Hungary’s OTP restates 2008 results after new goodwill

GE Money Bank makes gains in Czech

Israel’s Big Two report very mixed FY08

Stanbic Uganda, MTN announce latest African m-banking

Hungary’s OTP restates 2008 results after new goodwill

OTP Group, Hungary’s largest
financial institution, has reported 2008 net income of HUF241.1
billion ($1.1 billion), a 15 percent increase on 2007 but some
HUF62.4 billion less than the bank had initially reported in a
preliminary results announcement on 13 February.

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The group said that the lower-than-anticipated
figure was a result of a worsening economic environment in Central
and Eastern Europe, a region it has expanded into extensively over
the past five years. OTP reported a combined HUF93.6 billion
write-down on its Serbian and Ukrainian subsidiaries, HUF57.8
billion higher than previously reported. The goodwill loss comes
despite OTP opening 46 new branches in Ukraine in Q408.

OTP’s headline figures were, nonetheless,
boosted by its sale of Garancia Insurance, a deal which provided
the bank with net revenue of HUF121.4 billion.

A difficult end to the year saw “deposit
outflows in almost every country” in October and November, said the
group, with a sharp slowdown in mortgage lending in Q4 across its
Hungarian and Russian units. Nonetheless, total retail loans and
total retail deposits both rose by 8 percent over the year as a

Bank Rakyat Indonesia ups
distribution network

According to local reports, Bank
Rakyat Indonesia, the country’s third-largest banking group, has
said it will add 4,000 new ATMs this year to its network as well as
up to 1,500 branches.

With the new units, the bank, majority owned
by the state, could have 6,700 ATMs and over 7,000 branches by the
start of 2010.

Operations director Sarwono Sudarto said Bank
Rakyat Indonesia has ambitions to become the largest lender in the
country, with international service and quality standards.

Indonesia has remained relatively attractive
to foreign banks despite the global financial crisis. HSBC bought
Bank Ekonomi last October; in January of this year, Australia’s ANZ
Group lifted its stake in Panin Bank by 8.4 percent to 38.3

GE Money Bank makes gains in
Czech Republic

GE Money Bank, GE’s Czech retail
banking subsidiary, has reported a strong set of full-year results
for 2008, with pre-tax profit rising by 26.3 percent to CZK3.7
billion ($180 million) and customer numbers rising by 5.3 percent
to almost 960,000.

While the total volume of deposits at GE Money
Bank is low, roughly around 10 percent of each of the three leading
banking groups, in terms of growth, the results compare favourably
to GE Money Bank’s Czech peers.

GE Money Bank, which did not segment out
commercial deposits, witnessed a 20.2 percent increase in overall
deposits in 2008, ahead of Komercni Banka, Ceska sporitelna and
CSOB, which reported rises of 3.1 percent, 9 percent and 6 percent,
respectively (see country survey, RBI 608).

The bank’s consumer loans and mortgage lending
portfolios rose by 20 percent and 17 percent year-on-year

“We understand our customers and their needs.
This is confirmed by the success of our first innovation in 2009:
the Genius Plus savings account,” said Peter Herbert, CEO and
chairman of GE Money Bank.

Online bill payers ‘20%
more profitable’ to banks

A new study from technology provider
Fiserv and consultancy Aspen Analytics has found that US bank
customers who pay bills online are 76 percent less likely to leave
their bank and, furthermore, are between 15 and 20 percent more
profitable than the average customer.

The study, which analysed transactional data
from almost 10 million customers at a leading US bank, found that
every additional bill a customer paid online resulted in an
incremental increase in customer profitability. Frequent online
bill pay users were seen as being four times more valuable to their
bank than the average customer, with those most active in using
such services having account balances that were 79 percent higher
than the average customer.

The trend can also be viewed in reverse,
according to Fiserv, which noted that a decline in online payment
rates was often indicative of a customer’s intention to leave a

MasterCard extends Champions League deal

MasterCard has announced an
extension of its sponsorship of the UEFA Champions League, Europe’s
premier club football competition, which will see the association
continue as an official partner of the tournament until June

It will also sponsor the UEFA Super Cup in
2009, 2010 and 2011 as part of the deal, and joins Heineken, Sony
and Italian bank UniCredit as the fourth Official Partner for the
2009-to-2012 seasons.

MasterCard also sponsors the UEFA European
Championships, which take place every four years, but ended its
longstanding sponsorship of the FIFA World Cup in 2007 following a
legal dispute.

‘Record’ net income in Q109 for Wells Fargo

In the latest in a series of bullish
proclamations by US banks, Wells Fargo has announced it expects to
report “record” net income of $3 billion for the first quarter of
2009. The announcement, which noted the income contribution from
Wachovia “exceeded expectations”, prompted a rally in bank shares
in the US.

Wells Fargo said exceptionally strong mortgage
banking results contributed to its Q1 performance. The bank
originated $100 billion in mortgages over the quarter, while the
unclosed application pipeline also stood at $100 billion, a rise of
41 percent quarter-on-quarter.

The bank added that its acquisition of
Wachovia meant it was now serving one in three US households.

Some analysts remained sceptical, however,
with Frederick Cannon at Keefe, Bruyette and Woods particularly

We believe
much of the positive news in [Wells Fargo’s] preliminary results
had to do with merger accounting, revised accounting standards and
mortgage default moratoriums, rather than underlying trends,”
Cannon wrote in a note to clients.

Poland’s PKO reports strong retail growth

Full-year income at Poland’s PKO,
the country’s largest banking group by assets, was up 7.5 percent
in 2008 to PLN3.1 billion ($1 billion) on the back of a strong set
of retail banking figures.

PKO reported a 60.3 percent increase in
housing loans over the year and a 31.1 percent increase in consumer
loans, with retail deposits increasing by 28.7 percent over the
year. Market share for loans and deposits dipped slightly but PKO
said it retained its status as market leader.

The bank cited a modernised branch network and
the launch of several new deposit and savings products as boosting
its retail performance. PKO also outperformed competitors on net
loans, deposits and income per employee, the bank said.

The one black spot came in the shape of
Kredobank, PKO’s Ukrainian subsidiary, which reported a net loss of
PLN196.3 million versus a PLN2.8 million profit in 2007.

Miami airport becomes latest HSBC ad hotspot

Miami has become the 41st airport in
HSBC’s global airport branding strategy.

As part of a five-year agreement,
the HSBC brand now features prominently across the interior and
exterior of 102 jet bridges at Miami International Airport, one of
the 30 busiest airports in the world, with over 34 million
travelers passing through it each year.

The interior of the jet bridges will display
HSBC’s ‘Points of Value’ campaign. They also highlight the key
benefits of HSBC’s global personal banking service HSBC Premier, a
product the group is investing in heavily as a lucrative revenue
earner for 2009 and beyond.

Last year, Premier customer numbers grew by 22
percent to top 2.6 million worldwide (see cover story, RBI
). Of these, some 260,000 customers reside in the US, up
from 196,000 in 2007.

Jet bridge advertising is a concept pioneered
by HSBC, says the bank itself. It launched at London’s Heathrow
Airport in 2001. Since then it has expanded to 41 airports in 17
countries including Beijing, New York, Sydney and Tokyo.

Japan’s Aozora Bank rolls out virtual services

Aozora Bank, one of Japan’s largest
commercial banks (and fully-owned by US private equity group
Cerberus), has rolled out two major online banking services in a
bid to expand across the country. Aozora, which has only 19
branches despite being one of the biggest players in terms of
assets, has launched a high-interest direct account as well as what
it calls a Virtual Internet Branch.

The online ‘branch’ is being aimed at
customers new to Ao-
zora, states the bank. It has been set up with All Nippon Airways
(ANA) in order to sell what the bank calls “the unique” Aozora Air
Miles time deposit account. Customers will earn ANA miles for
deposits in this new account.

Aozora Bank’s acting CEO, Brian Prince, said:
“This is an additional step towards our announced strategy to focus
on the growth of our retail funding base, as well as our domestic

“In the period from January to March this year
alone, the bank achieved 20,000 new retail customers and increased
deposits by ¥200 billion [$2 billion] and we are focusing on
greater convenience and service delivery for retail customers in

Israel’s Big Two report very mixed FY08 results

Full-year figures for Bank Leumi,
Israel’s largest bank by deposits, and its close rival, Bank
Hapoalim, illustrate the enormous volatility affecting Israel’s
banking industry.

Hapoalim recorded a net loss of
ILS895 million ($235 million) for the year; Leumi, a net profit of
ILS92 million compared with ILS3.36 billion in 2007.

Hapoalim was dragged down in particular by a
pre-tax loss of ILS3.12 billion which it took in the first quarter
of 2008 after selling its entire US mortgage-backed securities
portfolio for $2.55 billion.

Bad debts are also on the rise: its provision
for doubtful debts totalled ILS1.52 billion compared to ILS513
million in 2007 (an increase of 300 percent). Retail deposits
totaled ILS227 billion, an increase of 3.2 percent.

Hapoalim’s current CEO, Zvi Ziv, reconfirmed
his bank’s retail banking plans, outlined in RBI (see
interview, RBI 608
), to invest in distribution in 2009.

He said: “Several ‘Poalim Express’ branches
will open this year. These branches are a major innovation in the
Israeli banking scene, offering retail customers a new and unique
banking experience.”

Bank Leumi’s retail deposits were up 2.8
percent to ILS244.8 billion.

In a rather bleak assessment of the year
ahead, Leumi’s chairman, Eitan Raff, said in a statement: “2009 is
expected to be a year without growth, declining GDP per capita and
a sharp increase in unemployment…

“The new [Israeli] government will need to
deal with the crisis from its first day in office, as its
continuation could have dangerous consequences for the fabric of
Israeli society.”

UAE’s Mashreq launches retail operations in Egypt

Mashreq, the largest private sector
bank in the United Arab Emirates, has started consumer banking
operations in Egypt with a capital outlay of EGP560 million ($99.4

Abdul Aziz Al Ghurair, CEO of Mashreq, said:
“Through our 10 operating branches, staffed with a local team of
270, Mashreq Egypt will provide a diverse range of retail and
corporate solutions.

“The Egyptian banking sector is a key player
in the growth of the country’s economy, especially in light of the
remarkable GDP growth that averaged 7 percent over the past two

Mashreq is also targeting the affluent
segment, opening its first ‘Mashreq Gold’ centre located at its
main branch in Heliopolis. Mashreq Gold is a comprehensive
financial management service that targets VIP clients. The bank
plans to open four additional Mashreq Gold centres across 2009.

Mashreq Group recently reported net income of
AED1.64 billion ($446 million) for 2008, a 13.6 percent decline

Montepaschi sees FY08 profit plummet by 30%

Italy’s Montepaschi Group, which
owns the country’s third-largest retail banking franchise, Banca
Monte dei Paschi di Siena (MPS), has reported net income for 2008
decreased 30.6 percent to €953 million ($1.27 billion).

Net provisions and adjustments to impaired
loans amounted to €1.06 billion, up 20.4 percent. Customer loans
were up 7 percent to €145 billion.

Banca MPS, which merged with local rival Banca
Antonveneta in early 2008 after it was purchased by MPS from
Spain’s Santander, itself reported net income of €1.22 billion.

In terms of the size of profit falls,
Montepaschi fared better than its two big domestic competitors.

UniCredit reported a net profit of €4 billion,
down 38 percent year-on-year, while Intesa reported full-year
profit of €2.6 billion, a 65 percent drop from 2007 (see RBI

Sberbank becomes major sponsor of 2014 Winter Olympics

Russia’s largest banking group,
Sberbank, has become the lead financial sponsor for the Sochi 2014
Olympic Winter Games. Sberbank will finance the key Gornaya Karusel
Olympic venue, which will be home to the Russian National Ski
Jumping Centre as well as the Media Village.

Sberbank’s president, German Gref, said: “As
well as financing Olympic venues, we are helping develop a modern
banking infrastructure for the Krasnodar region.”

Sberbank will also develop a new banking
infrastructure for the Olympic Park and across the whole city of
Sochi. This will include the opening of new Sberbank retail
services, introducing state-of-the-art self-service terminals and
training for thousands of bank staff and volunteers.

The agreement with Sberbank follows the recent
announcements from Rosneft, MegaFon and Rostelecom as Tier 1
sponsors of Sochi 2014. Worldwide Olympic Partners already signed
up include Coca-Cola, Panasonic and Samsung.

Fortis posts €28bn loss; delays shareholder vote

Fallen Dutch bancassurance giant
Fortis has announced a €28 billion ($37 billion) loss for 2008, a
year which saw the near-collapse of the group followed by a
part-nationalisation – and now subsequent protracted
part-acquisition bid by France’s BNP Paribas (see

Fortis said it made a €29.4 billion loss on
the sale of its banking activities to the Dutch and Belgian
governments, though the sale of its Dutch insurance business
generated €2 billion. The group’s insurance operations, around
which it will now structure its business, generated a profit of €6
million in Belgium and broke even internationally, compared with
2007 figures of €522 million and €40 million respectively.

BNP Paribas’ attempted acquisition of Fortis’
Belgian banking operations remains in limbo. Fortis Holding
announced on 1 April it was postponing the shareholder vote on the
deal, planned for 8-9 April, to 28-29 April.

Amex reaffirms strategic commitment to ICBC

Card issuer American Express (Amex)
has become the latest US financial institution to affirm its
commitment to keeping a stake in Industrial and Commercial Bank of
China (ICBC) following a series of other Chinese bank stake
divestments by foreign institutions.

Amex’s commitment to retaining its 0.83
percent stake in ICBC follows a similar pledge from Goldman Sachs,
which said in March it would keep at least 80 percent of its 4.9
percent stake for at least another year (see DealWatch).
The UK’s Royal Bank of Scotland in March sold its entire stake in
Bank of China, with Bank of America divesting part of its stake in
China Construction Bank in the same month.

In a statement announcing the reaffirmation of
the strategic partnership, ICBC said it had issued over 600,000
Amex-branded consumer and commercial cards in China as of end-of
2008, with the total consumption amount exceeding CNY10 billion
($1.5 billion).

Japanese consumer finance firm Promise offloads

Promise, Japan’s second-largest
consumer finance lender, has announced it is to sell a number of
subsidiaries as well as reorganise its branch network as part of
the requirements placed upon it by Japan’s long-awaited Money
Lending Business Law (see RBI 582).

The firm is selling wholly-owned subsidiaries
Tamport and Sun Life to Neoline Capital as well as its entire 66.5
percent stake in Cecile Credit Service and part of its consumer
loans division. It will also convert some staffed branches into
unstaffed branches, reducing its total number of staffed outlets
from 306 to 148 as of April 2009.

Promise, which cited the “extremely difficult”
consumer finance operating environment alongside the new, stricter
lending regulations as a reason for the move, is selling Tamport,
Sun Life and Cecile Credit for nominal amounts of ¥1 each, while
the consumer loans receivable will be sold for around ¥9.4 billion
($94 million).

The new regulations, set to come in to force
at the end of 2009, cap the amount of interest that can be charged
on consumer loans at between 15 and 20 percent dependent on the
size of the loan.

DnB NOR emphasises Norwegian focus

DnB NOR, Norway’s largest bank by
assets, has moved to reassure investors over its retail and other
loan portfolios at a capital markets event held on 26 March.

The briefing, which also encompassed the
bank’s commercial real estate and shipping activities, saw the
bank’s chief financial officer Bjorn Erik Naess announce that DnB
NOR intends to cut NOK2 billion ($300 million) in costs per annum
until 2012 and bring its cost-income ratio down to below 46 percent
by 2010. The bank estimates that total 2009 write-downs will amount
to between NOK8 billion to NOK10 billion.

DnB NOR also said it remained focused on its
domestic market as it attempted to stem concerns regarding its
exposure to the troubled Baltic region. The bank said 62 percent of
its exposure at default was Norway-related, with Norwegian retail
customers accounting for NOK531 billion, or 35 percent, of the
bank’s overall exposure.

DnB NOR added it was ready to begin
negotiations with the Norwegian government over a possible need to
seek financial assistance from the state.

Stanbic Uganda, MTN
announce latest African m-banking venture

Stanbic Bank Uganda, a subsidiary of
South Africa’s largest bank, Standard Bank, has announced the
launch of an m-banking service in Uganda through a partnership with
mobile phone operator MTN.

The launch follows a five-month test period
and will enable customers to send and receive funds free of charge,
with further functionality to be added in future. M-banking and
m-payments continue to flourish in Africa, with the
widely-publicised success of Kenyan m-payments venture M-Pesa being
the stand-out performer (see M-Pesa case study, RBI

Uganda itself will soon witness the launch of
a new m-payments joint venture between UK-based m-banking
specialist Monitise and the Made in Africa organisation. The
venture is expected to expand into other East African countries
such as Tanzania, Ethiopia and Kenya at a later date. And MTN has
announced separately it will bring m-banking to all 21 countries in
which it operates as part of a partnership with technology provider

ANZ, Bendigo top for customer satisfaction

Australia’s ANZ, the country’s
fourth-largest bank by market capitalisation, has won an inaugural
award designed to gauge customer satisfaction with 11 of the
country’s banks.

The Canstar Cannex survey of a sample of 5,000
customers also noted that Bendigo Bank was a “resounding hit with
customers” and that Commonwealth Bank of Australia, “traditionally
‘wooden spooners’ in the area of customer satisfaction”, was
gaining ground. Bendigo Bank won awards for branch service and for
‘friendliest bank’, with US giant Citi triumphing in the internet
banking category.

The study added that ANZ and CBA’s internet
banking operations were nonetheless relative underperformers, with
fees and charges and customer service the two most disliked
features across Australian banks as a whole.


Payments platform Revolution Money raises $42m in

Revolution Money, a US online
interchange-free payments platform launched in 2007, has raised $42
million in funding from a group including a Goldman Sachs affiliate
and existing investors Citi and Morgan Stanley.

Revolution Money, a subsidiary of Revolution,
an investment firm formed by AOL founder Steve Case, has set itself
up as a direct competitor to Visa and MasterCard by offering an
online credit card and money exchange platform.

The funding will be used to improve technology
and promote its credit card among retailers. The card is already
accepted at 650,000 US locations, with plans to expand to three
million by 2011.