MoBank: the world’s first mobile-only
bank…
Gold medal for ICBC as H1
profit hits $10bn…
Spain’s housing crisis
starts to bite…
UK’s Nationwide plans Irish
retail bank launch…
Absa hits 1m online customer milestone…
DISTRIBUTION
MoBank: the world’s first mobile-only bank
Go deeper with GlobalData
Two former employees of UK bank Egg, the pioneering internet
bank, have founded MoBank, the world’s first mobile phone bank –
and are aiming to pick up 100,000 customers in their first
year.
Steve Townend, who was customer strategy director at Egg, and
Dominic Keen, who had a commercial management role, are looking to
launch their MoBank business in March 2009. The ‘bank in your
pocket’ product will offer a savings account, P2P payments, account
aggregation, bill payments and a virtual prepaid card. It will
allow customers to book cinema tickets, order fast food and
purchase other goods and services through the phone’s m-commerce
platform.
Townend told RBI the product would “revolutionise
transaction banking”. He said it was different to other m-banking
products because it provided a full internet banking experience on
a mobile phone. MoBank will make its money through fees to
consumers using the payment function initially, but said the
long-term business plan was to take commission from retailers.
RESULTS
Gold medal for ICBC as H1
profit hits $10bn
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By GlobalDataChina’s ICBC, the world’s largest banking group, made a CNY64.5
billion ($9.4 billion) profit in the first half of 2008, an
increase of 56.75 percent year-on-year – making it the world’s most
profitable bank. The results came in ahead of HSBC’s $7.72 billion
half-year profit. ICBC’s strong performance was mainly a result of
growth in the bank’s intermediary business. Net fee and commission
income increased to CNY24.8 billion, up 48.03 percent year-on-year.
Net interest income was up 29 percent to CNY131.8 billion
The bank said it would continue to look for acquisitions and
opportunities to establish branches in different countries. Last
year ICBC paid $5.6 billion for 20 percent of South African retail
bank Standard Bank (see RBI 581, 593). It also holds 79.93 percent of
Seng Heng Bank in Macau.
In the first half, ICBC sold CNY1.158 trillion of wealth
management products, up 123 percent, reflecting the growing
affluence of the Chinese population. The bank’s cost-income ratio
was 28.46 percent in the first half.
COUNTRY SNAPSHOT
Spain’s housing crisis starts to bite
Spain’s housing market downturn continues to challenge the
country’s banks. Despite robust results announcements from both
Santander and BBVA, where profit before tax figures were up 15
percent to €6.1 billion ($9 billion) and 11 percent to €4.2
billion, respectively, there are concerns the country’s smaller
players could run into trouble.
While the top two are diversified in a range of countries – BBVA
has operations in Mexico and the US, for instance – smaller banks
are starting to hit trouble in a housing market which the country’s
housing minister said was “in deep crisis”.
In July this year, one of the country’s largest property
companies, Martinsa Fadesa, filed for creditor protection, forcing
an initial €550 million in related bad loan provisions from banks.
The lead creditor for the business was Banco Popular. Sabadell and
Bankinter are also heavily exposed to the Spanish housing
market.
However, it is not anticipated Spanish banks will make anything
like the write-downs seen in the US and UK. Mortgage loans have
largely been funded by deposits, and while there have been
securitisations, loans have generally been held on the banks’
balance sheets.
STRATEGY
UK’s Nationwide plans Irish retail bank launch
Nationwide, the UK’s largest building society with around £200
billion in assets, has announced plans to launch a direct banking
service in Ireland. The society said it was “a prudent strategic
move that will enable Nationwide to further diversify its
geographical operations and funding opportunities in the Irish
Republic”. It will initially offer products by mail, phone and
online.
The move would also allow Nationwide to gain access to the
European Central Bank’s (ECB) liquidity scheme. It would mean the
building society could obtain funding more easily, because the ECB
accepts a wider range of products as collateral in its scheme.
Nationwide insisted it has a strong balance sheet, with Tier 1
capital, the measure most used by regulators to gauge a bank’s
strength, at 8.1 percent, higher than most of its peers.
The launch is likely to be completed early next year.
DISTRIBUTION
Absa hits 1m online customer milestone
Absa, South Africa’s second-largest retail bank, has become the
country’s first to top one million internet banking users.
Absa – 56 percent owned by UK outfit Barclays – said in a
statement it had processed over ZAR660 billion ($85.6 billion)
through its internet banking service in the past 12 months. The one
million figure includes 150,000 business banking customers. An Absa
spokesman told RBI: “The transaction costs of self-service
channels are generally cheaper than branch-based banking or
telephone banking with a consultant. By choosing managed fee
accounts, customers who bank online can bring down costs even
further.”
Absa’s internet banking features include the ability to create
new savings and investment accounts with just three clicks of the
mouse.
RESULTS
€1bn Dresdner Bank loss weighs on Allianz
Allianz, the German bancassurer, saw its Dresdner banking
business register a €1 billion loss in the second half of 2008. At
a group level, Allianz’s overall profit for the first half of 2008
was €3.96 billion, down 35.7 percent year-on-year.
Dresdner, the investment and retail bank Allianz acquired in
2001, has always fitted uneasily within the insurer’s business mix,
particularly the investment bank, Dresdner Kleinwort, where most of
the losses were made.
The loss – and a huge hike in cost-income ratio – was because of
weak revenue as a result of financial turbulence. Mark-downs on
asset-backed securities and other issues at the investment bank led
to a net dealing loss of €627 million in the second quarter.
Operating profit within the retail and commercial side of the
business in the first half was €339 million, down 30.2 percent,
with revenues of €1.72 billion and a cost-income ratio of 78.1
percent.
There is continuing speculation around the future of Allianz’s
retail banking operation. Market rumours have ranged from a
possible sale of the business to a full merger with other German
retail banks, including Commerzbank or Deutsche Postbank.
DISTRIBUTION
JPMorgan says making e-cheque ATM progress
JPMorgan Chase is 20 percent of the way through a campaign to
replace 5,000 of its 9,000 ATMs with machines that can
automatically process cheque deposits. The technology allows
customers to feed cheques into the machine without an envelope. It
then scans the information digitally, allowing automatic electronic
processing. It also prints out customer receipts. E-cheque
processing was made legal in the US in 2004.
The scheme cuts costs, because the bank does not have to empty
the ATM cheque deposit box every day to manually process the
cheques. Instead, it can empty it every time it has to fill the ATM
with cash. A JPMorgan spokesman told RBI the programme –
started this spring – would be completed by early 2010.
The bank said it is installing both Wincor Nixdorf and NCR
machines.
DISTRIBUTION
PNC targets ‘next generation’ of customers
PNC Financial, the US’s 11th largest
banking group by assets, has launched Virtual Wallet, a
comprehensive money management and m-banking solution aimed at what
the bank calls “the next generation of banking customers”. It was
described by Joseph Guyaux, the bank’s head of retail banking, as
“a segment of firsts: first car, first home, first child and
getting married”.
The product features a financial calendar to
create bill reminders; three separate accounts for spending,
short-term saving and long-term saving; and a ‘Punch the Pig’
gimmick to transfer funds from one account to another.
Guyaux added: “We believe this new solution is
the most interactive offering on the market today… that will
empower tech-savvy, Generation Y consumers with an unprecedented
high-def view and control of their money.”
The product has received some encouraging
coverage in the US media and is part of a growing appetite among
banks to offer innovative money management solutions. In Spain,
BBVA recently launched its tú cuentas package; in the US,
Iowa-based West Bancorp launched the peer-to-peer service SmartyPig
earlier this year (see RBI 596, 592).
PRODUCTS
Citibank joins lucrative China debit card club
Citibank China has launched a
Chinese currency debit card after receiving regulatory approval
from the People’s Bank of China, the country’s central bank, last
month. It follows the launch of similar products by UK-based
Standard Chartered and Hong Kong’s Bank of East Asia in the
country.
The cards can be used at more than 140,000
ATMs in China and 380,000 ATMs across the rest of the world,
Citibank said, through its strategic cooperation with China
Unionpay, the country’s only bank card association. In 2005, the
two sides agreed a reciprocal agreement to allow the use of their
cards in each other’s ATMs.
The total number of cards in China, including
debit and credit, is now 1.47 billion, according to a recent China
cards survey in RBI’s sister publication Cards
International.
HSBC, another of the big foreign banks
awaiting approval to issue debit cards in China, told RBI
it is still ironing out technical issues and working with the
central bank on its debit programme. HSBC China spokeswoman Dan Dan
Chang said the bank was aiming for a launch in the fourth
quarter.
PRODUCTS
BankWest ups Australia ante with 10% account
BankWest, Australia’s
seventh-largest retail bank with A$50 billion ($43.3 billion) in
assets – and a bank possibly up for sale by troubled UK parent HBOS
– has increased the savings rates across three core accounts to
record highs as it continues its customer acquisition drive into
the Australian market. BankWest’s Regular Saver account is now
offering a promotional 10 percent rate; its TeleNet Saver product,
8.50 percent; and the Gold Term Deposit, 8.70 percent.
The BankWest Regular Saver account was
launched last year, the first in a line of new products introduced
in conjunction with the bank’s rollout of 160 new branches over the
next three years.
BankWest’s head of mortgages and savings, Paul
Vivian, said in a statement: “A savings account offering 10 percent
is unheard of in Australia and it is very rare for consumers to see
this.”
In terms of rival high-interest savings
accounts, ING Direct Australia is offering 8 percent, Commonwealth
Bank of Australia 7 percent, and Westpac – soon to be Australia’s
largest banking group by assets when the merger with St George
completes (see RBI 592) – is offering 7.05
percent.
DISTRIBUTION
Standard Chartered, Prudential to extend Asia-Pac
partnership
Standard Chartered and UK insurer
Prudential have said they will expand their 10-year-old successful
bancassurance partnership further across the Asia-Pacific market.
The current partnership sees Prudential market and distribute its
investment-linked, savings and protection insurance products to
Standard Chartered customers in Asia, and the new agreement extends
the partnership to 2016.
The updated arrangement also broadens the
markets covered to five, expanding beyond the original Hong Kong,
Singapore and Malaysia to include Japan and Thailand. Prudential
and Standard Chartered also have separate bancassurance
arrangements covering China, Korea and Taiwan, bringing the total
collaboration to eight markets across the region.
In addition to Prudential’s life insurance
products, the agreement also includes deeper cooperation on
accident and health and Takaful Islamic insurance products.
Prudential’s insurance and fund management operations span 13
markets in the region and account for over 50 percent of its new
business profits.
DISTRIBUTION
BofA to invest further in m-banking channel
Writing in the latest edition of US
publication Bank Systems & Technology, Lance Drummond, global
consumer eCommerce executive at Bank of America (BofA), states that
his bank will continue to focus on mobile banking as a growth
channel.
“We have found it has helped deepen our
customer relationships due to the added value our service provides.
We strongly believe it will be a key differentiator in helping us
retain customers going forward,” he writes.
“We opted to develop an in-house mobile
browser as our technology solution. The choice turned out to be a
good one. Within the first six months, we had secured more than
500,000 active users, and that number has since increased to more
than 1 million users as of July 2008.”
Bank of America did five things right, he
concludes: to prioritise information security; to make sure the
service was available across as many mobile devices as possible;
building in scalability and reliability; investing in customer
marketing and education; and keeping an eye on the cost of
investment.
RESULTS
Sharp decline in profits for Bank of East Asia
Bucking the trend for largely upbeat
earnings from China-based banks, Hong Kong-based Bank of East Asia
(BEA) has posted a 51.3 percent decrease in half-year interim
figures to HK$930 million ($119.1 million). Return on average
assets and return on average equity were 0.5 percent and 5.4
percent, respectively, for the period; its cost-to-income ratio
rose to 72.4 percent from 48.7 percent for the first half of
2007.
The bank blamed the “weakness” in global
financial markets for the fall. Non-interest income dropped to
HK$333 million, a decrease of 80.6 percent over the first half of
2007, mainly due to the loss recorded on collateralised debt
obligations and a decrease in net trading profits. Excluding these
factors, non-interest income would have been HK$2.11 billion, 20
percent higher than a year ago.
Total deposits grew by 27.9 percent to
HK$308.1 billion during the reporting period, while total loan
balances rose to HK$245.4 billion, a rise of 21 percent. Chief
executive David Li stated: “We remain confident in our future
earnings, as our core business continues to grow in line with our
expectations.”
REBRANDING
BBVA changes US brands to
BBVA Compass
Spain’s second-largest bank, BBVA, is to
rename its 650 branches in the US as BBVA Compass, merging its
three US subsidiaries – Texas State Bank, Laredo National Bank and
Compass Bank – under one brand. BBVA says it will spend $30 million
on the exercise.
“Even though the business environment is
getting more difficult, the timing is actually quite favorable for
us,” said José María García Meyer, head of BBVA’s US division, in a
statement.
“Some banks are pulling out of some
markets because they do not have the liquidity or because they are
refocusing on core businesses. Some are selling branches, and
retrenching in businesses such as consumer or car loans. Some
players will disappear.”
BBVA acquired Compass Bank, an
Alabama-based regional bank, for $9.6 billion last year, and has so
far spent over $12.6 billion on acquisitions in the US since 2004.
It has now become a leading player across the so-called US Sun Belt
states.
REBRANDING
TD opts for TD Bank brand for US operation
Toronto-Dominion, Canada’s second largest
banking group, is to rebrand its significant US business as TD
Bank, dropping the TD Banknorth and TD Commerce brands nine months
after its bold $8 billion acquisition of Commerce Bank (see RBI 580).
TD had originally planned to rename its
US business as TD Commerce Bank, before being legally challenged
shortly after the merger by Commerce Bank & Trust – a
Massachusetts-based regional bank – over naming rights.
Current Commerce Bank stores will be the
first to be re-branded as TD Bank, which will retain Commerce
Bank’s famous tagline, ‘America’s Most Convenient Bank’, starting
in late 2008. TD Banknorth locations will finish re-branding in
2009. TD Bank will be a top-20 US bank with over $119 billion in
assets and 2,100 branches.
CUSTOMER SERVICE
Nedbank makes more customer promises
South Africa’s Nedbank has upped the
number of ‘customer service promises’ from five to 10 in a
continuing attempt to be seen as South Africa’s most
customer-focused banking group.
Its AskOnce scheme, launched in September
last year, invited customers to challenge banking staff by only
having to ask once for their request to be resolved.
The new promises added to the original
pledge involve shortening queues at branches; improving contact
centre responses; text messages warning of potentially fraudulent
transactions; and credit card delivery convenience. Tom Boardman,
CEO of Nedbank, said: “All our measures show a marked improvement
in our service levels over the last year.”
With ZAR50 ($6.50) donated for each
unresolved complaint, the programme has provided ZAR50,000 in
donations to 12 charities since its inception.
CUSTOMER SERVICE
Banco Sabadell tops Spain’s customer service league
again
Spain’s Banco Sabadell has been declared
number one for quality of service for the sixth consecutive year by
the country’s central bank.
The award is given to the Spanish banking
institution recording the lowest number of complaints lodged with
the Bank of Spain, according to figures published by the central
bank in its annual report.
The service analyses the products
involved in the complaints it receives (deposits, loans and credit
cards) and establishes a ratio of the number of complaints lodged
per €1 billion of average business volume. On this basis, Banco
Sabadell recorded the lowest ratio overall of all Spanish banks,
ranking first in both loans and deposits and second in credit
cards.
ADVERTISING
Bank of America in new Hispanic ad campaign
Bank of America (BofA) has launched a
major ad campaign to promote awareness of its products among
America’s Hispanic population. Hacia Adelante, which translates as
‘moving forward’, is the bank’s latest campaign and includes two TV
ads as well as new radio, print, out-of-home, ATM and point-of-sale
advertising.
The new ads convey the central importance
that a checking account has in achieving life goals such as owning
a first home, paying for college and starting a small business. It
also stresses BofA’s vast distribution capabilities: more than
6,100 branches and 18,000 bilingual ATMs.
CORPORATE SOCIAL RESPONSIBILITY
CBA raises awareness of indigenous issues
Commonwealth Bank of Australia has
announced a plan to increase cultural awareness of Australia’s
indigenous population.
The Australian bank’s Reconciliation
Action Plan is intended to provide educational and employment
opportunities for indigenous Australians while at the same time
providing greater understanding of cultural backgrounds. The plan
is a result of six months of consultation with indigenous groups,
and with Reconciliation Australia, a not-for-profit
organisation.
SPONSORSHIP
Poland’s PKO BP sponsors UK pop concert
In an attempt to communicate with the
large Polish diaspora in the UK and tap into the increasingly
lucrative migrant banking market, Poland’s PKO Bank Polski is
holding a music festival in London in the UK in September.
The one-day festival sponsored by
Poland’s second-largest bank will feature Bajm, Lady Pank, Kayah,
Doda and Monika Brodka, acts largely unknown to British audiences
but household names in Poland.
The bank said around 10,000 music fans
would be able to get free tickets for the show via its website,
while part of the eight-hour event would be shown live on Polish
television.
MARKETING CAMPAIGN
Maybank hails successful sales fair
An estimated 150,000 people attended
Malaysian bank Maybank’s Mega Treats Fair in Kuala Lumpur at the
end of last month.
The annual fair is the largest of its
kind in the country and is centred around cut-price deals on
Maybank banking products for existing customers, using the bank’s
TreatsPoints loyalty system. While the TreatsPoints do not have
expiry dates and can be used throughout the year, the fair is the
main focus for the programme.
“Since the first Treats Fair in 2005,
visitors to the annual event have grown steadily from 43,000 to
110,000 last year,” said Spencer Lee, head of consumer banking.
“This year, we anticipated an increase over 30 percent in the
number of visitors compared to last year. To attract visitors, the
fair has more than 250 merchants, twice the number over last
year.”
