Sutherland insights banking news flash june 16, 2014

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BANKING NEWS FLASH June 16, 2014


Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 8 Technology .......................................................................................................................... 15 Strategy .............................................................................................................................. 19

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Sales & Marketing SwaziBank to issue MasterCard debit cards and expand MasterCard acceptance network June 13, 2014 | BBR http://cards.banking-business-review.com/news/swazibank-to-issue-mastercard-debit-cards-andexpand-mastercard-acceptance-network-130614-4293013 SwaziBank has announced its collaboration with MasterCard, becoming the first locally-owned retail and commercial bank licensed by the global payments technology company in Swaziland. By enabling acceptance of MasterCard products on SwaziBank’s ATM network around the country, the number of ATMs now accepting MasterCard payment cards in Swaziland increases by a substantial 25 percent. The roll out of SwaziBank Point of Sale (POS) terminals will follow later in the year. SwaziBank also announced the signing of a partnership deal with MasterCard that will see MasterCard debit cards issued to about 80,000 of the bank’s business and private customers. This will allow SwaziBank customers to use their cards locally at ATMs and at merchants equipped with SwaziBank POS terminals. As a result of this partnership, cardholders will also enjoy access to over 36.9 million MasterCard acceptance locations globally. “Swazi citizens need access to financial services that help them manage their income for daily essentials, save for future needs and protect themselves against unforeseen risks. There is a huge portfolio of micro and small enterprises that also need access to diverse financial services,” says Zakhele Lukhele, Managing Director of SwaziBank. “Meeting this demand through our collaboration with MasterCard will contribute to stimulating economic growth in the country at a time when Swaziland is actively developing its financial inclusion strategy” Lukhele adds that Swaziland joined the Alliance for Financial Inclusion last year, which gives the Ministry of Finance access to resources, tools and international insight on how to engage the entire population and all enterprises in the country’s economic development. “According to the Finmark Trust, only about 44 percent of Swaziland’s adults are formally banked,” Lukhele says. “Our government has recognised that increasing access to credit facilities, electronic payments, and formal savings, insurance and retirement products will significantly advance our social and economic development goals.” Charlton Goredema, Vice President and Area Business Head, Southern Africa at MasterCard says: “As SwaziBank enables its customers to benefit from MasterCard’s global payments network, we are assisting Swaziland to integrate its economy with those elsewhere in the world. Importantly, we are also contributing to the financial freedom of individuals.” The increased number of MasterCard payment cards and acceptance locations in Swaziland means that thousands more citizens and merchants will be introduced to the safety, security, and convenience of electronic payments, while enjoying protection from the risks of and costs associated with cash.

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“By reducing the dependence on and usage of cash, MasterCard and SwaziBank will advance the adoption of formal banking products, which ultimately drives financial inclusion,” says Goredema

Tesco Bank launches first customer centric current account June 10, 2014 | BBR http://retailbanking.banking-business-review.com/news/tesco-bank-launches-first-customercentric-current-account-100614-4288800 UK-based retail lender Tesco Bank is all set to launch its first personal current account built around the needs of its customers Leveraging feedback from more than 20,000 customers, Tesco Bank Current Account includes all the key features that matter most to customers, and is available to residents aged 18 years and over in England, Wales and Scotland. The account offers Clubcard points on all debit card spending, while enabling customers to earn 3% annual equivalent rate (AER) variable interest on credit balances up to £3,000. However, the bank would charge £5 monthly fee if customers fail to deposit less than £750 a month. Commenting on account, Tesco Bank chief executive officer Benny Higgins said: “There are no gimmicks; - just a simple, rewarding, modern, convenient current account, designed for Tesco customers, by Tesco customers.” Tesco chief executive officer Philip Clarke said the customers want the bank to focus on offering quality products they can trust, providing great service, making things simple and transparent and rewarding them for their loyalty. “We’ve taken all these ingredients and used them to help create our first Tesco Bank current account,” Clarke added. Moneycomms.co.uk source Andrew Hagger said the Tesco Bank proposition will attract interest from customers looking for long term rewards and credit interest returns. “It’s also good to see that Tesco hasn’t gone down the route of charging daily fees for overdrafts as this can prove an expensive style of tariff, particularly for those only in the red by two or three hundred pounds,” Hagger added. “With 7 day switching well and truly bedded in, there’s no longer an excuse to stick with your bank if it doesn’t deliver and that’s something that Tesco Bank and fellow challengers are looking to exploit.” Other key features includes simple and transparent fees and charges, overdraft control, contactless Visa debit card that doubles as a Clubcard, as well as deposit facilities at 300 Tesco stores, amongst others

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Euroclear Bank international ETF structure premiers on Bats Chi-X Europe June 09, 2014 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=55519 Euroclear Bank, a world leading international central securities depository, in partnership with Bats Chi-X Europe (BATS), the continent’s largest stock exchange, announce the first exchange-traded fund (ETF) to be listed on Bats with an international securities structure. The iShares MSCI USA Dividend IQ UCITS ETF, which will be available to trade on BATS from today marks a further step forward in the two firms’ efforts to streamline ETF trade processing and settlement in the European market. The iShares MSCI USA Dividend IQ UCITS ETF invests in US companies that target higher thanaverage dividend yields. Securities are screened according to their earnings quality and to ensure that the dividends they pay are both sustainable and persistent over time. The fund aims to provide European investors with access to high quality income streams. Multi-listed ETFs in Europe are often issued and traded on one or more national stock exchange, and subsequently settle in the corresponding national Central Securities Depository (CSD). This causes inefficiencies in cross-border transactions. By using a single European settlement location, it is expected the international structure will improve liquidity, ease cross-border processing by removing the need for realignment of positions between CSDs for settlement and significantly lower overall costs and risks for investors. Mark Hemsley, Chief Executive Officer, BATS Chi-X Europe, commented: “BATS Chi-X Europe obtained its Registered Investment Exchange (RIE) status a year ago with the express purpose of bringing market efficiencies to European ETF listings. This latest listing can be counted as proof of concept that listing on BATS brings material benefits to pan- European investors looking to access deep and liquid markets, and we are very much looking forward to working with Euroclear Bank to extend use of their services in the near future.” Stephan Pouyat, Global Head of International Markets, Euroclear, commented: “We are pleased to have a second international ETF available for settlement on our multi-currency transaction processing platform. I thank those involved at BATS and BlackRock for the smooth inaugural launch here at BATS of this ETF. We are ensuring that intermediaries purchasing this ETF will benefit from the safety of electronic delivery-versus-payment settlement, as well as delivering tangible benefits such as harmonised processing rules across trading venues and much improved asset servicing. And as the market knows, expedient reconciliation as well as the timely and accurate payment of dividends is vital to the attractiveness of ETFs - and the optimal functioning of the market.” Leland Clemons, Head of iShares Capital Markets in EMEA commented: “Market infrastructure improvements are imperative to support the rapid growth of the ETF industry and we hope to see this structure adopted by providers across Europe to continue to drive the ETF market evolution.”

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Umpqua Bank opens new neighbourhood store June 04, 2014 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=55471 Umpqua Bank, a subsidiary of Umpqua Holdings Corporation (NASDAQ:UMPQ), today announced that the newest iteration of its neighborhood store concept will open in the first quarter of 2015 at 710 SW Yamhill Street in Portland, Ore. Umpqua’s neighborhood store concept, which the company first introduced in 2007, combines interactive design features and technology in smaller store footprints near where customers live, work and play. “Umpqua’s store design is constantly evolving to reflect changing consumer preferences and behaviors. We initially developed the neighborhood store concept to complement our flagship locations with a smaller design that could be built and opened quickly to provide our customers and communities with an engaging and highly interactive experience,” said Ray Davis, president and CEO of Umpqua Bank. “With the design of our new Fox Tower location we will continue to advance how bank stores can remain relevant by engaging and adding value to the communities they serve. The Fox Tower store will build on design innovations introduced in the flagship stores Umpqua has opened most recently in San Jose, San Francisco and Seattle. In January of 2014, Umpqua’s San Francisco store, located in the city’s Financial District, received the Retail Design Institute’s 2013 Store of the Year Award, marking the first time a financial institution has been recognized with this award

Eurasian Bank taps Monitise Create for mobile service June 02, 2014 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=55438 Eurasian Bank today announced the launch of its groundbreaking new mobile banking service, designed and developed by Monitise Create, a division of leading global Mobile Money provider Monitise PLC. The full-service, multi-language mobile banking app is available on iOS (iPhone) and Android to the Bank’s customer base that will exceed one million this year, with iPad and Windows Phone versions to follow. Monitise Create was approached by Eurasian Bank to define, create, develop and launch a mobile banking proposition to reflect the bank’s position as a key financial services innovator in Central Asia. The app, available in Russian, Kazakh and English, will provide all Eurasian Bank’s retail banking customers with access to transaction history for multiple accounts, intra-account transfers, bill payments, the option to apply for credit, block transactions and an ATM, branch and POS finder. Eurasian Bank is a universal commercial bank, serving customers in all regions of Kazakhstan. Named Best Bank in Kazakhstan by EMEA Finance in 2013 and ‘Domestic Retail Bank of the Year’ by Asian Banking and Finance in both 2012 and 2013, it has pioneered new banking products in Kazakhstan, including wealth management and self-service offerings that have established the bank’s position as a market-leading innovator.

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“The launch of our new mobile application is testament to the strength of our retail business and its drive to bring world-class innovations to banking in Kazakhstan,” said Michael Eggleton, CEO Eurasian Bank. “This marks the next step in the journey that we’ve been taking to re-shape our services around the changing needs of our customers, reflecting how mobile is really at the heart of the future of banking services. “ Alistair Crane, CEO Monitise Create, said: “Pioneering mobile experiences are the cornerstone of what we do. In working with Eurasian Bank to both design and develop a market-leading mobile banking application for them, we’ve been able to apply our extensive experience in creating commercially game-changing mobile propositions to deliver something that’s a real first for the region.”

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Finance Mortgage Rates Slightly Higher This Week June 13, 2014 | Mortgage News Daily http://www.mortgagenewsdaily.com/consumer_rates/372135.aspx Mortgage rates staged a modest comeback this afternoon after starting the day in line with the highest levels of the week. As underlying market conditions improved in the afternoon, several lenders released new rate sheets, but it wasn’t enough to bring rates lower than yesterday’s or last week’s. Even then, many borrowers will still be quoted the same rate today, but with higher closing costs (those costs equate to a 0.03% rise in rate). The most prevalently quoted conforming 30yr fixed rate for best-case scenarios (best-execution) remains 4.25%. The theme for this past week turns out to have been the culmination of a short term trend higher in rates, beginning in late May. The most aggressive days of that move were in the previous week, but Monday and Tuesday of this week kept the pressure on. This raised the possibility that the uptrend would continue, but the slowing pace provided hope for a correction. As of yesterday, we finally got the drop in rates needed to interrupt that trend. This also opened the door for a deeper correction if rates could have improved today. But because we instead saw the move slightly higher and sideways, the best characterization for rates at the moment is that the recent move higher has run its course, but no new trend has been decided on yet. That’s a less optimistic scenario for those who’d like to float in the hopes of further improvement, but still a less urgent scenario than earlier in the week for those inclined to lock. Loan Originator Perspective “We saw slight losses today in rate markets. It would have been nice to follow through on yesterday’s gains, but looks like bond traders prefer 10 year yields in the area of 2.6% for now. Next week brings inflation data on Tuesday. Iraq is the wild card, should missiles start flying, rates could benefit. Looks like locking for loans within 30 days of closing is likely the way to go until we see another downward rate trend.” - Ted Rood, Senior Mortgage Planner, tedroodteam.com “The benchmark 10 Yr Treasury is sitting right where it began this past Monday although mortgage pricing is actually just a tad worse on the week. I don’t see anything out there to tell us that the odds are in our favor that mortgage pricing will improve soon. Certainly it can, but prudent minds with a closing date in the near term should seriously consider locking in current pricing. For the risk takers among us with a little longer to go to closing feel free to place your bets. Stay in touch with your mortgage professional and be ready to pull the trigger.” -Hugh W. Page, Sen. Mortgage Consultant, Capital Partners Mortgage “It sure would have been nice to see another strong up day in bonds to confirm the potential trend reversal. We did however test support and once again it held which can be seen as positive. With the uncertainly of the situation in Iraq looming over the weekend and the market some what shrugging off the most of the potential issues there, I feel the risk vs reward for floating over the weekend is pretty low. “ -Manny Gomes, Branch Manager, Norcom Mortgage “News from the central bank of the UK sent our bond yields higher this morning. Despite the move, the upper end of the range has held and throughout the day yields have steadily moved back lower. With the range holding, and lenders being conservative on passing along the improvements today, I am still recommending my clients to float over the weekend.” -Victor Burek, Open Mortgage

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Today’s Best-Execution Rates •

30YR FIXED

4.25%

FHA/VA

3.75%

15 YEAR FIXED

3.375%

5 YEAR ARMS

3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations •

The Fed has stayed the course on their $10bln per meeting reduction in bond buying, though markets have handled it relatively calmly compared to the days of “coming to terms with tapering” in 2013.

Rates fell significantly in January, leveled-off in February and took choppy steps higher in March. From there, they settled into a flat range mostly consisting of 4.375 and 4.5%, but with occasional forays to 4.25 and 4.625%.

The bias had been very slightly toward higher rates, it reversed course in early April as expectations grew concerning European Central Bank easing. On several occasions, those expectations would go on to overwhelm domestic economic data--normally the main source of guidance for market movements.

As of the third week in May, rates were as low as they’ve been since June 2013, more than confirming a break below the 2014 range. They remained in that range through month-end and grew more volatile ahead of the June 5th European Central Bank Announcement.

Looking back at recent movement, it’s had a disconcertingly small amount to do with ‘normal stuff’ like economic data and Fed policy. Temporary and unpredictable factors currently account for too much of the movement to make firm bets on rates moving either direction in the short term.

(As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario. There are many reasons a quoted rate may differ from our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

MBA: Originators Lose a Reported $194 on Each Loan in Q1 June 10, 2014 | National Mortgage Professional Magazine http://nationalmortgageprofessional.com/news49638/MBA-Originators-Lose-Reported-194-EachLoan-Q1 Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net loss of $194 on each loan they originated in the first quarter of 2014, down from a reported $150 in profit per loan in the fourth quarter of 2013, the Mortgage Bankers Association (MBA) reported in its Quarterly Mortgage Bankers Performance Report.

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“The significant overall production volume decline in the first quarter hurt mortgage bankers,” said Marina Walsh, MBA’s vice president of Industry Analysis. “Purchase volume did not pick-up, while refinancing volume dropped and costs continued to rise. Given these conditions, companies that managed to break even in the first quarter should consider that a reasonable outcome.” Other key findings of MBA’s Quarterly Mortgage Bankers Performance Report are: •

In basis points, the average production loss was 8.31 basis points in the first quarter of 2014, compared to an average net production profit of 8.72 basis points in the fourth quarter of 2013. This marks the sixth consecutive quarter that production income has decreased.

Average production volume was $274 million per company in the first quarter of 2014, down from $367 million per company in the fourth quarter of 2013. The volume by count per company averaged 1,238 loans in the first quarter, down from 1,641 in the fourth quarter of 2013.

The purchase share of total originations, by dollar volume, was relatively flat at 68 percent in the first quarter of 2014. For the mortgage industry as a whole, MBA estimates the purchase share at 51 percent in the first quarter of 2014, from 47 percent in the fourth quarter of 2013.

Secondary marketing income increased to 277 basis points in the first quarter, compared to 248 basis points in the fourth quarter of 2013.

Total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to $8,025 per loan in the first quarter, up from $6,959 in the fourth quarter of 2013. First quarter 2014 production expenses were the highest recorded in any quarter since the Performance Report was created in the third quarter of 2008.

Personnel expenses averaged $5,048 per loan in the first quarter, up from $4,385 per loan in the fourth quarter of 2013.

The “net cost to originate” was $6,253 per loan in the first quarter, up from $5,171 per loan in the fourth quarter of 2013. The “net cost to originate” includes all production operating expenses and commissions, minus all fee income, but excluding secondary marketing gains, capitalized servicing, servicing released premiums, and warehouse interest spread.\

Productivity was 1.7 loans originated per production employee per month in the first quarter, down from 2 loans in the fourth quarter of 2013.

Including all business lines, 54 percent of the firms in the study posted pre-tax net financial profits in the first quarter of 2014, down from 58 percent in fourth quarter of 2013, and 94 percent in the first quarter of 2013.

MBA’s Mortgage Bankers Performance Report series offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, bank subsidiaries and other non-depository institutions. The 75 percent of the 331 companies that reported production data for the first quarter report were independent mortgage companies and the remaining 25 percent were subsidiaries and other nondepository institutions. NMP NewsOriginationsTrendsMortgage Bankers Association (MBA)Marina WalshMortgage Bankers Performance ReportQuarterly Mortgage Bankers Performance Report Email this Story Share this on Twitter.Do you need to stay on top of mortgage industry news and trends?

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Q1 Commercial/Multifamily Mortgage Debt Increases by $11.1 Billion June 09, 2014 | National Mortgage Professional Magazine http://nationalmortgageprofessional.com/news49600/q1-commercialmultifamily-mortgage-debtincreases-111-billion The level of commercial/multifamily mortgage debt outstanding increased by $11.1 billion in the first quarter of 2014, as three of the four major investor groups increased their holdings. That is a 0.4 percent increase over the fourth quarter of 2013. Total commercial/multifamily debt outstanding stood at $2.56 trillion in the first quarter. Multifamily mortgage debt outstanding rose to $913 billion, an increase of $8.7 billion, or 1.0 percent, from the fourth quarter of 2013. “Commercial and multifamily mortgage debt outstanding continued to expand during the first quarter, hitting another new high,” said Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “Banks led the charge, followed by life insurance companies and REITs, while the CMBS market reverted to a net decline in the balance of outstanding mortgages. Mortgage debt backed by apartment properties continued to grow at a faster pace than other property types, particularly on bank balance sheets.” The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues). Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $914 billion, or 36 percent of the total. CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $554 billion, or 22 percent of the total. Agency/GSE portfolios and MBS hold $391 billion, or 15 percent of the total, and life insurance companies hold $342 billion, or 13 percent of the total. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the “CMBS, CDO and other ABS” category.

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Multifamily Mortgage Debt Outstanding Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $391 billion, or 43 percent of the total multifamily debt outstanding. They are followed by banks and thrifts with $272 billion, or 30 percent of the total. State and local government hold $84 billion, or 9 percent of the total; CMBS, CDO and other ABS issues hold $74 billion, or eight percent of the total; life insurance companies hold $54 billion, or six percent of the total; and nonfarm noncorporate business holds $15 billion, or two percent of the total. Changes In Commercial/Multifamily Mortgage Debt Outstanding In the first quarter of 2014, banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $16.5 billion, or 1.8 percent. Life insurance companies increased their holdings by $2.4 billion or 0.7 percent and REITs increased their holdings by $2.1 billion, or 5.3 percent. CMBS, CDO and other ABS issues saw the largest decrease at $11.1 billion, or 2.0 percent. In percentage terms, REITs saw the largest increase in their holdings of commercial/multifamily mortgages, an increase of five percent. State and local government retirement funds sector saw their holdings decrease nine percent. Changes In Multifamily Mortgage Debt Outstanding The $8.7 billion increase in multifamily mortgage debt outstanding between the fourth quarter of 2013 and first quarter of 2014 represents a 1.0 percent increase. In dollar terms, commercial banks saw the largest increase in their holdings of multifamily mortgage debt, an increase of $9.0 billion, or 3.4 percent. State and local government increased their holdings of multifamily mortgage debt by $695 million, or 0.8 percent. Life insurance companies increased by $386 million, or 0.7 percent. CMBS, CDO and other ABS issues saw the largest decline in their holdings of multifamily mortgage debt, by $1.2 billion, or 1.6 percent. In percentage terms, commercial banks recorded the largest increase in holdings of multifamily mortgages, at three percent. State and local government saw the biggest decrease, at nine percent. MBA’s analysis is based on data from the Federal Reserve Board’s Flow of Funds Account of the United States and the Federal Deposit Insurance Corporation’s Quarterly Banking Profile. More information on the construction of this data series is contained in Appendix A in the report

BofA negotiates $12bn settlement with US Justice Department June 06, 2014 | BBR http://retailbanking.banking-business-review.com/news/bofa-negotiates-12bn-settlement-withus-justice-department-060614-4286808 Bank of America (BofA) is reportedly in negotiations with the US Justice Department to pay at least $12bn to resolve multiple federal and state civil investigations into its alleged handling of shoddy mortgages in the run up to the 2008 financial crisis People with knowledge of the matter were quoted by The Wall Street Journal as saying that the company and the Justice Department have conducted several meetings in the recent days, but are yet to reach a tentative settlement.

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Approximately $5bn of the amount is expected to go towards consumer relief, including help for homeowners in reducing principal amounts and monthly payments, and paying for blight removal in the struggling neighbourhoods, the sources added. The company is being urged to pay billions more than the $12bn it is currently offering. The amount, which exceeds the company’s 2013 profit of $11.43bn, would include both ‘hard money,’ or fines, and ‘soft money,’ or consumer relief, according to the news agency. The North Carolina-based bank has already reached a deal with a $6bn deal with the Federal Housing Finance Agency (FHFA) for its handling of toxic mortgages, which combined with the latest payout would exceed the $13bn amount paid by JPMorgan Chase to resolve similar charges in 2013. Both BofA and JPMorgan are accused of selling shoddy home loans to unqualified consumers, and also packaging them into securities with knowledge that they would eventually turn bad and subsequently selling them to investors worldwide before the financial crisis. While JP Morgan and subsidiaries issued $450bn in private-label, mortgage-backed securities between 2004 and 2008, BofA and its subsidiaries are accused of issuing $965bn in mortgage securitizations during the same period, according to Sanford C. Bernstein analysts. Both BofA and Justice Department spokesman refused to comment on the report

FINRA fines Barclays, Goldman and Merrill Lynch for inaccurate blue sheet data June 05, 2014 | BBR http://www.banking-business-review.com/news/finra-fines-barclays-goldman-and-merrill-lynchfor-inaccurate-blue-sheet-data-050614-4285595 Barclays Capital, Goldman Sachs and Merrill Lynch have been censured and fined $1m each by the Financial Industry Regulatory Authority (FINRA) for submission of inaccurate blue sheet data to regulators The US regulator had also levied similar penalty on Pierce, and Fenner & Smith for failing to provide complete and accurate information about trades performed by them and their customers to FINRA, the Securities Exchange Commission (SEC) and other regulators. In addition, a complaint has also been issued against Wedbush Securities for failing to submit complete and accurate blue sheets. FINRA Office of Fraud Detection and Market Intelligence executive vice president and head Cameron Funkhouser said blue sheets are mission-critical to conducting reviews and investigations of suspicious trading. “When firms fail to submit timely and accurate blue sheet data, it compromises the ability of every regulator to identify the perpetrators of illegal insider trading and other market abuses,” Funkhouser added. The regulator alleges that the companies’ submitted data that failed to include some customer names and contact information, transactions, contained incorrect name and contact information for some customers, or inaccurate details of the transactions, and also lacked adequate audit systems providing for accountability of their blue sheet submissions.

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As per the federal securities laws and FINRA rules, the blue sheets should be electronically provided to FINRA and other regulators, upon request, to aid in identification of trading anomalies and investigation of potential insider trading or other market manipulations. The blue sheets contain detailed information about trades performed by a company and its customers, including the security’s name, date traded, price, transaction size and parties involved. FINRA had directed all firms to certify that they have conducted a comprehensive review of their systems related to blue sheet submissions, and established procedures reasonably designed to address and correct the violations. Barclays, Goldman Sachs and Merrill Lynch have neither admitted nor denied the charges, but consented to the entry of FINRA’s findings

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Technology Bank of England unveils new cybersecurity test framework June 11, 2014 | BBR http://riskmanagement.banking-business-review.com/news/bank-of-england-unveils-newcybersecurity-test-framework-110614-4290368 The Bank of England (BOE) has officially launched a new cybersecurity test framework to help improve the financial industry’s resilience to cyberattacks. Called CBEST, the framework uses intelligence from both the government and accredited commercial providers to identify potential attackers to a particular financial institution, and simulates the techniques used by hackers in order to test the extent to which they may be successful in penetrating the defences of the organization. CBEST provides access to considered and consistent cyber threat intelligence, skilled and competent cyber threat intelligence analysts, and includes realistic penetration tests, enabling an institution to spot their vulnerability and be better prepared to implement remediation plans. Bank of England Resolution executive director Andrew Gracie said CBEST aims to bring together the best available threat intelligence from government and elsewhere, tailored to the business model and operations of individual firms, to be delivered in live tests, within a controlled testing environment. “The results should provide a direct readout on a firm’s capability to withstand cyber-attacks that on the basis of current intelligence have the most potential, combining probability and impact, to have an adverse impact on financial stability,” Gracie added. The new accreditation standard were developed in collaboration with the Council for Registered Ethical Security Testers (CREST) and Digital Shadows as part of the bank’s response to the Financial Policy Committee’s recommendation to test and improve resilience to cyber-attack. BOE claims that CBEST differs from other security testing currently undertaken by the financial services sector as it uses real threat intelligence and focuses on the more sophisticated and persistent attacks on critical systems and essential services

i2c, Banco do Brasil Americas introduce NEW EMV prepaid card June 09, 2014 | BBR http://cards.banking-business-review.com/news/i2c-banco-do-brasil-americas-introduce-newemv-prepaid-card-090614-4288491 i2c, Inc., a provider of payment processing and emerging commerce solutions, and Banco do Brasil Americas have partnered to launch the Banco do Brasil Americas Multi-Currency prepaid MasterCard (BBA Prepaid Card). A general purpose reloadable prepaid card, it is ideally suited to meet the financial needs of consumers that travel internationally.

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“Consumer-centric financial institutions like Banco do Brasil Americas place a premium on tailoring their products to meet the varying needs of their consumers” The BBA Prepaid Card supports both EMV chip and magstripe technology which ensures its acceptance in the United States and abroad anywhere MasterCard is accepted. Many countries outside of the United States have adopted EMV chip technology for its increased security and fraud prevention capabilities. The card’s dual EMV/magstripe support eliminates the need for consumers to carry cash or additional payment cards when traveling to other countries. The card’s multi-currency purse functionality provides additional convenience for international travelers. A unique feature enabled by the i2c processing platform, it allows cardholders to transfer funds into other currencies and store them in purses, or sub-accounts, directly linked to the card. By using multi-currency purses, consumers can lock-in favorable exchange rates while avoiding the hassles and risks associated with carrying and exchanging paper currency. The BBA Prepaid Card currently supports US Dollars, Brazilian Reais, Canadian Dollars, Euros, British Pounds Sterling and Australian Dollars. Banco do Brasil Americas President and Chief Executive Officer, Cassio Segura, says, “We strive to create financial products and services that are convenient, cost-effective and safe for consumers. By working with capable partners like i2c, we were able to integrate a number of useful features into the prepaid card so that it delivers these benefits.” “Consumer-centric financial institutions like Banco do Brasil Americas place a premium on tailoring their products to meet the varying needs of their consumers,” says Amir Wain, chief executive officer, at i2c. “The execution of this philosophy requires the support of a processor with unique capabilities that can be customized and deployed quickly. We are happy to be serving Banco do Brasil Americas in this capacity on another innovative program.” Consumers can load funds to the BBA Prepaid Card via online account transfer, and cash can be accessed surcharge-free by using the card at Banco do Brasil Americas-branded ATMs. Self-service cardholder support is available in English and Portuguese and live agent service is available in English, Portuguese and Spanish. Interested consumers can sign up to receive a card by going to www.bbamericas.com or by visiting a Banco do Brasil Americas branch location

UAE Banks Federation starts Mobile Wallet implementation June 05, 2014 | BBR http://www.banking-business-review.com/news/uae-banks-federation-starts-mobile-walletimplementation-050614-4286024 The UAE Banks Federation (UBF) has started implementation of the first phase of the Mobile Wallet project, which seeks to revolutionize payments services across the country. Scheduled to be implemented throughout 2015, Mobile Wallet project includes several phases, the first of which aims to put in place mobile payments and money transfer platform for smart phones and other digital devices. A financial component of the Smart Government initiative announced in May 2013, the project has been designed to enable users to make payments for all key government services from a purposedesigned platform that interfaces with all banks operating in the UAE.

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In addition, the project includes the facility for smart phones and other digital devices to be used for cashless purchase in UAE retail and other outlets, and a means to store and transfer money. UAE Banks Federation committee chairman and ADIB CEO Tirad Al Mahmoud said the project has received very positive feedback project from a wide range of merchants and retail outlets around the country. “We strongly believe that the popularity of the system will be driven by the uptake of users, and the ease of payment and intuitiveness of the system which supports it,” Al Mahmoud added. “Additionally, the system has been designed to make usage available to all levels of society, including those who do not have bank accounts.” Future phases of the project are expected to make the Mobile Wallet available to visitors, while further extending the system’s usability and functionality. Once operational, the project, which is supported by all 49 banks, will be managed by a separate entity supported by UAE banks and regulated by the Central Bank

BMO Capital implements Fenergo’s regulatory onboarding solution June 04, 2014 | BBR http://policiesandregulatorycompliance.banking-business-review.com/news/bmo-capitalimplements-fenergos-regulatory-onboarding-solution-040614-4284794 BMO Financial Group’s investment and corporate banking unit, BMO Capital Markets, has deployed Fenergo’s solution for a regulatory and tax compliant client onboarding process. Fenergo Client Onboarding Lifecycle Tool enables financial institutions to provide a quick and efficient onboarding process for both new and current customers, while ensuring compliance with increasingly complex regulatory frameworks at client take-on and ongoing due diligence stages. BMO Capital Markets Client Onboarding managing director Erica Benjamin said: “Fenergo’s Regulatory Onboarding solution provides us with an additional level of flexibility and enhances our ability to prioritize our compliance initiatives.” Fenergo CEO Marc Murphy said several clients are choosing to implement Fenergo Regulatory Onboarding by focusing on their biggest pain-point or regulatory challenge first. “We’ve invested heavily in the Fenergo platform to provide the enhanced level of flexibility to suit the resources and requirements of financial institutions,” Murphy added. Apart from accelerating onboarding, account opening and client maintenance processes, the solution also manages all the client and counterparty data and documentation required to support compliance management. In addition, the solution’s advanced rules-driven, risk-based regulatory engine supports compliance with both global and local regulations, such as AML, KYC, Dodd-Frank, FATCA, as well as MiFID II and EMIR based on a few key data inputs.

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The deployment represents the second Canadian Regulatory Onboarding deal for Fenergo, after its implementation by Scotiabank’s Global Banking and Markets division in February 2014

NCR launches new software solution for banking industry June 03, 2014 | BBR http://bankingtechnology.banking-business-review.com/news/ncr-launches-new-softwaresolution-for-banking-industry-030614-4283748 NCR, the global leader in consumer transaction technologies, introduced new, next-generation technology to help banks and credit unions transform their retail banking experience. NCR Interactive Banker unlocks a modern branch experience by eliminating velvet ropes, teller counters and vaults in smaller, more personal branches to better connect with customers. Interactive Banker includes two components. The first is an advanced financial services kiosk with a sleek, modern design that alone can complete as much as 90 percent of typical branch transactions. The second component is sophisticated branch software installed on tablet PCs, freeing employees to roam the branch and assist customers as they conduct transactions on the kiosks. The combination of kiosk-based self-service and technology-empowered branch employees fundamentally changes the person-to-person experience within a branch. Instead of isolating employees behind a teller counter, financial institutions can move their associates into the open to directly interact with consumers, similar to consumer experiences while shopping, checking in to the airport or going to the doctor. Interactive Banker gives financial institutions the flexibility and freedom to redefine their retail banking network strategies. For example, by using Interactive Banker, banks and credit unions can eliminate teller counters, bank vaults and other back-office functions that take up to 70 percent of a branch’s floor space. NCR estimates that Interactive Banker can help a financial institution increase its annual operating profit by up to $300 per square foot.1 The more efficient branch design allows financial institutions to create either an open, airy, and consumer-friendly floor layout or establish a presence in a smaller-footprint location convenient to where their customers work, live and play. “Interactive Banker uses technology to make the interaction between people more meaningful,” said Jed Taylor, vice president and general manager, NCR Interactive Services. “By bringing tellers and all of their equipment out from behind the counter to interact with customers in an open environment, we incorporate technology while retaining that human touch. Consumers’ experience at the bank branch is about to change more dramatically than it has in more than a generation.” While teller transactions have decreased by 31 percent in the past 10 years2, branches remain essential to financial institutions, as approximately 70 percent of all new product sales occur in the branch and 90 percent of current accounts were opened in the branch.3 NCR Interactive Services such as Interactive Banker and Interactive Teller bring technology with a human touch to banking, helping financial institutions improve the customer experience and increase sales. One NCR customer saw annual sales increase by 76 percent through a strategy of expanded hours, enhanced staffing models, and channel synchronization delivered through Interactive Teller. Interactive Banker is now in key markets globally including North America, Western Europe and South Asia.

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Strategy US DoJ to sue Citi, BofA over shoddy mortgage bonds sale June 16, 2014 | BBR http://retailbanking.banking-business-review.com/news/us-doj-to-sue-citi-bofa-over-shoddymortgage-bonds-sale-160614-4293425 The US Department of Justice (DoJ) is likely to sue Citi and Bank of America (BofA) over the alleged sale of private-label mortgage-backed securities by the lenders in the run-up to the 2008 financial crisis A person familiar with the discussions was quoted by Bloomberg as saying that the move follows failure of talks aimed at resolving the probe as the DoJ officials were unsatisfied with the offers made by the banks. A civil lawsuit against Citi is likely to be filed in the US District Court in Brooklyn, US, as early as this week, the person added. Having initially sought more than $10.6bn from Citi and $17bn from BofA, the DoJ was however, willing to consider offers below the requested amount. While ofA offered around $12bn, the New York-based Citi had offered to pay less than $4bn to settle the charges, prompting the DoJ prosecutors to suspend negotiations last week. Both Citi and the DoJ have been negotiating a settlement since April, according to the source. Meanwhile, Citi spokesmen Mark Costiglio and the DOJ spokesman Brian Fallon refused to comment on the report. Citi sold approximately $91bn of mortgage loans packaged into private-label mortgage debt, which is not guaranteed or issued by government agencies, to the investors between 2005 and 2008, according to the bank’s annual securities filing. On the other hand, BofA’s Merrill Lynch unit is believed to have issued about $965bn between 2004 and 2008. The DoJ had already reached a $13bn settlement with JPMorgan Chase, which is accused of selling $450bn mortgage bonds, to resolve similar federal and state investigations in November 2013

Citi announces agreement to sell consumer bank in Greece June 13, 2014 | BBR http://retailbanking.banking-business-review.com/news/citi-announces-agreement-to-sellconsumer-bank-in-greece-130614-4292899 Citi has signed an agreement with Alpha Bank to sell its consumer banking business in Greece along with its Diners Club of Greece SA credit card operations.

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The sale includes approximately $600 million in GAAP assets, 480,000 customers, $1.4 billion in deposits and $540 million in customer receivables (cards & loans). Approximately 730 consumer banking employees and the Citi branch and ATM network in Greece will transfer to Alpha Bank. The sale, which is subject to regulatory and other customary approvals, is expected to close in the third quarter of 2014. Citi intends to focus on expanding the services it offers to Greek corporations, financial institutions, shipping, private bank and public sector clients as well as continuing to service its multi-national clients with operations in Greece. The sale represents another step in Citi’s strategy of winding down Citi Holdings by divesting noncore operating businesses and assets portfolios in an economically rational manner. “This decision furthers Citi’s global strategy of focussing our resources where we feel we have a competitive advantage, which includes our Corporate Banking businesses in Greece” said Grant Carson, CEO of Citi Greece. “Citi has been in Greece for 50 years, and intends to invest in our business to better serve our local and global clients. We believe this transaction benefits our Greek consumer customers, partners and employees. We recognize their contribution to the rich Citi Greece heritage and we thank them for their longstanding support.” Citi’s Institutional Clients Group advised Citi on this transaction

Ukraine to liquidate three banks in wake of continuing economic slide June 12, 2014 | BBR http://retailbanking.banking-business-review.com/news/ukraine-to-liquidate-three-banks-inwake-of-continuing-economic-slide-120614-4291482 The National Bank of Ukraine (NBU) has decided to liquidate three banks in the wake of continuing economic slide and the political turmoil in the country. The banks include Brokbusinessbank and Forum Bank, owned by the associates of the ousted Ukraine president Viktor Yanukovych, while the third is Mercury Bank, a small lender hit by recession aggravated by the ongoing crisis, as reported by Reuters. Ukraine State Deposit Guarantee Fund deputy managing director Andriy Olenchyk said the central bank is currently stress-testing the banking system and is scheduled to take a decision on closing a sizeable group of banks by the end of 2014. “Brokbusinessbank is liquidated as of today. The liquidation of Mercury Bank will start tomorrow, not today,” Olenchyk added. “The decision has already been taken ... and unfortunately Forum Bank also faces liquidation.” The total deposits being guaranteed by the state at the three banks facing liquidation exceeded UAH6.5bn ($559m), according to Olenchyk. Part of a group owned by Sergei Kurchenko, Brokbusinessbank had assets worth UAH 28.91bn ($243m) at the start of 2014, according to NBU figures, which however, put the bank into administration in March.

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Controlled by Ukrainian businessman and politician, Vadim Novinsky, Forum Bank had assets approximately UAH10.4bn ($87.4m) at the start of this year, but went into administration in the same month as Brokbusinessbank. Mercury Bank is claimed to be Ukraine’s 82nd biggest with assets of UAH1.97bn ($16.9m) at the start of 2014. Ukraine’s economy continues to decline despite a $17bn bailout from the International Monetary Fund (IMF), which partly aims to help Ukraine meet large debt payments, according to the news agency

Bank Muscat considering sale of brokerage division June 10, 2014 | BBR http://primebrokerages.banking-business-review.com/news/bank-muscat-considering-sale-ofbrokerage-division-100614-4289207 Oman-based financial services provider Bank Muscat is reportedly considering the sale of one of its brokerage division in the sultanate. In a bourse filing to the Muscat Securities Market (MSM), the lender said the sale is among the several strategic options being considered for the business, and noted that any further material information will be disclosed accordingly. The division will continue its operations in the meantime without any impact on customers, the bank added, without giving a timeframe for the potential sale, and value of the division. As one of the bank’s 21 licensed brokerages in Oman, the unit serves both foreign and domestic clients within Oman, and also offers brokerage services on some other regional bourses through a network of partners, as reported by Reuters. The division had recorded a total of OMR239m ($623m) in securities trading in 2013, which represents the third biggest share of Oman securities trading in that year, according to stock exchange data. Bank Muscat does not disclose the financial performance of the brokerage business in its annual reports

Bank of Cyprus considers sale of Russian retail business June 04, 2014 | BBR http://retailbanking.banking-business-review.com/news/bank-of-cyprus-considers-sale-ofrussian-retail-business-040614-4284355 Bank of Cyprus is reportedly considering the sale of its Russian subsidiary as part of a restructuring initiated by its new chief executive, in a bid to boost capital and refocus on the domestic market following its collapse Bank of Cyprus chief executive John Hourican was quoted by The Financial Times as saying that the bank would seek a new owner for the lossmaking Russian unit, Uniastrum Bank, it acquired in 2008.

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“Bank of Cyprus has no role being a retail bank in Russia as it doesn’t really help us at our main Cyprus bank - it is a different brand and has a very different clientele,” Hourican added, noting that the sale would need to be capital accretive and will not be finalized until 2015, providing the Ukraine crisis subsidised by then. “I have introduced a scorched earth policy on foreign units. We are repatriating any overseas stuff that really doesn’t help the core bank and that only eats up capital.” Headquartered in Moscow, Uniastrum Bank provides a range of financial products and services for the retail segment, and the small and medium-sized business community, and accounts for more than half of Bank of Cyprus’s 300 branches and a third of its 7,700 employees. Approximately $576m were paid by Bank of Cyprus to acquire 80% stake of Uniastrum, while the remaining 20% was retained by its founders, according to the news agency. After taking charge of the bank in October 2013, Hourican has also completed the sale of the lender’s Ukrainian business to Alfa Group, as well as a minority stake in Romanian Banca Transilvania and some Serbian loans. In addition, the bank, which had to be bailed out by the European Union in 2013, also intends to sell a £300m portfolio of UK corporate loans and mortgages that it inherited from its takeover of Laiki Bank in the same year.

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