vietnam Bank for Social Policies goes live with Polaris’ Intellect core banking solution June 27, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/vietnam-bank-for-social-policiesgoes-live-with-polaris-intellect-core-banking-solution-270614-4304758 The Vietnam Bank for Social Policies (VBSP), a government owned bank taking the lead in policy and microfinance has gone live with Polaris’ state-of-the-art Intellect Core Banking Solution (CBS) in all its 692 branches spread across Vietnam. VBSP chose Polaris Financial Technology Ltd, a leader in products, solutions and services that enable unprecedented operational productivity for the global Financial Services industry, to implement its Core Banking, Lending and Offline Solutions, enabling them to handle traditional banking products in an integrated and efficient manner. Intellect CBS deployed provides rich MIS reports on demand to effectively manage VBSP’s sociopolicy based Lending programs and helps the bank monitor the operations spread across Vietnam. The solution allows the bank to efficiently evaluate the success of various socio-policy lending programs. Intellect’s CBS has been deployed in a centralized data centre in Vietnam and can be accessed by all the 692 branches across the country. The solution with shared infrastructure costs will reduce the total cost of ownership significantly. The Intellect’s Offline system allows the bank to support operations in around 11,000 transaction points and the solution enables the seamless management of over 16 million accounts. Intellect Lending, a modular loan servicing system supports features such as centralized credit line monitoring, collateral management, repayment and automated delinquency tracking, offering a superior customer experience to businesses such as mortgage, consumer loans and commercial loans. Commenting on this initiative, Duong Quyet Thang, General Director, Vietnam Bank for Social Policies said, “As the chief tool of the Vietnamese Government to fight against poverty and to enable financial inclusion of the poor and policy beneficiaries, we required a centralized, robust and scalable solution that will enable us to promote policy and microfinance in Vietnam. Polaris’ Intellect solution now helps us in our transformation towards effective operations and financial self sustainability. The rollout of the new integrated Core Banking platform has created the technological framework to cater to all requirements of VBSP and support our ambitious plans to diversify and expand operations in the future.” Commenting on the successful implementation, Jaideep Billa, CEO, Global Universal Banking, Polaris Financial Technology Ltd said, “We are extremely happy that VBSP, a government owned bank taking the lead in policy and microfinance has gone live with Polaris’ Core Banking Solution across all branches in the country. Polaris’ highly scalable solution has paved the way for VBSP to not only improve their operational efficiency in bank-specific requirements that very unique, but also support all its requirements of a modern commercial bank. Our Intellect solution is a seamlessly integrated

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platform covering Core Banking and Lending that manage banking operations with ease and comfort. Polaris’ solution and central deployment will provide VBSP the flexibility required to support commitment to the people of Vietnam and its aggressive growth plans.” Polaris’ Intellect Core Banking Solution, designed as a scalable and componentized SOA solution, can be implemented using the J2EE framework. Intellect CBS’ functionality covers both back-end systems, such as DDA, timed-deposits and loan systems, as well as a complete front-end system known as Intellect Front Office that includes applications for tellers, platform sales and service staff

Union Bank & Trust selects Black Knight’s MSP servicing platform June 26, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/union-bank-trust-selects-blackknights-msp-servicing-platform-260614-4303410 Black Knight Financial Services announced that Union Bank & Trust, based in Lincoln, Nebraska, has signed a five-year contract to service mortgage loans in-house using MSP, Black Knight’s industryleading mortgage and consumer loan servicing platform. MSP, a complete, end-to-end system used by financial institutions to manage all servicing processes, including loan boarding, escrow administration, investor reporting and more, offers servicers the ability to meet all mortgage and consumer loan servicing needs for any size portfolio. The implementation of MSP supports Union Bank & Trust’s expansion into mortgage servicing, which complements the broad mix of financial services the bank offers to businesses and individuals. To expand the capabilities of its new servicing platform, Union Bank & Trust will integrate the following Black Knight solutions with MSP: •

Electronic Loan Interface to automate the loan setup process.

Customer CareNet to provide an online solution that gives Union Bank & Trust borrowers instant access to their mortgage information.

iDisburse to provide Union Bank & Trust with a fully automated check-printing solution for reviewing, printing and auditing disbursements.

“MSP offers us the ability to centrally manage all servicing functions on a single technology platform and to easily accommodate our growing loan portfolio,” said Alan Fosler, senior vice president, Union Bank & Trust. “The powerful capabilities of Black Knight’s technology give us the confidence that MSP is the best system to support our bank’s expansion into loan servicing.” “Our technology will allow Union Bank & Trust to reallocate resources to higher-priority customer service and revenue-building initiatives, which will support its growth goals,” said Joe Nackashi, CIO and president of Black Knight’s Servicing and Default Technologies division. “With MSP, we expect Union Bank & Trust to realize greater operational efficiency, reduce regulatory risk and provide a better borrower experience.”

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Iceland’s Borgun moves into mPOS business with Handpoint June 24, 2014 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=55742 The Acquiring Bank Borgun today launched a Mobile Point of Sale solution in Iceland in partnership with Handpoint. Borgun’s mPOS is tailored to address the needs of small and medium sized merchants and relies on Handpoint’s secure mPOS Platform as a Service (PaaS) - the only mPOS that has achieved PCI-P2PE application certification. Mobile POS replacing PC POS Mobile POS is having a disruptive effect on all market segments and has proven that it is not just for micro merchants. Forward thinking acquiring banks realise this trend and are adding mPOS to their payment offerings, often replacing stand alone payment terminals. “We want to help our customers grow. A simple & secure Mobile POS solution is a great addition to Borgun’s range of payment solutions in Iceland, serving merchants that want to move from PC POS to Mobile POS along with customers that haven’t accepted card payments because of cost and complexity.” Haukur Oddsson, CEO Borgun “We welcome Borgun’s initiative to be the first bank in Iceland to offer Mobile POS. Iceland has served as a vital test-bed for our secure mPOS platform, giving us extremely important direct user feedback. Now as the platform is mature and we’re scaling internationally it is time to move to the back seat and hand the direct merchant signups over to a strong local player and grow the user base even further. The Handpoint mPOS offering has made an impact on the Icelandic payment acceptance landscape with 91% customer satisfaction rate and 93% recommendation rate.” Davíð Guðjónsson, CEO & Co-founder Handpoint The Mobile POS solution consists of a Borgun branded payment app for iOS and Android, secure card readers and an EMV payment service. Handpoint Mobile POS is the world’s first and currently the only PCI P2PE certified mPOS application. P2PE means that all card data is encrypted and PCI scope for merchants minimized. Borgun will now be able to serve the increasing number of merchants that want to move from PC-POS to Mobile POS

DSG fully automates payment with Dubai Islamic Bank June 23, 2014 | BBR http://payments.banking-business-review.com/news/dsg-fully-automates-payment-with-dubaiislamic-bank-230614-4299437 Dubai Smart Government (DSG) has announced the activation of electronic linkage between its Government Resources Planning (GRP) Systems and Dubai Islamic Bank (DIB) to fully automate the financial processes for government suppliers and salary payments; in line with its current strategy to shift to smart government and smart city.

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This initiative is in line with DSG’s strategy to fully automate the procure-to-pay financial processes between Dubai government entities on one hand and suppliers on the other in the light of the DSG’s recent improvements of the GRP systems; which allow suppliers to send their invoices to these systems, make enquiries, access their own data and enter their commercial transactions online without the need for them to visit any of these entities. On the other hand, the full automation of electronic payment with DIB allows the competent staff at any government entity to send the due payments to suppliers and the salaries of the employees directly to the bank without any intervention on the part of the bank. Commenting on the activation of the linkage with DIB, H.E. Ahmed Bin Humaidan, Director General of DSG, said: “Activating electronic linkage and fully automating payment between DSG and DIB are aimed at supporting the accelerating transition to the smart government pattern in implementation of the directives of His Highness Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, which call for completing the transition within the deadline set for it.” He added: “The GRP systems provided to government entities are vital infrastructure that they rely on for managing their core resources, help increase productivity, save the time and effort of government entities and suppliers, and support electronic payment between the two parties. They also support the government’s shift towards a sustainable green environment by eliminating the need to exchange paper documents, minimizing the effect of vehicle movement, and providing a secure environment for paying money, thereby contributing to boosting the national economy.” Bin Humaidan pointed out that this step allow the competent staff at the government entity to encrypt and send payments (suppliers’ payments or entity employees’ salaries) to the bank as soon as they are entered into the GRP systems so as to reach in real time without any delay, relying on the government service bus, which provides the latest and most secure technologies without any intervention on the part of the staff. Meanwhile, Dr. Adnan Chilwan, CEO of DIB said: “DIB is fully committed to advancement and innovation in Islamic Finance. We were the first to introduce this phenomenon nearly four decades ago and our heritage and vintage ideally positions us to show the modern face of Islamic Banking to the world. We see technology as a major factor in easing and improving customer interaction and with the large and multi-faceted entities like the Dubai Department of Finance (DOF); a wellintegrated and customized corporate cash management platform not only improves quality and accuracy of service but also helps to minimize costs.” Chilwan continued: “This is clearly a strategic alliance for us and is an integral part of our strategy to align ourselves with Dubai’s “Smart Government” initiative. We are strong advocates of the Government’s plans and strategy around building a modern and sustainable society focused on the highest standards of customer service seen anywhere in the world.”

Zitouna Bank chooses IBM cloud for core banking systems June 19, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/zitouna-bank-chooses-ibm-cloudfor-core-banking-systems-190614-4297484 IBM announced that Zitouna Bank has selected cloud capabilities consisting of IBM systems, software and services to transform its core banking platform and develop new services for customers.

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As in many developing countries, more than 50 percent of the Tunisian population does not have access to modern, reliable financial services and more than a quarter have no bank accounts at all. This project will support Zitouna Bank’s objectives to open up to 18 new branches per year and roll out of new mobile and Internet banking services. Benefits are expected to be reduced waiting times for customers, a greater choice of banking channels and services, and extending services to the nation’s unbanked and underbanked citizens. Today’s announcement marks Zitouna Bank’s latest investment in IBM capabilities to help expand its operations and services to take advantage of growth opportunities in Tunisia. Zitouna Bank has been using IBM systems and software since it was founded in 2009. Adopting a cloud model will provide an enterprise that is secure, scalable and can handle mission-critical workloads, and create the greater flexibility, performance, economy and resilience the bank requires to support its growth objectives. “Our aim is to provide a diversified portfolio of modern banking services to enterprises and individuals, and establish ourselves as a leader in Tunisian banking,” said Lasaad Jaziri, CIO for Zitouna Bank. “IBM’s cloud capabilities will help us roll out a wider range of services and products, such as new mobile and Internet banking services, while also improving efficiency of internal banking processes and reducing our operational footprint.” The new cloud infrastructure is based on IBM Power Systems and other servers, IBM PowerVM virtualization software, IBM Storwize V7000 storage systems, and IBM Cloud Manager with OpenStack cloud management software. IBM Global Technology Services is providing implementation, maintenance and disaster recovery services, as well as training for the bank’s staff. The new cloud capabilities are expected to allow Zitouna Bank to improve application availability and reduce end-of-day batch processing time for daily transactions by more than 85 percent, from over 13 hours to 70 minutes. Greater operational efficiency will allow the bank to focus more on introducing innovative banking products for their customers and less on managing daily business operations. Since the bank’s inception, IBM has provided with a range of solutions and services for Zitouna Bank’s IT infrastructure, including Power Systems servers, DS5000 storage systems, Tivoli Storage Manager software, unified collaboration, networking and network security, and telesurveillance for ATMs and office branches

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Strategy BofA to cut 540 mortgage jobs in Charlotte area June 27, 2014 | BBR http://retailbanking.banking-business-review.com/news/bofa-to-cut-540-mortgage-jobs-incharlotte-area-270614-4304857 Bank of America (BofA) is reportedly considering cutting nearly 540 jobs at its legacy asset servicing division in Charlotte that manages troubled mortgage loans, as part of its plan to trim down the operational cost. The cuts are expected to affect approximately 60% of the workforce at the asset servicing unit in Charlotte, North Carolina office. Reports also emerged that the BofA has sent a 60-day notice to the affected employees, who can apply for other jobs at the bank, including 150 positions at the Charlotte call center and another 250 open vacancies in the city. BofA spokesman Dan Frahm was quoted by Business Journal as saying: “It’s a really difficult message because the fact that we’ve cut the need for that support thanks to these efforts and an improving economy is a good sign for our company and the customer.” “But for our employees who have worked so hard to help those customers, this is tough,” Frahm told the publication. The job is a part of BofA’s plans to curtail operational cost at its Legacy Asset Servicing group, which was initially set up in 2011 to deal with 1.4 million past-due mortgages resulting from the acquisition of Countrywide Financial in 2008. Earlier, the bank has eliminated banking jobs at its troubled-mortgage units in New York, California, Dallas and California. In September 2013, BofA said it would cut 2,100 jobs across the US at its mortgage division, due to slowing mortgage refinancing activities fuelled by rising interest rates

Banco Popular to acquire Citi’s Spanish retail and credit card units June 24, 2014 | BBR http://retailbanking.banking-business-review.com/news/banco-popular-to-acquire-citis-spanishretail-and-credit-card-units-240614-4300215 Spain-based banking group Banco Popular Espanol has signed an agreement to acquire Citigroup’s retail banking and credit card businesses in Spain A statement by New York-based Citigroup was cited by Bloomberg as saying that the sale covers $2bn in assets, $2.8bn in deposits, $3.2bn in assets under management, as well as 1.2 million customer accounts.

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Banco Popular will also absorb around 950 employees and 45 of the bank’s branches as part of the agreement, the US lender said, which now seeks to focus on world’s top 150 urban centers. The sale is a latest sign of foreign banks’ withdrawal from Spain’s financial services market, which has increasingly become tough for them in the wake of the financial crisis, reported Reuters. However, Citigroup said the bank would remain in the country, but will focus on expanding its private bank and advising local companies and public sector clients through its investment bank. Citigroup spokesman Mark Costiglio refused to comment on the terms of the transaction, which excludes the bank’s investment and corporate-banking units in Spain. The transaction, whose value remains undisclosed, is expected to complete in the third quarter of 2014, following the receipt of regulatory approvals. Established in 1983, Citibank Espana has around 40 offices and 100,000 retail clients in Spain. Apart from Citigroup, British lender Barclays is also reportedly considering sale of its Spanish retail bank unit, with Spain’s third-largest bank, Caixabank, among the interested bidders

South Korea plans to divest stake in Woori Bank in two tranches June 23, 2014 | BBR http://commercialbanking.banking-business-review.com/news/south-korea-plans-to-diveststake-in-woori-bank-in-two-tranches-230614-4299130 The South Korean Government is planning to divest its 57% stake in Woori Bank, a subsidiary of Woori Finance, in two tranches within the first half of 2015 The Financial Services Commission (FSC) said the 30% controlling stake will be sold to one entity, while the remaining 26.97% is scheduled to be divided up and sold to various investors. Biddings for both tranches are expected to begin in September, and the sale will complete by the first half of 2015, the FSC added, noting that the firms interested in assuming management control can bid for package deal, while others can participate in group B to acquire between 0.5% and 10% shares in the bank. The sale represents fourth and final attempt by the government to recover more than $12bn of taxpayers’ money infused in Woori Finance during the financial crisis in the late 1990s. FSC chairman Shin Je-yoon was quoted by Yonhap News Agency as saying that the Woori Bank sale is in the final stage for privatization which the government has been trying to complete for the last 13 years. “The FSC will put more significance on improving the feasibility of the sale in accordance with market consensus,” Je-yoon added. Public Fund Oversight Committee chairman Park Sang Yong said the committee expects more than one competitor to emerge in the coming months before the start of 30% stake auction. “Any legitimate investors including a consortium can participate in the competition. Even foreign private equity funds can compete. We won’t block them,” Yong added.

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The controlling stake has so far drawn interest from Kyobo Life Insurance only, while foreign investors are reluctant to foray into a market believed to be having poor returns, Reuters reports. The government’s stake in the bank is worth KRW5.4tn ($5.3bn), with the controlling share valued at nearly KRW3tn ($2.9bn)

Banco Santander to sell 50% custody business to Warburg Pincus-led group June 20, 2014 | BBR http://custodyandclearing.banking-business-review.com/news/banco-santander-to-sell-50custody-business-to-warburg-pincus-led-group-200614-4298048 Spanish lender Banco Santander has signed a definitive agreement to sell a 50% stake in its current custody operations to a group led by the global private equity firm, Warburg Pincus Under the terms of agreement, the group comprising Finesp Holdings and Singapore based investment company Temasek, will acquire half of Santander’s custody operations in Spain, Mexico and Brazil. The remaining 50% stake will continue to be owned by Santander, a custody provider in Spain, Brazil and Mexico, with €738bn in assets under custody. Banco Santander chief executive officer Javier Marin said the alliance enables the bank to significantly increase its fund administration, depositary and custody business in markets. “The transaction will enable us to increase and improve the products and services we offer our clients, with a higher value-added proposition adapted to their needs,” Marin added. Warburg Pincus managing director and European Financial Services Group head Dan Zilberman said the partnership with Banco Santander and the Santander Custody management team will enhance the company’s focus on providing best-in-class products and services to its customers in Spain and Latin America. “The custody market benefits from long term structural growth and we look forward to supporting management in accelerating the company’s growth and service offering,” Zilberman added. Valuing Santander’s Brazilian, Mexican and Spanish custody operations at €975m , the transaction is expected to generate a net capital gain of approximately €410m, which will be used by the Santander Group to strengthen the balance sheet. Specifically, the company intends to focus on enhancing the products and services provided to its customers through greater investment in its technology platform and team. Subject to legal and regulatory approvals, the transaction is expected to close during the fourth quarter of 2014

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SunTrust, US regulators reach settlement on abusive mortgage practices June 18, 2014 | BBR http://policiesandregulatorycompliance.banking-business-review.com/news/suntrust-usregulators-reach-settlement-on-abusive-mortgage-practices-180614-4295784 SunTrust Banks has reached a definitive agreement with the US Department of Justice (DoJ) and the Department of Housing and Urban Development (HUD) to settle allegations of improper mortgage origination and servicing practices Having signed agreements in principle in October 2013, the company’s subsidiary SunTrust Mortgage has now agreed to pay $968m, which includes consumer relief of $500m for homeowners and borrowers, and a cash payment of $468m, to address mortgage origination, servicing, and foreclosure abuses. US Attorney General Eric Holder said SunTrust’s conduct represents a prime example of the widespread underwriting failures that helped bring about the financial crisis. US Justice Department Civil Division assistant attorney general Stuart Delery said SunTrust’s irresponsible federal housing administration (FHA) lending practices caused grievous harm to homeowners and the housing market, while wasting hundreds of millions of dollars in taxpayer funds. “As this settlement demonstrates, we will continue to hold accountable financial institutions that misuse public funds and ruin the lives of hardworking Americans in the pursuit of their own financial interests,” Delery added. SunTrust Banks chairman and chief executive officer William Rogers said the company is pleased to have resolved legacy mortgage matters and looks forward to of provide high quality products and service to clients. “Like most major financial institutions, we are addressing issues related to mortgage matters stemming from the financial crisis and recession period,” Rogers added. SunTrust is accused of originating and underwriting FHA-insured mortgages that violated its obligations as a participant in the FHA insurance program between January 2006 and March 2012. In addition, the Georgia-based company has admitted that it failed to carry out an effective quality control program to identify non-compliant loans, and report to HUD even after identifying the defective loans.

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