Sutherland insights banking news flash 02092013

BANKING NEWS FLASH 2nd September 2013

Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ............................................................................................................................... 11 Technology .......................................................................................................................... 19 Strategy .............................................................................................................................. 28

2|Sutherland Insights Banking News Flash 02092013

Sales & Marketing HSBC to stop wealth management operations in three MENA nations 02 September, 2013 | BBR http://assetmanagement.banking-business-review.com/news/hsbc-to-stop-wealth-managementoperations-in-three-mena-nations-020913 London-based global financial service conglomerate HSBC is mulling to cease its wealth management operations in three MENA nations including Bahrain, Jordan and Lebanon, as part of its strategy to exit from unprofitable businesses internationally.

Commenting on the issue, a HSBC spokesperson said the company's global strategy for retail banking and wealth management is to offer and grow the wealth business in markets where it can achieve scale.

"Consistent with this strategy, after detailed review of our MENA business, we will discontinue sales of any new Wealth Investment or Wealth Insurance products in Lebanon, Jordan and Bahrain from 07 October 2013," the spokesperson added.

The global lender further said that its existing customers will continue to receive basic services and their wealth investments will be maintained until maturity and the closing decision has not affected any job.

HSBC's wealth management operation comes under its retail and wealth management division, and the lender is mulling to absorb the affected employees in retail and wealth management units.

Under a global review of entire operation initiated by chief executive Stuart Gulliver, HSBC is divesting or shutting down its non-profitable and non-core business units and it has already disposed of or closed approximately 54 operations around the globe since May 2011.

Trading across 80 nations and regions, the bank has a strong market shares across the fastergrowing markets, and is well positioned to benefit from the long-term trends in the global economy.

JMR Infotech enters US market with Virginia office 02 September, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51382 JMR Infotech, a leading provider of end-to-end core banking solutions and technology services, on 2 September 2013 announced its entry into the US market with the opening of a new office in Virgina.

3|Sutherland Insights Banking News Flash 02092013

Direct presence in US will allow JMR Infotech to increase its reach and logistics flexibility across US and enable the company to get closer to the growing clientele in the region.

Strengthening the company's presence in the world's largest economy, the Virginia office will play a key role in helping the company explore opportunities in US banking and financial services (BFS) industry, which is poised to be the biggest industry in US. JMR Infotech anticipates huge potential for growth as US bank technology leaders continue to make decisions in favour of new technology platforms that are key differentiators for their business and enable capabilities quickly at lower cost.

With the entire financial services product suite from Oracle in its portfolio of offerings, JMR Infotech will assist banking and financial services institutions to Build, Run and Grow their IT infrastructure.

JMR Infotech offers end-to-end solutions and services including Core Banking, Direct Banking, Private Banking, Islamic Banking, Investor Servicing and analytical applications such as Enterprise Performance Management, Enterprise Risk Management, Customer Insight and Financial Crime and Compliance Management. The company also has a dedicated Testing Services wing exclusively for the BFS industry. For the lending market, JMR Infotech has its end-to-end loan origination software Lead To Loan. JMR Infotech provides Complete Banking IT Managed Services through its unique Extended Arm engagement model that gives clients the opportunity to reduce investment and Total Cost of Ownership.

"We anticipate many US banking and financial institutions to review their current IT infrastructure and demand best-in-class solutions and services that take their business to new heights," said Jayafar Moidu, CEO, JMR Infotech. "We are committed to help BFS institutions intelligently rationalise their technology costs while delivering state of the art technology that continually makes new products possible and enhances the way products are offered, so that they can build the bank of the future while maintaining an efficient bank of the present," added Jayafar.

First Citizens Bank and 1st Financial Services ink merger contract 29 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/first-citizens-bank-and-1st-financialservices-ink-merger-contract-290813 US lender First-Citizens Bank & Trust Company and 1st Financial Services Corporation have inked a definitive merger agreement.

Already approved by the boards of directors of the companies, the transaction is likely to complete during the first quarter of 2014, pending regulatory as well as the acquirer shareholders approvals.

Based on the contract terms, the US Treasury will receive $8m out of total $10m cash consideration to release 1st Financial Services from the federal TARP program, while remaining $2m will be given to the common shareholders of 1st Financial Services.

4|Sutherland Insights Banking News Flash 02092013

As of 30 June 2013, the acquired entity manages 12 bank offices in western North Carolina communities through Mountain 1st Bank, with $692m in assets, $669m in deposits and $363m.

The branches are situated at Asheville, Brevard, Columbus, Etowah, Fletcher, Forest City, Hendersonville (two branches), Hickory, Marion, Shelby and Waynesville.

First Citizens chairman and CEO Frank Holding Jr., said, "This agreement is a significant opportunity for us to expand our presence in our home state of North Carolina."

Sandler O'Neill + Partners was hired to serve as financial advisor and delivered a fairness opinion to the board of directors of 1st Financial Services pertaining to the transaction.

Instituted in 1898, First Citizens Bank manages 402 bank branches across 17 states as well as the District of Columbia, and delivers an array of financial services to individuals, businesses, professionals and the medical community through a branch offices, telephone, mobile, online banking

GNB Financial Services plans to buy Liberty Centre Bancorp 29 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/gnb-financial-services-plans-to-buyliberty-centre-bancorp-290813 Bank holding company GNB Financial Services and Liberty Centre Bancorp (LCB) have inked an agreement, to merge LCB with and into a wholly owned subsidiary of GNB Financial and its banking unit with and into Gratz Bank.

Gratz Bank operates as a state-chartered lender and is banking subsidiary of GNB Financial, which owns $182m in assets, while LCB is the $28m holding company of Liberty Bank, a federally-chartered stock savings bank.

Based on the agreement, for each share of LCB common stock outstanding, its shareholders will receive cash consideration equal to "adjusted book value per share" at the effective time of the integration.

In accordance with the terms of the transaction, the acquire will invite three of the LCB directors to join an advisory board to the GNB Financial board of directors.

GNB Financial and Gratz Bank president and CEO Wesley Weymers said that the merger will increase their locations, products, and efficiencies to better serve their customers and provide value to their shareholders.

Following approvals of the regulatory agencies as well as LCB's shareholders approval, the transaction is expected to conclude late in the fourth quarter of 2013 or early in the first quarter of 2014

5|Sutherland Insights Banking News Flash 02092013

Telef贸nica trials NFC mPOS system in Czech Republic 28 August, 2013 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=25157 Telco Telef贸nica is set to pilot an app and card reader-based mobile point-of-sale system that supports NFC payments in the Czech Republic.

Slated to launch in September, the mPOS2 trial will see small merchants use a reader from Ingenico and an iOS, Android or Windows app developed by local outfit Monet+.

Retailers enter the amount to be paid in the app and the customer either swipes a Visa or MasterCard mag-strip card, inserts an EMV chip card and enters their PIN or - for low value transactions - taps a contactless card or NFC-enabled mobile phone. Merchants will pay a 2.79% transaction fee during the pilot and local bank CSOB will clear payments Telef贸nica's Josef Puczok told NFC Times that the project means that the telco is the main player, more than just a "value added reseller" playing second fiddle to partners such as banks.

A full roll out of the technology could come early next year and move beyond the Czech Republic to Germany and Slovakia.

Umpqua Bank launches its new flagship store in San Francisco 27 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/umpqua-bank-launches-its-newflagship-store-in-san-francisco-270813 Umpqua Bank has opened a new store concept outlet in San Francisco to provide enhanced banking experience for customers and public at every level.

The branch has installed external screens to provide up-to-the-minute bus schedules and weather information, public meeting spaces and an interactive, 20ft "Catalyst Wall" just inside the main entrance, featuring local companies and experts.

Umpqua Bank president and CEO Ray Davis said, "Our new flagship is the latest iteration, built to reflect the preferences of today's consumers and businesses and empower customers to engage with us in a variety of ways."

The new San Francisco office is equipped with modern facilities to engage consumers and businesses, while offering business owners with the tools, resources and interactive space needed to create and innovate.

6|Sutherland Insights Banking News Flash 02092013

Umpqua's Mobile Concierge associates will deliver account services, connect customers with subject experts, and book one of the store's public conference rooms from anywhere in the store.

It also has a 'Demo Bar', where products from featured businesses will be showcased and it will serve as a centre for demonstrations of all kinds, from financial products and services to coffee and chocolate tastings.

Additionally, the branch will have digital booklets and 'Spark Resource Center', which has been created for businesses and individuals to connect, collaborate and get inspired.

In order to offer San Francisco businesses with access to proprietary and public industry and consumer trend resources, the office will have a 'Data Research Station', which will also cater insight into consumer trends and related business ideas.

Apart from having business lounge, for larger group meetings or sessions; and exchange rooms, the office will also introduce paperless operation instead of printed receipts, as well as a collection of mobile applications

IND Group and PayPal partner to offer P2P payments for European banks 27 August, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51317 Do you know your own bank account number or bank account numbers of your friends by heart? On the other hand, how many email addresses do you know or have in your contact list?

Most people cannot remember their own personal account number, but easily remember email addresses of their friends. An innovative service powered by PayPal and IND Group technology enables you to transfer money to any email address directly from your online or mobile banking platform - without the need for knowing the recipient's bank account number.

PayPal signed a partnership agreement with pan-European provider of online banking platform, IND Group, to offer PayPal money transfer functionalities to bank customers. The companies formed a joint strategy to introduce this standardized online and mobile banking offering in Europe, Middle East and CIS countries.

Email money transfer, powered by PayPal and integrated into IND Group's platform, is a quick and easy way for bank clients to send funds directly from their online or mobile bank. Without knowing the account number of the beneficiary, money transfer can be made by inputting the email address of the beneficiary - friends, relatives or even businesses.

7|Sutherland Insights Banking News Flash 02092013

The sender does not need to have a PayPal account - access to online banking and email addresses of the beneficiaries are the only requirements. The PayPal-powered IND app enables banks to offer person-to-person money transfer services without investing great effort in designing, developing and testing P2P transfer processes in their existing IT environment. By using the PayPal preintegrated IND banking app, banks can start P2P services on a secured base, with low cost and a significantly smaller timeframe.

In addition to email money transfer, the IND app also includes other PayPal functionalities that can be easily integrated into online and mobile banking: creation of PayPal account, instant top-up of PayPal balance from your bank account and withdrawal of PayPal balance to your bank account.

"We're happy to bring together with our partners more simplicity and convenience to consumers.

Our innovative service enables money transfer to any email address directly from customers' online or mobile banking platform. After the first successful implementation with IND Group and Alior Sync in Poland (Alior Bank's fully virtual bank), we hope to expand our platform in Europe. With 132 million active accounts in 193 markets, PayPal offers banking partners a unique opportunity to reach new consumers all over the world."

Ganna Yevtushenko Head of Business Development, PayPal CEE "Our goal is simple: we want to offer more payment choices for customers, create better opportunities for engaging customers and solve problems to make their experience better. The success of the recent implementation of IND GroupPayPal money transfer with Alior Sync, one of the leading banks in Poland, is just a perfect proof of that."

Netherlands plans to divest ABN AMRO in full 26 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/netherlands-plans-to-divest-abn-amroin-full-260813 The Dutch government has set the next 12 months as deadline to divest the bailout lender ABN AMRO in full, in a bid to recover the fund infused during the financial crisis of 2008.

At the outset, the government acquired ABN AMRO for nearly €16.8bn, while subsequent funding reached €27.9bn, the finance ministry said in a statement.

It is expected that ABN AMRO's current market value will be around €15bn, and the government will not be able to book any profit on the proposed sale, media sources reported.

While addressing a press conference, Netherlands prime minister Mark Rutte said, "We will get as good a price as possible."

The chance of selling with a profit is small. We will decide in a year if it is time and in the meantime we will ask ABN AMRO to get ready for a listing."

8|Sutherland Insights Banking News Flash 02092013

In a statement, ABN AMRO chief executive Gerrit Zalm said, "The (finance) minister's plans are the first step towards entering the private market. If parliament agrees, the first opportunity for an IPO would be the first half of 2015."

Most recently, the bank acquired Banco CR2, a small privately owned commercial bank based in Brazil, with total assets of nearly â‚Ź25m as of June 2012

Deutsche Bank plans paperless cross-border payment service in China 21 August, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51241 Deutsche Bank today announced that it will launch paperless cross-border payment services in China via its electronic banking platform − db-direct internet − on 1 September 2013.

With these services, corporates in China will be able to process their payments and foreign exchange transactions, as well as submit their supporting documents electronically directly on db-direct internet when necessary.

With the Bank's electronic banking platform, corporates can also benefit from a flexible authorisation set-up for electronic document delivery. Deutsche Bank's streamlined paperless crossborder payment services via one single platform will enable its clients to centralise their foreign exchange management and significantly improve their operational processes.

On 10 July 2013, People's Bank of China (PBOC) announced the simplification of Operating Procedures of Cross-border Renminbi Business, and the State Administration of Foreign Exchange (SAFE) announced new Foreign Exchange Management Measures for Service Trade on 18 July 2013, which will be effective on 1 September 2013. These regulatory changes have enabled banks to offer more efficient solutions to their clients for their cross-border payments from China.

Carl Wegner, Greater China Head of Global Transaction Banking at Deutsche Bank, said: "We are proud to launch paperless cross-border payment services in China via one single platform, in response to the recent regulatory changes from PBOC and SAFE. By leveraging the robustness and flexibility of db-direct internet, we are able to further simplify payment processes for our clients in China. We are committed to continuously finding ways to help our clients benefit from this type of changes, especially the ongoing internationalisation of the Renminbi, and to enhance their payment experience with Deutsche Bank."

9|Sutherland Insights Banking News Flash 02092013

Sixteen Australian payment service providers agree to introduce MasterPass 20 August, 2013 | BBR http://payments.banking-business-review.com/news/sixteen-australian-payment-serviceproviders-agree-to-introduce-masterpass-200813 MasterCard has reached an agreement with 16 of Australia’s payment service providers to offer its digital payment service, dubbed as MasterPass, to enable users to pay anywhere and anytime.

The 16 providers include Advam, ANZ, Ashop, BuyReply, Card Access Services, Commonwealth Bank, Ctel, EstarOnline, eWAY, IP Payments, Merchant Warrior, NAB, NoQ, Paycorp, Payment Express and Powerfront.

The expansion of MasterCard online payments services will boost the business of thousands of Australian merchants across different e-commerce categories, by allowing users to buy goods and services quickly, easily and securely online.

MasterCard market development and innovation for Australasia head said, "Having so many technology partners onboard illustrates the increasing consumer demand for digital wallets."

"MasterPass technology offers shoppers peace of mind that their personal details are safe, as well as a wider selection of payment options and quicker transaction times, which can ultimately translate into increased customer satisfaction and an uplift in sales."

MasterPass technology was debuted in Australia in February 2013, with a strategy to simplify digital payment structure for the consumers and merchants.

It empowers online merchants to increase the checkout process, assist to decrease the number of abandoned shopping carts, while enabling shoppers to take shortcuts to easily access all their payment, loyalty and shipping information

10 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Finance Scotiabank Q3 2013 net profit declined by 14% to C$1.76bn 30 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/scotiabank-q3-2013-net-profit-declinedby-14-to-c176bn-300813 Canada-based Scotiabank has posted 14% decline in the net profit for the third quarter of 2013, which stood at C$1.76bn, compared to C$2.05bn during the comparable period last fiscal.

Diluted earnings per share stood at $1.37, compared to $1.69 during the same period earlier financial year.

Scotiabank CEO Rick Waugh said that the bank performed well backed by strong earnings growth in Canadian banking and global wealth management businesses, as well as contributions by international banking and global banking and markets.

For the third quarter ended on 31 July 2013, its total revenue on a taxable equivalent basis stood at C$5.6bn, against C$5.58bn during the corresponding period a year ago.

Canadian banking reported record net income attributable to equity holders of C$590m, up by 13% from the same period last year, driven by the acquisition of ING Bank of Canada, strong asset and deposit growth, among others.

International banking posted net income attributable to equity holders of C$494m, an increase of 26% compared to the year ago quarter.

Global wealth management net income attributable to equity holders increased by 18% to C$327m from the same quarter earlier year.

Global banking and markets net income attributable to equity holders was $386m, with a fall of C$11m or 3%, due to ongoing market driven challenges in the capital markets businesses compared to last year.

The other segment including includes group treasury, smaller operating segments and other corporate items, posted a net loss attributable to equity holders of C$94m, compared to a net income of C$414m last year

11 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Loan Profits Were Already Down 14 Percent Before July 30 August, 2013 | Mortgage News Daily http://www.mortgagenewsdaily.com/08302013_mortgage_origination.asp Mortgage loan profits tumbled by 14 percent in the second quarter of 2013 the Mortgage Bankers Association (MBA) said on Friday. Independent mortgage banks and mortgage subsidiaries of chartered banks reporting to an MBA survey said they had an average profit of $1,528 on each loan they originated during the quarter compared to $1,772 on each loan in Quarter 1. In basis points, the average production profit or net income was 75 basis points, down from 86 basis points in the previous quarter.

MBA's Quarterly Mortgage Bankers Performance Report said that, measured by dollar volume, the purchase share of originations increased from 40 percent in the first quarter to 52 percent in the second. This was the first time purchase originations had taken the majority share of originations since the third quarter of 2011. MBA estimates that the purchase share for the entire industry was 36 percent in the second quarter compared to 26 percent in the first.

"While overall volume remained relatively flat, we are seeing a shift in product mix towards purchase originations," said MBA Associate Vice President of Industry Analysis Marina Walsh. "Perloan production costs continue to rise and there are signs of pricing pressure as evidenced by the reduction in secondary marketing income."

Total loan production expenses--commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations--increased to $5,818 per loan in the second quarter, from $5,779 in the first quarter. Personnel expenses averaged $3,808 per loan compared to $3,785 previously.

Companies reporting to MBA regarding their second quarter operations had an average of 261 production employees, ten more than the average reported in the first quarter. However, among those companies which reported in both quarters, the average had increased to 271. Productivity was down slightly to 2.9 loans per production employee per month from 3.1 loans in the first quarter.

The net cost to originate, including all production operating expenses and commissions minus all fee income was $4,207, up from $4,182 per loan. The net cost to originate excludes secondary marketing gains, capitalized servicing, servicing released premiums, and warehouse interest spread.

Secondary marketing income declined to 263 basis points in the second quarter, compared to 274 basis points in the first quarter Lenders reported they had originated an average of 1,921 loans in the second quarter, slightly fewer than in the first quarter when the average was 1,953. Average production income was $439 million per company, down from $442 million. 92 percent of the firms in the study posted pre-tax net financial profits in the second quarter, down from 94 percent of the firms in the first quarter

12 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

RBC Q3 2013 net profit increased marginally by 3% to C$2.3bn 30 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/rbc-q3-2013-net-profit-increasedmarginally-by-3-to-c23bn-300813 Royal Bank of Canada (RBC) has reported a net profit of C$2.3bn for the third quarter of 2013, with a marginal rise of 3% from C$2.24bn during the corresponding period earlier year.

RBC president and CEO Gordon Nixon said that leveraging its strength, scale, and strong capital position, the bank will continue to deliver solid performance, while successfully executing its disciplined growth strategy through a slow growth environment.

Personal & commercial banking division net income stood at C$1.18bn, up by 7% compared to last year, primarily owing to volume growth across all businesses in Canada.

Wealth Management net income rose by 51% to C$236m, from earlier year, largely due to higher average fee-based client assets resulting from net sales and capital appreciation.

Insurance net income declined by 11% to C$160m from a year ago quarter as higher earnings from a new UK annuity contract this quarter were mostly offset by higher claims costs.

Investor & Treasury Services net income stood at C$104m, with an increase of C$53m against a year ago, mostly due to higher revenue and ongoing focus on cost management activities in investor services.

Net income in Capital Markets segment was $388m, down by 10% from a year ago, primarily due to lower fixed income trading revenue.

Serving more than 15 million personal, business, public sector and institutional clients with the help of nearly 80,000 full- and part-time staff, RBC trades in Canada, the US and 44 other countries

National Bank of Canada Q3 2013 net profit rose by 11% to C$419m 29 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/national-bank-of-canada-q3-2013-netprofit-rose-by-11-to-c419m-290813 National Bank of Canada posted a net profit of C$419m for the third quarter of 2013, up by 11% from C$379m during the comparable period last financial year.

For the third quarter ended on 31 July 2013, its diluted earnings per share stood at C$2.39 compared to C$2.14 during the same period earlier year.

13 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Its total revenues stood at C$1.28bn, with an increase of 5% compared to C$1.22bn during the corresponding period a year ago.

Its personal and commercial segment net income stood at $192m, up by 2% compared to $189m, while total revenues increased by $18m year over year owing to higher net interest income.

Net income of the wealth management segment was $52m against $39m, while its total revenues grew by 8%. The improved result was mainly due to an increase in deposit volume and the higher fee-based revenues resulting from growth in assets under administration and under management.

In the financial markets segment, net income summed at $158m, up by $47m from $111m, while the other segments net income stood at $17m compared to $40m during the same period last fiscal

US FHFA demands $6bn from JP Morgan to settle mortgage claims 28 August, 2013 | BBR http://assetmanagement.banking-business-review.com/news/us-fhfa-demands-6bn-from-jpmorgan-to-settle-mortgage-claims-280713 The US Federal Housing Finance Agency (FHFA) is reportedly compelling JP Morgan Chase & Co to pay $6bn to settle cases over sale of bad mortgage bonds to government-backed finance companies.

The housing regulators accused the bank for willingly selling the subprime loans packaged into securities to Fannie Mae (FNMA) and Freddie Mac (FMCC), inspite of being aware that the assets were toxic in nature.

In 2011, FHFA filed a total of 18 lawsuits against financial organizations involving $200bn claim of residential mortgage backed securities (RMBS) sold between 2005 and 2007 to Fannie and Freddie by giving materially false statements about the quality of mortgages.

Fannie Mae and Freddie Mac collapsed during the financial crisis of 2008, and were subsequently injected with nearly $187.5bn by the US government to keep them running. Currently, both are being managed by the FHFA. The lawsuits filed in the federal court in Manhattan alleged that the faulty RMBS was marketed by Washington Mutual and Bear Stearns, which were later purchased by JP Morgan during the financial crisis.

The US based financial services firm is facing a string of legal cases, including infamous London Whale trading scandal, which forced the lender to swallow $6.2bn losses.

Over the last two years, it has incurred nearly $10bn in legal cases and at the end of June 2013, it raised its estimate of losses to more than of its reserves to $6.8bn from $6bn at the end of March this year.

14 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

FHFA has already settled the case with Citi bank for $3.5bn agreement, UBS Americas for $885m settlement and seems to ink a similar settlement with HSBC involving a penalty of $1.6bn

BMO Financial Q3 2013 net income rose by 17% to C$1.13bn 28 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/bmo-financial-q3-2013-net-income-roseby-17-to-c113bn-280813 BMO Financial Group reported net income increased by 17% to C$1.13bn or C$1.68 per share for the third quarter of 2013, compared to $970m, or $1.42 per share during the comparable period last fiscal.

For the third quarter ended on 31 July 2013, its revenues stood at C$4.05bn, with an increase of 4% against C$3.87bn during the corresponding period earlier year.

BMO Financial Group president and CEO Bill Downe said, "BMO's third quarter results confirm the strength of the bank's performance to date in 2013 and reflect the benefits of our disciplined growth strategy, which is well diversified by geography and business mix."

P&C Canada net income stood at C$497m, up by 9% compared to C$459m, while revenue increased by 4% year over year to $1.62bn, backed by higher balance and fee volumes across most products, partially offset by the impact of lower net interest margin.

P&C US net income was $147m, with an increase of 7% from $137m during the third quarter a year ago, while revenues tumbled by 5%.

Private Client Group (PCG) produced strong results for the quarter, as its net income grew by twice to C$218m against a year ago.

Net income in BMO Capital Markets was C$280m, up by 12% compared to the year ago quarter, driven by good performance across our diversified businesses in general, with increases in trading revenue and equity underwriting.

Corporate Services net loss for the quarter stood at C$11m, compared with net income of C$13m a year ago

JP Morgan ordered to pay $50m compensation to Russian investor 27 August, 2013 | BBR http://assetmanagement.banking-business-review.com/news/jp-morgan-ordered-to-pay-50mcompensation-to-russian-investor-270813

15 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Global financial services company JP Morgan Chase & Co has been ordered by the New York State Supreme Court to reimburse $50m in compensation to Russian investor Len Blavatnik, to mitigate losses due to contract violations.

In 2006, Blavatnik's CMMF vehicle deposited $1bn with JP Morgan, and ordered not to invest more than 20% of the fund in mortgage securities.

The court said that the bank invested nearly 60% of Blavatnik's fund in subprime mortgage-backed securities, which sustained huge losses, when mortgage market busted in 2008.

Blavatnik filed a lawsuit in 2009 accusing the US-bank for not honouring its investment norms and claimed more than $100m in compensation.

Commenting on the court verdict, Blavatnik said, "I hope that this decision sends a clear message to JPMorgan that they have to honour their obligations to their clients."

"There are a lot of people out there who, I understand, feel they have been wronged by JPMorgan but cannot afford to take on a huge bank. They shouldn't have to."

JP Morgan said, "We are pleased the court rejected CMMF's negligence claims and found that our investment professionals lived up to their responsibilities.

"We respectfully disagree with the court's interpretation of our agreement with CMMF and are considering our options regarding that finding."

The judge in its ruling said that JP Morgan should pay $42.5m as compensation as well as interest at the rate of 5% a year from 2008

Shadow Inventory down 30 Percent Annually 27 August, 2013 | Mortgage News Daily http://www.mortgagenewsdaily.com/08272013_lps_first_look.asp Delinquency rates and incidence of properties in foreclosure fell again in July, Lender Processing Services (LPS) reports, but more than 4.5 million mortgage loans remain in some category of distress. The company released a preview of its Mortgage Monitor reflecting conditions at the end of July, a key finding of which was a dramatic year-over-year decrease in the pre-sale foreclosure inventory.

The pre-sale inventory was down 2.82 percent from June to July to a total of 1.4 million homes.

Since July 2012 this number has dropped by 30.76 percent. This so-called shadow inventory has been a major concern of the housing industry since the beginning of the crisis as it was feared the sheer size of the backlog of homes that might eventually come into bank ownership would present a significant barrier to recovery.

16 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

The delinquency rate, the number of loans that were 30 days or more past due but not in foreclosure, was down 3.96 percent to 6.41 percent of U.S. homes with a mortgage. This represents a -8.76 percent annual reduction in the rate. At the end of July 3.19 million properties were considered delinquent but not in foreclosure and 1.35 million of those were seriously delinquent, i.e.

90 or more days past due but not in foreclosure.

Florida, Mississippi, and New Jersey were the states with the highest percentage of non-current loans in July.

LPS will release the July Mortgage Monitor with the remainder of its July statistics by September 3.

UBS to pay $4.6m to US securities regulators over unregistered sales assistants 27 August, 2013 | BBR http://primebrokerages.banking-business-review.com/news/ubs-to-pay-46m-to-us-securitiesregulators-over-unregistered-sales-assistants-270813 UBS Financial Services has inked a $4.6m settlement agreement with the multiple state securities regulators, to resolve the charges that its unregistered client-service associates in retail brokerage unit accepted trade orders from clients.

Without registering with the New Jersey Bureau of Securities, the personnel accepted orders for the purchase and sale of securities, which is gross violation of financial regulation, the regulators said.

According to the bureau, the firm did not adequately manage its client services associates who accepted client orders during 2004-2010. The company has agreed to reimburse $98,184.84 in civil penalties to settle the case.

Acting attorney general John Hoffman said, "The conduct our Bureau investigators uncovered violated the state's Uniform Securities Act, our primary law for protecting investors and their hardearned money.

"These violations exposed investors to unnecessary risk and such conduct will not be tolerated, nor go unpunished."

Without accepting or rejecting the findings of fact and conclusions of law, UBS entered into the settlement with the Bureau. It also modified its client transaction processes and supervisory procedures to deal with the violations.

The New Jersey Bureau of Securities chief Abbe Tiger commented, "Over a six year period, UBS failed to recognize a flaw in its order entry systems that allowed unregistered persons to accept customer orders in violation of the Uniform Securities Law."

17 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

The $4.6m settlement amount will be shared among the 50 states, the district of Columbia, Puerto Rico and the US Virgin Islands

Rabobank H1 net profit falls by 14% amid recession 26 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/rabobank-h1-net-profit-falls-by-14amid-recession-260813 Netherlands-based financial services provider Rabobank Group has reported a net profit of €1.11bn for the first half of 2013, a 14% decrease compared to €1.28bn during last fiscal, mainly due to persisting recession.

For the first half of 2013, its income decreased by 6% to €6.44bn, compared to €6.88bn during the corresponding period earlier year.

For the first six months ended on 30 June 2013, net profit at the domestic retail banking division stood at €615m, a marginal decline of 3% compared to the first half of 2012.

The wholesale banking and international retail banking division registered a net profit of €496m, a decrease of 9%, compared to the same period last year.

With net profit of €232m, the leasing segment once again made a fine contribution to group profit.

De Lage Landen's lease portfolio grew by 2% to over €30bn.

Solvency, which is measured as Core Tier 1 ratio, stood at 12.9%; a level that far exceeds the requirements of Basel III. With operations in 47 nations, Rabobank Group manages 766 bank branches across the globe excluding the Netherlands

18 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Technology Digital River debuts Beanstream mobile payment technology 30 August, 2013 | BBR http://bankingtechnology.banking-business-review.com/news/digital-river-debuts-beanstreammobile-payment-technology-300813 US-based e-commerce outsourcing company Digital River has rolled out a suite of mobile payment technologies for iPhones, iPads and Android devices that offer quick and secure transactions in 140 currencies.

Dubbed as Beanstream Mobile, the new mobile payment technology will work as portable card swipe, cash register and comprehensive solution, enabling the merchants to accept encrypted credit transactions on-the-move with white-labeled iOS and Android applications.

Operating with an encrypted card reader and a free downloadable application on the mobile device, it has been designed to be white-labeled by brands and financial institutions.

It allows merchants to swipe or key in credit or debit card data on the spot, accept and track cash and check transactions, and capture online sales while mobile.

For a complete and more accessible analysis, the system integrates all sales workflows and data into one system, enabling merchants to supply receipts, complete with geo-location data, directly from the application through a printed copy, email or text message.

Beanstream Mobile also provides time-savers, including a one-step signature and gratuities screen, and up to two automatic taxes.

Digital River global payments and commerce senior vice president and general manager Souheil Badran said that the present mobile payment technologies have fallen short for merchants with multi-currency operations, in-store and online sales, and inventories.

"Now, merchants will be able to unify their payment channels with one device and accept credit card mobile payments in 140 currencies through an integration with Digital River World Payments' international bank connections," Badran added.

Beanstream Mobile for iPad also gives an exclusive inventory capability allowing merchants to add photos of products and create UPC codes. Using Digital River's flexible API toolkit, users can quickly upload existing inventory and retrieve valuable analytics and sales data.

19 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Kiwoom Securities adopts IBM Flash to boost online transactions 30 August, 2013 | BBR http://ecnandexchanges.banking-business-review.com/news/kiwoom-securities-adopts-ibmflash-to-boost-online-transactions-300813 South Korea-based online trading company Kiwoom Securities has implemented IBM Flash technology, to better administer its growing data volumes, while enabling expedite online trading to a rapidly growing customer base.

Kiwoom, through its four divisions including retail, wholesale, investment banking and investment management, delivers a comprehensive portfolio of financial trading products to over one million corporate and individual customers.

With $2bn in assets, the online financial institution also manages an internet fund mall for retail brokerages and delivers global direct trading services through its home trading system (HTS).

The new technology will help the company to reduce storage latency and help to boost the transaction cycle between the company and the Korea Stock Exchange.

Capable of providing dealers with access to large volumes of data, the IBM FlashSystem easily integrates into customer's storage infrastructure and enhances performance and competence over mechanical storage.

Kiwoom Securities CIO JinMan No said, "Our online business model ensures the flexibility necessary to offer the lowest commissions and highest customer service.

"IBM FlashSystem will contribute to a dramatic increase of the transaction speed which will enable us to eventually enhance our services and hold a dominant competitive position in the industry."

Suitable for supporting competitive customer service in future, the technology also assists the trading venue to operate faster and cost-effectively.

Capital Access Network adds e-lending engine with PayPal 28 August, 2013 | BBR http://onlinebanking.banking-business-review.com/news/capital-access-network-adds-e-lendingengine-with-paypal-280813 Capital Access Network (CAN), an alternative financial products provider for America’s small businesses, has integrated its online lending engine with PayPal, to offer small businesses, especially online merchants, with faster access to working capital.

20 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

With the introduction of the new service, its customers can now have working capital funds deposited directly into a PayPal account or a traditional bank account.

Expressing views on the commencement of the new service, Capital Access Network CEO Daniel DeMeo said the firm's priority is to help small businesses quickly get the working capital they need to grow.

"Online merchants and other businesses that rely heavily on PayPal don't want the extra hassles of transferring money between accounts.

"By offering a direct link to PayPal, we remove one more hurdle that previously stood between business owners and their access to capital," DeMeo added.

To apply for a short-term small business loan, business owners use CAN's online application at captap.com and choose PayPal as their deposit preference for no additional charges.

CAN has assisted in approximately 120,000 fundings, providing small businesses access to over $3bn in working capital in the forms of business loans and Merchant Cash Advances, since its inception, through its subsidiaries.

The firm has given access to more than $400m in loans through its NewLogic Business Loans subsidiary and its online lending platform in just three years

iZettle and Banco Santander launch mobile payments service in Brazil 28 August, 2013 | BBR http://payments.banking-business-review.com/news/izettle-and-banco-santander-launch-mobilepayments-service-in-brazil-280813 Social payments company iZettle in collaboration with the Spanish lender Banco Santander has rolled out its mobile payments service in Brazil, allowing customers to accept card payments with their smartphone or tablet.

Currently, Brazilian people and small businesses can take card payments with their Apple and Android smartphones and tablets by signing up at izettle.com.br and order the iZettle Chip & Signature reader.

Banco Santander do Brazil payments services director Cassius Schymura said the new service delivers secure and flexible mobile transactions with cards, which will allow thousands of small entrepreneurs to have access to a service previously reserved to larger businesses. iZettle co-founder and iZettle do Brasil chairman Magnus Nilsson said, "Brazil is the world's second largest card payment market, and the opportunity for iZettle to equip individuals and small businesses with card payment acceptance is immense.

21 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

"99.7% of companies in Brazil are SMEs and micro merchants and we want to empower them with a cost-effective way to take payments other than cash, so they never have to miss out on a sale again."

Easy to set up, iZettle works with all major payment cards and its merchants will have to pay 5.75% of each transaction.

The iZettle's software metric boxes display revenue, high selling products, transactions, average payment volume and returning customers

22 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

FCA kicks off review into mobile banking risks 27 August, 2013 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=25153 The UK's Financial Conduct Authority (FCA) has published an interim report exploring some early findings of a review into mobile banking services, setting out the possible risks to consumers and areas that firms should consider when developing their services.

The FCA's remit extends to both high street banks and firms not traditionally associated with banking, such as mobile phone networks.

Clive Adamson, director of supervision at the FCA, says: "Mobile banking is an exciting development in financial services, with increasing numbers of consumers attracted to the convenience of banking on the move. With the market growing, now is the right time for us to take stock and, as part of the FCA's forward looking approach, to ensure that consumers are appropriately protected."

Key to this is an exploration of the potential risk to consumers and suppliers including fraudulent access to accounts, malware threats, technology failure and service interruption, consumer awareness issues, and anti-money laundering systems and controls.

"We want to make sure that the industry knows exactly what we're looking into," says Adamson "and consumers have a clearer idea of some of the potential risks."

He says the watchdog plans to conduct a more detailed assessment in late-2013, testing a sample of firms providing mobile banking services. A full review of the FCA's finding will be published in the first half of 2014.

SEC to address technical issues after Nasdaq trading interruption 23 August, 2013 | BBR http://ecnandexchanges.banking-business-review.com/news/sec-to-address-technical-issuesafter-nasdaq-trading-interruptionThe US Securities and Exchange Commission (SEC) is planning to act, following a technical glitch forced Nasdaq OMX to suspend trading for three hours on 22 August 2013.

A meeting of exchange heads and other market participants will be organized to address the technical vulnerabilities of exchanges.

A malfunction in the Securities Industry Processor, which is responsible to consolidate and disseminate price quotes to the wider market, resulted in trading interruption in entire $5.65trn of Nasdaq-listed securities for three hours.

23 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

SEC chairwoman Mary Jo White said, "Today's interruption in trading, while resolved before the end of the day, was nonetheless serious and should reinforce our collective commitment to addressing technological vulnerabilities of exchanges and other market participants.

"As one step, I will work to advance rules that the Commission proposed earlier this year regarding new standards for the trading and other systems that are central to the integrity of our market."

After resolving the problem within 30 minutes, the exchange said, "Nasdaq OMX will work with other exchanges that are members of the SIP to investigate the issues of today, and we will support any necessary steps to enhance the platform."

Due to the trading breakdown, the prices on big technology stocks like Apple, Google and Facebook as well as the value of the Nasdaq index remained frozen.

Most recently, investment bank Goldman Sachs also suffered a trading glitch and it is expected that the error will cause nearly $100m loss for the investment bank.

In May 2013, the SEC has imposed a monetary penalty of $10m against the exchange operator Nasdaq, for its faulty handling of Facebook initial public offering (IPO) held on 18 May 2012, which caused nearly $500m losses for market participants

MasterCard opens big data analytics centre in India 22 August, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51270 MasterCard today announced the launch of an Advanced Analytics Center of Excellence in India.

This new Centre of Excellence will provide world-class data insights to global customers by identifying spending trends derived from the billions of anonymous transactions processed by MasterCard every year, thereby providing a solution for the rapidly growing need of businesses to more effectively leverage big data and analytics, The Advanced Analytics Centre of Excellence has recruited highly qualified analytics talent with payments industry, retail and media experience to provide hands-on support on product development and custom analytics to clients across the world. It is an extension of the MasterCard Advisors' Advanced Analytics group headquartered in New York that works with financial institutions, merchants, governments and other companies around the world, to more effectively leverage big data and analytics to solve their most pressing business challenges, such as enhancing customer acquisition and loyalty.

24 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Speaking at the inauguration ceremony, Kevin Stanton, President, MasterCard Advisors said: "We are delighted to launch the Advanced Analytics Center of Excellence in India. MasterCard Advisors has been a global leader in big data technology, analytics and expertise for over 10 years. We feel India is a very important market for MasterCard, rich in analytics talent and expertise that will assist us in delivering big data solutions on broader scale, globally. This new Center of Excellence in India will build on the success we have established around our proprietary processes and expert analysis of global spending trends, which is a key differentiator for MasterCard."

MasterCard Advisors, the professional services arm of MasterCard Worldwide, provides paymentfocused consulting, information and outsourcing services to financial institutions and merchants worldwide. With its unparalleled category expertise, deep understanding of customer needs and successful track record in addressing complex challenges throughout the payments lifecycle, MasterCardd Advisors delivers customized end-to-end solutions that maximize the value of clients' cards and payments business. MasterCard Advisors shares the goals and vision of its clients, and works in partnership with them to deliver actionable insights that drive tangible impact and financial gain.

MasterCard Advisors is helping to shape the future of data insights by leveraging billions of anonymised, aggregated transactions in a 10 petabyte data warehouse to help financial institutions, merchants, media and government manage their businesses more effectively. Powered by innovation and scale, the Analytics CoE is poised to drive growth in Advisors global businesses that differentiates MasterCard from its competition

Accenture and RSA extend application outsourcing agreement 20 August, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51226 Accenture has signed an extension to its application outsourcing agreement with RSA for five additional years through the end of 2020.

The extended agreement is designed to further reduce RSA's IT costs, enhance its product offerings and online presence, and improve customer service.

Under the agreement, originally signed in 2003, Accenture will continue to provide ongoing development, implementation and maintenance services for RSA's applications that support the insurer's commercial and personal lines operations in the UK, including customer relationship management, claims processing, policy administration and back-office applications.

Giles Baxter, RSA UK & Western Europe Information Systems and Change Director, said: "Making it easy for our customers to interact with us is extremely important and our relationship with Accenture ensures that we're able to do this. The extension of our partnership with them reflects their commitment to delivering a superior service while at the same time offering us cost savings and we look forward to continuing the work we do together to deliver what's best for our customers."

25 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

"Insurers need to evolve continuously to address policyholders' changing needs, and so do their IT systems," said Simon England, managing director and head of Accenture's Insurance industry practice in the UK and Ireland. "I am delighted that we have been able to extend our successful application development and maintenance contract with RSA as this is a testimony to the business value Accenture has helped RSA create since 2003. The new arrangement will build on the work we have already done to further streamline RSA's business processes and improve application design, building and testing."

The initial agreement was extended in 2010 for three additional years through 2015, and has now been extended for five additional years.

The application outsourcing services provided to RSA are being delivered through Accenture Property and Casualty Insurance Services, a business service within Accenture's Financial Services operating group that provides management consulting, technology and outsourcing services to property and casualty insurers. Its services are designed to help insurers achieve profitable growth through product innovation, enhanced customer interactions and reduced operating costs

TSYS and FICO present integrated fraud management platform 19 August, 2013 | BBR http://bankingtechnology.banking-business-review.com/news/tsys-and-fico-present-integratedfraud-management-platform-190813 US payment technology company TSYS and FICO, an analytics software company, have rolled out their integrated fraud management platform to combat fraud by screening the behavioral aspects of cardholder activity, using advanced analytic models to provide real-time decisions.

The new platform is a combination of FICO Falcon Fraud Manager 6 with TSYS' licensed PRIME card and merchant management technology, which will be provided as a hosted service to its licensing clients worldwide.

Integrating in-class neural network models with merchant profiles, the technology even identifies fraud by using adaptive models that change as global fraud patterns migrate.

FICO global fraud solutions vice president TJ Horan said, "With fraud increasing and evolving around the globe, it is more important than ever for financial institutions to protect their customers' exposure to fraud with advanced analytics.

"Falcon's powerful analytics which protect more than 2.5 billion payment cards worldwide, offer TSYS PRIME customers the most effective anti-fraud solution available to card issuers around the world."

Headquartered in Columbus, Georgia, with local offices across the Americas, EMEA and Asia-Pacific, TSYS delivers services to more than half of the top 20 international banks

26 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

National MI Integrated into Fiserv’s Servicing Platform 19 August, 2013 | National Mortgage News http://www.nationalmortgagenews.com/dailybriefing/National-MI-Integrated-Fiserv-ServicingPlatform-1038268-1.html National MI, the newest entrant into the private mortgage insurance business, has completed a system integration with Fiserv’s LoanServ platform. LoanServ handles such mortgage servicing functions as insurance coverage activation, billing transactions and certificate administration for lenders, banks, aggregators and credit unions

27 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Strategy GE plans to quit retail-lending business 02 September, 2013 | BBR http://commercialbanking.banking-business-review.com/news/ge-plans-to-quit-retail-lendingbusiness-020913 General Electric is reportedly considering spinning off the US consumer lending division of GE Capital, in a bid to concentrate on core industrial operations.

It is expected that the firm will launch an initial public offering (IPO) early next year for GE Capital, which issues store credit cards for 55 million US citizens.

Due to heightened regulatory regime, as well as its own concern for expanding exposure to banking sector, might have been contributory factors propelling the firm to take the decision to divest the business or separate it through an IPO, reported media sources.

JP Morgan Chase & Co and Goldman Sachs Group have been appointed to oversee the IPO for GE Capital, whose US consumer-finance business earned $2.2bn in 2012. Overall, the consumer-lending business earned $3.24bn globally last year, with a decrease of 13% from 2011.

Further, the company might also exercise option, including smaller spin-offs or asset disposal, media sources reported.

In June 2013, GE Capital Retail Bank inked an agreement with California-based prepaid card provider Green Dot to divest its reloadable prepaid card business marketed under the Walmart brand.

In March, General Electric reportedly engaged with some firms to divest its 25.3% stake worth $1.8bn in Thai lender Bank of Ayudhya

Germany decides not to divest Commerzbank stake to Santander for lower price 02 September, 2013 | BBR http://retailbanking.banking-business-review.com/news/germany-decides-not-to-divestcommerzbank-stake-to-santander-for-lower-price-020913 Germany's finance minister Wolfgang Sch채uble has made known that the proposed disposal of government stake in Commerzbank to Santander bank will not take place for reduced prices.

28 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Expressing Berlin's unwillingness, Schäuble said in a Bloomberg interview, "It's not the federal government's wish to be an entrepreneur, but I happen to know at what price we took on the stake and where the price is now."

He further said that he was not discussing with any firm or individual about the sale.

During the financial crisis of 2009, the German government infused approximately €18.2bn in financial stimulus and subsequently took a 17% stake in the bank.

In July 2013, it was reported by some sections of media sources that the government is planning to sell some part of its controlling stake in the bank.

MasterCard, C-SAM and DNP to launch NFC wallet in Japan 29 August, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51355 MasterCard, C-SAM and DNP announced today the coming launch of a white-label near-field communication (NFC) mobile wallet service in Japan that enterprises will use to offer their customers more rewarding experiences to retailers and merchants.

The NFC white label services integrate C-SAM’s end-to-end Mobile Transaction Platform (MTP), MasterCard PayPass™ contactless payment solution, and DNP’s flexible and scalable mobile wallet, enabling merchants and retailers to enhance and simplify the shopping experience by offering their customers convenient, contactless, transactional and value-added services via their smartphone.

In addition to enjoying the convenience and security of contactless payment, consumers using this NFC wallet solution can add multiple services, including loyalty cards and mobile coupons, while merchants and retailers can offer special discount programs and deals tailored specifically to meet each customer’s personal preferences, based on their purchasing history.

A joint mobile wallet service integrating C-SAM’s MTP and MasterCard contactless technology was launched in Singapore in August of 2012. This platform also includes StarHub, DBS Bank, and EZ-Link.

For the Japanese deployment, DNP will provide technical support including operational support of the IT infrastructure, custom mobile wallet development services, and provisioning of the SP-TSM service for PayPass.

MasterCard, C-SAM and DNP are aiming to increase the popularity of mobile wallets, extending the convenience, security and value-added applications available through their white label services to merchants, retailers and consumers throughout Japan.

29 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

CrossFirst Bank acquires Tulsa National Bank 26 August, 2013 | BBR http://retailbanking.banking-business-review.com/news/crossfirst-bank-acquires-tulsa-nationalbank-260813 Kansas city-based CrossFirst Bank has acquired Tulsa National Bancshares and its banking subsidiary for an undisclosed sum, to boost operations in the area and offer better services to its customers.

As of 30 June 2013, the acquirer had approximately $630m in assets, which will exceed to $800m post transaction and subsequent merger.

Commenting on the acquisition, CrossFirst chairman Ron Baldwin said the Tulsa market was important as it completes the company's four-market strategy, including Kansas and Oklahoma cities, Wichita, and Tulsa.

"Tulsa National is a well-established bank and has a similar one-location strategy to serve businesses, professionals and their families," Baldwin added.

Founded in 1984, Tulsa National has one branch and $150m in assets, while CrossFirst Bank has $560.6m in assets and one location each in Kansas City, Wichita and Oklahoma City.

Formerly known as CrossPoint Bank, the institution was founded in 2007 by a group of financial executives and business leaders to meet the requirements of business owners, professionals and their families

MoneyGram adds Bangladesh Southeast Bank to money transfer network 23 August, 2013 | BBR http://payments.banking-business-review.com/news/moneygram-adds-bangladesh-southeastbank-to-money-transfer-network-230813 US-based global money transfer company MoneyGram (MGI) has embarked on an agreement with private commercial lender Southeast Bank Limited (SEBL) in Bangladesh, to offer its money transfer services at the bank's branches across the country.

Facilitating easy reach to MGI products and services for the Bangladesh denizens, the contract will strengthen its presence in the country, while increasing the agent network.

MoneyGram South Asia senior regional director Harsh Lambah commented, "Joining hands with SEBL will not only propel our growth in this important market, but will better enable us to meet the growing consumer demand for money transfers to Bangladesh.

30 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

"Collaboration with an expert Bangladeshi bank will give our customers another convenient option to receive money sent by their loved ones."

With the expansion in the country, the people of Bangladesh can send and receive funds in nearly 200 nations, including Italy, the US, Saudi Arabia, Canada, France and Australia, within 10 minutes, subject to local hours and regulations.

SEBL senior consultant Murshid Kuli Khan said, "Our customers' needs come first, and our agreement with MoneyGram will bring added convenience to those whom we serve to offer reliable and affordable money transfer services."

During the financial year 2012-13 Bangladesh received more than $14bn in remittances from migrant workers, which accounts for approximately 10% of gross domestic product (GDP) of the country, a World Bank report points out.

MoneyGram provides money transfer services through a worldwide network of 327,000 agent locations, including retailers, international post offices and financial institutions in 200 nations and regions

Wells Fargo Cutting 2300 Jobs Citing 20 percent Decline in Refi Share 22 August, 2013 | Mortgage News Daily http://www.mortgagenewsdaily.com/08212013_wells_fargo.asp Wells Fargo Bank confirmed on Wednesday that it will be laying off about 20 percent of its mortgage production staff because of a drop in its refinancing business. About 2,300 jobs will be cut from Wells Fargo Home Mortgage principally in North Carolina, Iowa, and Alabama.

The San Francisco-based lender has said it expects its refinancing business to be lower for the rest of the year as higher interest rates cut demand for refinancing. The company had already announced two smaller reductions to its mortgage staff, 350 announced in mid-July and a 758 person layoff announced on August 7th. Three hundred additional jobs will be cut over the next 11 to 17 months as the company winds down eight joint ventures. The company said it had just over 11,400 loan officers at the end of last March.

In a staff memo obtained by a number of news agencies, Franklin Codel, head of mortgage production for the bank, said that refinancing had accounted for about 70 percent of the bank's mortgage applications during the first half of the year but that has now dropped to about 50 percent and was expected to decrease further in upcoming months.

"We've had to recalibrate our business to meet customers' needs," the memo said, "and to ensure we're operating as efficiently and effectively as possible. Unfortunately, displacements within our team are necessary."

31 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Employees were given 60 days notice of the layoffs on Wednesday. The banks said it will try to retain as many staff as possible by finding them other positions at the bank.

Wells Fargo is the country's largest mortgage lender writing and servicing one out of five mortgage loans. The company has written over $100 billion in home loans in each of the last seven quarters.

However it told analysts on July 12 that it did not expect to repeat that in upcoming quarters as mortgage rates rose

Housing Contribution to GDP Will Double by 2015 - Fannie Mae 21 August, 2013 | Mortgage News Daily http://www.mortgagenewsdaily.com/08212013_fannie_mae_forecast.asp Fannie Mae economists Doug Duncan, Orawin T. Velz, and Brian Hughes-Cromwick said today that despite two downside risk factors they see the economy gaining strength for the rest of the year, with economic growth averaging 2.5 percent in the second half after lackluster first and second quarter growth of 1.1 percent and 1.7 percent respectively.

The two exogenous macroeconomic factors that still prevail are the Federal Reserve's announced slowdown of its securities purchases which would likely put additional upward pressure on interest rates and the debate over federal expenditures and the related debt ceiling which have the potential for additional fiscal tightening.

Still, consumer spending is strengthening substantially and manufacturing and nonmanufacturing production indicators are increasing steadily. The mixed jobs report, the economists said, do not change their expectation of a September announcement from the Fed of a timetable to for scaling back its asset purchases and end the program by spring. They expect the Fed will keep the fed funds rate on hold until probably late in the first half of 2015.

Recent housing indicators have been mixed with single-family housing starts down slightly for the third time in four months in June while multi-family starts fell sharply following a surge in May. Leading indicators for single-family homebuilding such as permits rose in June for the third straight month so the writers speculate that the weakness in starts may reflect shortages in labor and available building lots and spikes in some building material costs.

New home sales jumped in June for the third month as inventories continued to increase. The number of completed new homes, however, fell to 3.9 months, tying the record low set earlier in the year. Tight inventory and the rising trend in permits will support building activity for the second half of the year and rising rates have not yet eroded homebuilder confidence which jumped to its highest level in seven years last month.

32 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Existing home sales fell in June after rising for two consecutive months (although the National Association of Realtors announced a strong rebound this morning. Read More: Home Sales up 6.5 Percent; Prices Nearing Pre-Crash Peak) which may suggest some pullback reflecting the increase in mortgage rates. Mortgage applications for purchase have also trended lower in both the conventional and government sectors. Pending sales figures have continued to hold up well.

UK has lost 40% of bank and building society branches since 1989 20 August, 2013 | Finextra http://www.finextra.com/news/fullstory.aspx?newsitemid=25133 More than 40% of Britain's bank and building society branches have disappeared since 1989, although the rate of closures has declined since the turn of the century, according to research.

The study from Nottingham University's Shaun French, Andrew Leyshon and Sam Meek shows that between 1989 and 2012 there was a net loss of nearly 7500 branches.

Although the rise of online and mobile banking are often cited as driving forces in the fall of branch networks, the rate of closures has actually slowed in recent years. Between 2003 and 2012, the rate of decline has been -1.7%, compared to -2.5% between 1995 and 2003.

The research also reveals that branches have been closing at a faster rate in more deprived parts of the country, with the least affluent third of the population bearing the brunt of two thirds of net closures from 1995 to 2012.

Between 1995 and 2012, regions defined as "traditional manufacturing" and "built-up" areas characterised by above average unemployment rates and renting - lost 39% of their network.

French told the BBC that this could potentially push vulnerable people into the arms of "more predatory forms of institutions" such as payday lenders with very high interest rates.

The report's authors suggest that, despite the move towards digital banking, the branch has seen its place in society reappraised since the financial crisis. Branches "provided a sense of material security about the tangibility of the financial system to anxious customers" post-2008, they contend.

Banks have appreciated this, with the likes of Lloyds TSB and NatWest featuring branches more prominently in their advertising and the new Metro Bank using its place on the high-street as its main selling point.

Nevertheless, closures continue: this week it has emerged that HSBC is closing another five branches, blaming a lack of customers as people use online and mobile services.

Recently RBS subsidiary Ulster Bank says it will close up to 40 branches and lay off hundreds of employees across the island of Ireland as customers move to digital channels.

33 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

The trend is Europe-wide: Deutsche Bank says that the number of bank branches in the EU fell by 2.5% last year and predicts that massive cuts are ahead for southern counties such as Spain and Italy where networks are still substantial

UK’s Payments Council forecasts robust growth in payment industry by 2022 19 August, 2013 | BBR http://onlinebanking.banking-business-review.com/news/uks-payments-council-forecasts-robustgrowth-in-payment-industry-by-2022-190813 The UK Payments Council has predicted that the consumer card use will increase by 75% from nearly 10 billion payments in 2012 to nearly 17 billion in 2022, backed mainly by increased debit card use and acceptance.

In UK Payment Markets 2013 report, the council has forecasted that consumer cheque transactions will continue to decline from 477 million cheques in 2012 to around 186 million in 2022.

The mobile payments and internet banking will boost consumer use of one-off payments from their accounts from 356 million payments in 2012 to nearly 1.5 billion in 2022, the report added.

It is likely that the number of cash payments will decrease from 21 billion in 2012 to around 14 billion in 2022, as people increasingly use alternatives such as cards and automated payments.

The council is considering introducing a new service to make secure account to account transfers using only a mobile phone number, as many people are likely to make payments to using phones and tablets by 2022.

Payments Council chief executive Adrian Kamellard said, "As an industry we need to make sure that we not only encourage and support on-going innovation, but also make sure that we don't lose sight of our tried and trusted payment methods.

"Over the coming decade we will see major innovation with the introduction of our Mobile Payments Service in 2014, the Current Account Switch Service next month and of course all the innovations brought to market by individual players within the payments field."

Warsaw Stock Exchange agrees to buy 30% stake in Aquis 19 August, 2013 | Finextra http://www.finextra.com/news/announcement.aspx?pressreleaseid=51203 Warsaw Stock Exchange, the largest Exchange in Central Europe, and Aquis Exchange, the proposed pan-European equities trading exchange, announced today that they have entered into agreement to form an alliance.

34 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3

Under the terms of the agreement, WSE will acquire shares representing 30% of the total vote at the Aquis Exchange General Meeting and the same share of the company's dividends and will have a right to nominate two non-executive directors to the Aquis Exchange Board of Directors. The total transaction value is GBP 5m and will be covered by WSE's financial reserves.

The investment aims at diversifying sources of WSE Group's revenues and strengthening its recognition and international position in the global financial markets, including further reinforcement of WSE's role as a financial centre in the region.

The agreement is in line with WSE's strategic interest in developing a financial hub for Central Europe in Warsaw. Any potential plans of Aquis Exchange concerning operations in the region will be settled with WSE. The Polish capital market creates huge opportunities for WSE and is definitely our main focus, however, in a competitive and highly challenging environment, business diversification at an international level is a must for our company. The recent acquisition of organized commodity markets in Poland and investment in Aquis Exchange are examples of this strategy.

Internationalization is also fundamental for the business we run. WSE is already the biggest exchange in the CEE region, with some 65% share in equity turnover (as at June 2013), but we are still looking for new opportunities. Our objective is to do this with brave visionaries such as the Aquis Exchange team. - said Adam Maciejewski, President & CEO of Warsaw Stock Exchange We are very pleased that WSE has chosen to partner with us as part of its international strategy. For us, independence is an important principle and thus having an industry backer of WSE's caliber, but which is not a client or a competitor, is hugely beneficial. This investment secures our position ahead of our launch in October. We look forward to working with WSE as we bring the subscription pricing model to pan-European equities. - said Aquis Exchange CEO Alasdair Haynes, commenting on the agreement

35 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h 0 2 0 9 2 0 1 3