Russia’s banks feel the heat from
downturn…
Stable Q1 results from Thailand’s SCB,
BB…
Go deeper with GlobalData
UK’s Tesco Personal Finance sees sharp rise in retail
savings…
RESULTS
Russia’s banks feel the heat from downturn
Sberbank, Russia’s largest banking
group, has reported a 8.3 percent drop in annual income to RUB97.7
billion ($2.9 billion). Retail deposits were up 16 percent to
RUB3.1 trillion while retail loans were up 33 percent to RUB1.26
trillion. A vicious collapse in Russian banking sentiment in the
fourth quarter of 2008 dragged down earnings considerably: loan
impairment provisions raced up 41 percent in Q4 alone. Overall,
provisions increased 80 percent for the year to RUB202 billion.
As of 31 December 2008, Sberbank’s group total
assets under IFRS reached RUB6.74 trillion, up 36.7 percent.
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By GlobalDataThe institution is still sticking to its goal,
announced last December, to become a global banking powerhouse by
2014 (see RBI 604).
VTB Group, the country’s second-largest
banking group, reported net profit of $212 million for the year,
down from $1.5 billion in 2007. Retail deposits were up 12.8
percent year-on-year to $12.1 billion, while retail loans were up
by 71.5 percent to $13.2 billion. Overall its market share of loans
increased to 8.8 percent from 5.9 percent in 2007, while its share
of deposits grew to 5.7 percent from 4.8 percent.
Andrei Kostin, VTB’s president, said: “We
continue to benefit from the ongoing commitment of the government
to provide funding and capital to support the growth of our
business.”
During 2008, the VTB Group completed its
three-year branch-opening programme in Russia, opening 176 new
branches to end on a total of 504. VTB24, the group’s retail
banking brand, served more than 4.7 million individuals.
Privately owned Alfa-Bank, the fifth-largest
banking group in the country, reported its net profit after tax
decreased by 9.2 percent to $230.1 million due to a “significant
increase” in loan losses. The provision rate rose to 6.2 percent
from 2.4 percent as at year-end
2007.
DISTRIBUTION
HSBC adds Washington
State to its US network
HSBC is continuing with a previously
stated plan to expand its full-service US retail banking franchise
by opening a branch in its 14th state in the country, Washington.
The group has opened a retail-focused branch in Seattle, growing
its presence on the west coast of the US to 25 branches.
HSBC’s local brand, HSBC Bank USA, now has 472
branches in the US, with 380 in New York State. It currently
employs 30,000 people in the country and serves over four million
customers.
The UK-headquartered company is evolving its
US franchise away from consumer finance and credit cards towards a
more universal retail banking proposition. Last year, HSBC took a
$10.6 billion goodwill charge on HSBC Finance, its US consumer
finance division, forcing it to start winding down the division and
close around 800 consumer finance branches (see RBI
608).
HSBC’s chairman, Stephen Green, has affirmed:
“The US remains the world’s largest economy and HSBC is committed
to the US, which we see as a core market.”
MERGERS AND ACQUISITIONS
Crédit
Agricole, Generali in three-year Intesa Sanpaolo deal
France’s Crédit Agricole and Italian
insurance giant Generali have formed a shareholder pact around
their respective holdings in Italy’s second-largest banking group
Intesa Sanpaolo.
Under the terms of the three-year agreement –
which involves 10.89 percent of Intesa Sanpaolo’s ordinary share
capital (5.82 percent held by Crédit Agricole; 5.07 percent by
Generali) – the two companies will submit a joint list of nominees
for the supervisory board, and consult on “a common stance on items
that are of strategic interest to one or both parties”.
Crédit Agricole was an investor in Banca
Intesa before it merged with Sanpaolo IMI in 2007. The French group
has also long been touted as a possible merger partner for the
Italian franchise.
PRODUCTS
Citizens heralds success of
Green$ense campaign
Citizens Financial, now a top-10 US
retail banking business by deposits, has reported strong interest
from its customer base for its Green$ense rewards campaign.
Launched last October, Green$ense rewards
customers $0.10 for each electronic payment they make, up to $10
per month and $120 per year. The bank says that, six months on, it
has rewarded Citizens Bank and Charter One customers with nearly $2
million.
Citizens, part of the Royal Bank of Scotland
Group, says it is expecting the annual impact of Green$ense to
double by the end of 2009, given the current enrolment rate. New
customers who enrol by 15 May can earn double rewards – $0.20 per
eligible transaction for a total of $240 in the next year.
Enrolment in Green$ense is free for all
Citizens Bank and Charter One customers with a current account.
They also receive a Green$ense MasterCard debit card made from
recycled plastic.
RESULTS
Stable Q1 results from
Thailand’s SCB, BB
Siam Commercial Bank (SCB),
Thailand’s biggest retail bank measured by branches (953 in all),
has reported first quarter income of THB5.5 billion ($155 million)
– an increase of 39.3 percent from Q408 but a fall of 18.3 percent
compared to Q108.
The bank, which reported strong full-year 2008
earnings in February (see RBI 606), added that the quality
of its loan book has been maintained, with the NPL level at 4.6
percent – slightly better than the 5.1 percent recorded in the
fourth quarter of last year.
Vichit Suraphongchai, chairman of SCB, said:
“Our aim is not simply to weather the current economic storm
relatively unscathed, but to emerge from it as clearly the
strongest and best regarded financial services franchise in the
country.”
Bangkok Bank, the country’s largest bank by
assets, reported net profit of THB4.8 billion for Q109, an increase
of 0.1 percent compared to the fourth quarter of 2008. Total
deposits amounted to THB1.34 trillion, up 2.1 percent over the
three-month period.
RESULTS
Deutsche reports strong
earnings for the quarter
Germany’s largest banking group,
Deutsche Bank, has reported better-than-expected first quarter
figures – though its retail banking arm saw income fall 32 percent
to €206 million ($272 million). Robust investment banking business
was the main driver for the group, which, overall, posted a profit
for the quarter of €1.2 billion.
Nevertheless, provision for credit losses rose
substantially to €526 million, versus €114 million in the first
quarter of 2008, while net revenues of €7.2 billion included
sizeable mark-downs of €1.0 billion.
Josef Ackermann, chairman of the management
board, said: “This was a key quarter for Deutsche Bank… We
generated substantial profitability and returns, even after
absorbing significant legacy-related charges.”
The total number of retail banking clients
rose to 14.7 million, up 63,000 net new clients in the first
quarter of 2009, mainly acquired in Germany and Italy.
Despite weaker retail banking figures,
Deutsche Bank is still planning to add about 400 new branches
across Europe (see RBI 609).
And its purchase of a 25 percent plus one
share stake in German rival Deutsche Postbank, completed in
February, while not being portrayed as a merger, will increase its
exposure to its domestic German retail banking market. Both banks
are maintaining separate brand identities though they are sharing
some products and distribution platforms.
RESULTS
Foreign earnings fall but
domestic business up for NAB, ANZ
ANZ and National Australia Bank
(NAB), Australia’s third- and fourth-largest banks by retail
deposits, have both reported declines in earnings for the first
half of fiscal 2009 as the global crisis begins to make itself felt
in the region.
NAB said cash earnings fell by 9.4 percent
year-on-year to A$2 billion ($1.4 billion), with statutory profit
flat at A$2.7 billion. At ANZ, earnings were down 43 percent to
A$954 million, while statutory profit fell by 28 percent to A$1.4
billion.
Both banks reported sharp rises in bad debts,
with the total credit impairment charge at ANZ doubling over the
year from A$726 million to A$1.4 billion. But net profit after tax
for its Australian retail division rose, however, by 6 percent to
A$694 million.
At NAB, collective provisions rose by A$1.2
billion to A$3.6 billion, while cash earnings at the Australian
retail bank rose by 8.6 percent to A$500 million.
RESULTS
Santander still on top as NPLs rise
in Spain
First-quarter results from Spain’s
Santander have confirmed the bank’s status as a retail banking
powerhouse, with better-than-expected group net income of €2.1
billion ($2.8 billion), down 5 percent from the comparable period
in 2008.
Santander’s retail banking profit fell by 8
percent to €1.8 billion over the same period. The bank’s domestic
market was most severely affected by a group-wide rise in
non-performing loans (NPLs), which rose from 0.75 percent to 2.35
percent on the year at Banco Santander and from 0.59 percent to
1.96 percent at Banesto.
In terms of geographic split, 28 percent of
Santander’s group profit came from Spain; 6 percent from Portugal;
16 percent from UK; and 34 percent from Latin America – making the
continent the biggest earner for the group.
La Caixa, Spain’s largest savings bank,
reported net profit of €567 million, down 9 percent on the year,
with a non-performing loan ratio of 3.4 percent. The bank said it
would further expand its branch network outside of Spain, opening a
branch in Morocco and agency offices in, among others, India, China
and the UAE.
At BBVA, net profit for the quarter was down
by 37 percent year-on-year at €1.24 billion, with a €916 million
impairment loss up 65 percent on the year. NPLs on a group-wide
level rose from 1.1 percent to 2.8 percent, but this remains below
the 3.5 percent industry average, according to BBVA.
It has also announced a new range of retail
products, including a payroll loan, an interest-free salary advance
equivalent to three payroll payments, a free checking account, and
cash back of up to 3 percent on bills paid by debit card.
RESULTS
Handelsbanken, Nordea
outperform on lower Baltics exposure
Swedish bank Handelsbanken has
reported a 21 percent increase in net profit for the first quarter
of 2009, reflecting its lower exposure to the troubled Baltic
region and improved lending margins. The bank reported a first
quarter net profit of SEK2.77 billion ($282 million), up from
SEK2.29 billion a year previous.
The Nordic region’s largest lender, Nordea,
reported better-than-expected first quarter profit of €833 million
($1.1 billion), down 6 percent year-on-year. Both results stand in
stark contrast to Swedish rivals which have invested more heavily
in the Baltics: Swedbank, for example, reported a net loss of
SEK3.36 billion for the quarter compared with a SEK2.9 billion
profit in the first quarter of 2008; and SEB reported operating
profit of SEK1.8 billion, a 25 percent year-on-year fall.
SEB took provisions of SEK1.7 billion relating
to the Baltic region, with Swedbank reporting a near-SEK7 billion
hit on its own exposure to the Baltics and Ukraine. By contrast,
total loan losses and provisions at Handelsbanken stood at SEK869
million, albeit up from SEK107 million a year earlier.
Nordea said its net loan losses stood at €356
million, up from €21 million a year earlier. Non-performing loans
in the Baltics stood at 3.42 percent of lending, but the bank said
that its portfolio was stronger than its rivals’.
MERGERS AND ACQUISITIONS
CIMB ups A-P
ambitions with China acquisition
Malaysia’s second-largest bank, CIMB
Group, has completed the acquisition of a 19.99 percent stake in
Bank of Yingkou, the largest commercial bank in Yingkou City,
China, for CNY348.8 million ($51 million).
As of December 2008, Bank of Yingkou had
CNY18.3 billion in assets, and made CNY305.5 million in pre-tax
profit for the year to 31 December 2008.
“We believe that for a major Southeast Asian
banking franchise, having a strategic link to China is an
imperative for us,” said CIMB Group’s chief executive, Nazir Razak.
“Bank of Yingkou, a dynamic medium-sized bank in a high-growth
region, is the right platform for our entry into China.”
REGULATION
FSA announces new
era
The UK’s Financial Services
Authority (FSA) has announced further details of its plans to more
rigorously oversee the UK banking market. It will now take over all
regulation of retail banking payment and deposit-taking practices
as of November 2009.
The FSA says it will ensure account-switching
services are provided in a more prompt and transparent manner than
in the past, as well as enforcing greater clarity regarding the
quality of information available to would-be bank customers
regarding products and services.
The FSA will replace the Banking Code
Standards Board in overseeing such practices. Areas including
overdraft fees and credit card lending will continue to be
monitored under the Consumer Credit Act, however.
MERGERS AND ACQUISITIONS
Brazil’s
Bradesco ups stake in Portugal’s BES
Brazil’s Banco Bradesco has
increased its stake in Banco Espirito Santo (BES), the second
largest bank in Portugal, from 3 percent to 6.05 percent.
The stake increase, which cost BRL296 million
($136 million), came as part of a BES rights issue that the
Portuguese bank said boosted its core Tier 1 ratio to 8.3 percent
from an end-of 2008 ratio of 6.1 percent.
Earlier stake-purchasing activity by
subsidiaries of Barclays mean that the UK bank currently holds a
2.15 percent stake in BES, according to documents filed by BES on
30 March 2009.
BES reported net income of €402 million for
2008, a 50 percent year-on-year fall.
MERGERS AND ACQUISITIONS
BNP’s Fortis
acquisition finally approved despite Belgian shareholder
fury
BNP Paribas’ acquisition of the
Belgian banking operations of Fortis have finally been given
shareholder approval – at the third time of asking – despite an
acrimonious annual general meeting which saw shoes and other
objects thrown at Jozef De Mey, chairman of Fortis Holding.
The shareholder meeting saw 73 percent of
votes cast in favour of selling 75 percent of Fortis Bank to
France’s BNP Paribas.
The deal means the Belgian government will
take a 11.6 percent stake in BNP Paribas, making it the largest
single shareholder in the French bank which in turn becomes the
largest banking group by deposits in the eurozone.
MARKETING
Itau inks World Cup 2014
football deal
Brazil’s Banco Itaú, in the process
of merging with rival UniBanco in a deal that will create the
country’s largest bank (see RBI 609), has announced that
it has become the first official sponsor of the 2014 football World
Cup.
The competition, which is held every four
years, is scheduled to be held in Brazil in 2014 and Itaú says that
its sponsorship continues a long track record of collaboration with
the country’s footballing authorities.
In October 2008, Itaú announced that it had
signed a six-year, $90 million deal to become the official sponsor
of the Brazilian national football team. The bank also supported
the Brazilian football federation’s campaign to host the 2014
event.
MARKETING
Allianz bucks trend by
extending F1 branding
German insurer Allianz has bucked
the prevailing trend and extended its sponsorship of the Formula
One motor championship for a further two years until the end of
2010.
Allianz, which has been involved in the
competition since 2000, will also remain as a sponsor of the
AT&T Williams team over the same period. “It is a perfect
platform to reach millions of people worldwide every race weekend,”
said Steven Althaus, Allianz senior vice-president, global market
management.
Royal Bank of Scotland will also remain a
sponsor of the AT&T Williams team until 2010 under an existing
contract, but will subsequently cancel its contract as part of a
scaling back of the majority of its sponsorship activity.
Similarly, Dutch bancassurer ING said in
February that it will not renew its three-year sponsorship contract
with the Renault Formula One team when it expires at the end of
2009.
The group will also reduce its Formula One
expenditure by 40 percent this year.
REGULATION
EASB establishes think
tank as it looks to extend global reach
The European Association of
Co-operative Banks (EASB) has said that it will extend its lobbying
activities on an international basis in future in light of the
globalised nature of the financial crisis.
Announcing the move in its 2008 annual report,
the EASB said that it had signed a memorandum of understanding with
the World Organisation of Credit Unions, and that two non-EU member
co-operative banks, Norinchukin Bank in Japan and Caisses
Desjardins in Canada bank, had joined the EASB.
In reviewing its activities in 2008, the EASB
said that it would also seek to establish a think tank composed of
academics from across Europe as a means of analysing the strengths
of the co-operative bank business model.
A new survey released by the EASB in
conjunction with the report showed that, as of end-2007, there were
more than 4,200 local and regional co-operative banks in the EU
with 63,000 branches and 49 million members.
STRATEGY
BNP Paribas rebrands Indian
branch network
France’s BNP Paribas, the eurozone’s
largest bank by deposits, has extended its brand identity further
in India by announcing the renaming of Indian brokerage Geojit
Financial Services.
The brokerage, in which BNP Paribas took a
majority stake in February 2009, will be renamed Geojit BNP Paribas
Financial Services. The bank said the stake increase will help it
to strengthen its Indian branch network.
Geojit currently has around 500 branches in
the country.
“India is a very important country for BNP
Paribas. Beyond the crisis, it will establish itself as an economic
giant of the 21st century, and we are proud to be in a position to
combine our name with Geojit, one of the most successful retail
stock brokerage firms in India,” said Olivier Le Grand, head of BNP
Paribas Personal Investors.
STRATEGY
UK building societies
downgraded by Moody’s
Nine leading UK building societies –
Nationwide, Skipton, Yorkshire, Norwich & Peterborough,
Coventry, Chelsea, West Bromwich, Principality and Newcastle – have
been downgraded by Moody’s after the ratings agency cited grave
concerns over falling UK house prices.
Moody’s said its downgrades were based on a
stress test with UK house prices falling by 40 percent from
peak-to-trough as well as a more severe scenario involving a 60
percent fall.
Nationwide, the UK’s largest building society,
was downgraded from Aa2 to Aa3. The most severe ratings actions
focused on Chelsea and West Bromwich, both of which were downgraded
to one notch above junk status.
The downgrades could affect the societies’
ability to obtain emergency funding from the Bank of England’s
Special Liquidity Scheme.
RESULTS
UK’s Tesco Personal Finance
sees sharp rise in retail savings
UK supermarket chain Tesco, set to
roll-out more comprehensive banking services in the UK this year
(see cover story, RBI 610), has said that savings balances
at its Tesco Personal Finance (TPF) arm almost doubled between
mid-October and the end of February.
Outstanding savings balances at TPF rose from
£2.5 billion ($3.6 billion) in October to £4.5 billion by the end
of February, the retailer said.
Last month a spokesperson for Tesco told
RBI that the firm now had around 500,000 savings
customers. In total, TPF gained 1.7 million new customers across
the business in 2008.
DISTRIBUTION
iPhone m-banking
applications get smarter
MasterCard Worldwide has rolled out
its ATM Hunter application on the Apple App Store. The application,
which MasterCard says is the first of a number of such tools, lets
iPhone and iPod Touch users locate the nearest ATM no matter where
they are in the world.
Separately, Wesabe, a fast-growing US-based
software developer-cum-online community, has introduced a free
application for the iPhone or iPod Touch which lets people view all
of their bank and credit card accounts in one place as well as
track their cash spending.
RESULTS
First-quarter Chinese results show
flat trading
Industrial and Commercial Bank of
China (ICBC), the world’s largest bank by market cap and deposits
(see country survey, RBI 610), has reported an after-tax
first quarter profit of CNY35.3 billion ($5.15 billion), an
increase of 6.03 percent year-on-year.
Across the first quarter, ICBC said personal
loans rose by CNY52.5 billion; credit cards in issue amounted to
42.62 million, an increase of 3.57 million from the beginning of
the year, with the volume of consumption totalling CNY93.6 billion,
an increase of 82 percent.
Bank of China recorded profit of CNY19
billion, down 14.4 percent year-on-year but up 320 percent from
Q408.
China Construction Bank’s pre-tax profit was
flat year-on-year at CNY43 billion. It said 11,376 of its branches
had now undergone its ‘transformation’ programme, helping link
together its 32,622 ATMs and 44 million phone-banking
customers.
