Strategy
Société Générale Insurance launches Russian operation
Sogécap, the insurance arm of French banking group
Société Générale, has been granted approval from Russian regulators
to set up a life insurance company, Sogécap Life Insurance. The
group was also given the regulatory green light to complete its
takeover of Russian payment insurance specialist Soyuznik.
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The two entities – Sogécap Life
Insurance and Soyuznik – will be held jointly by Sogécap (81
percent) and Banque Société Générale Vostok (19 percent). Société
Générale Insurance will now be able to provide insurance products
throughout the group’s existing Russian operations, which include
retail banking, mortgage and specialist finance entities.
Distribution
HSBC to start retail branch network in
Peru
Further expanding its growing South American franchise, HSBC has
received approval from the Superintendent of Banking and Insurance
in Peru to establish a retail branch network in the country.
The UK-headquartered group will initially open ten retail branches
in the capital Lima, and is aiming to open another 30 or so over
the next two to three years. Peru is the fifth most populous
country in the region with around 28 million people, and offers
significant opportunities for further growth, said HSBC. The
country’s GDP growth per capita stood at 8 percent last year, and
is one of the best performing in the region.
HSBC has grown its South American operations over the past decade
from ten offices to a regional network of over 4,000 – the
continent accounted for 8 percent of total group profit before tax
in 2006. The bank entered the Peruvian market in October last year
through its commercial banking division.
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By GlobalDataStrategy
Malaysia’s RHB Group announces ambitious transformation
agenda
RHB Banking Group, the fourth-largest financial
services group in Malaysia, has announced plans for a major
strategic push that it hopes will broaden its presence from China
to the Middle East and make it one of the three largest banking
groups in South-East Asia. According to a media briefing given by
Azlan Zainol, director of RHB Capital, the group is hoping to
double its profitability and market capitalisation by 2010 by
cutting costs significantly.
The programme will see a change in the organisation and reporting
structure of all the companies within the RHB Banking Group. Its
core businesses will be streamlined into strategic business units
comprising retail, corporate investment banking, Islamic and
international divisions, along with four strategic functional
units. The reorganisation is also aiming to cut the group’s annual
operational and capital expenses by 10 percent, or MYR45 million
($13 million).
Strategy
KBC and Absolut Bank detail expansion strategy in
Russia
KBC, the Benelux bancassurer, has outlined its plans for Russia.
During a press conference in Moscow, Nikolay Sidorov, CEO of
Absolut Bank, KBC’s recently acquired Russian subsidiary, said:
“The business plan for the next three years continues to focus on
the development of the banking business in the retail and SME
segments. The key focus in terms of products will remain on
mortgages, car loans, credit cards and deposits for the retail
segment, and on trade finance, working capital and term loans for
the SME and mid-sized corporates segments. We expect the proportion
of retail business will increase from about 30 percent currently to
around 45 percent by 2010.”
Absolut Bank currently has 50 branches and is present in 18
regions. KBC will look to increase the number of branches to around
130 and raise the number of regions in which the bank has a
presence to around 25 by the end of 2010. In addition, Absolut Bank
aims to increase its market share in each region where the bank is
present, and is now continuing to actively recruit new staff
members both for its head office and for the regions.
Insurance products that lend themselves to cross-selling may be
introduced relatively early on, but KBC says a fuller bancassurance
model is unlikely to be introduced in the next few years.
Joint
venture
Wizard and GE Money roll out Indian mortgage joint
venture
Wizard Home Loans, a joint venture between GE Money and Wizard,
Australia’s leading non-bank lender, has announced plans for the
Indian home loan market.
TP Chopra, CEO of GE India, said that the joint venture will invest
$200 million in equity in India, and aims to set up more than 250
branches across the country by 2011. The aim is to revolutionise
India’s mortgage sector by introducing Wizard’s strategy, which is
based on a wealth-sharing model, pioneering owner-operator branches
and customer-focused mortgage solutions. Its initial mortgage
product carries a competitive 9.99 percent interest rate.
GE Money India already offers a range of lending products,
including personal loans, auto loans, credit cards and mortgages.
The country’s home loans segment has been growing at a CAGR of 30
percent since 2001.
Mergers and
acquisitions
China’s Minsheng Bank buys a stake in
UCBH
In the first strategic US investment by a mainland Chinese bank,
Minsheng Bank has announced that it will buy 9.9 percent of San
Francisco-based UCBH Holdings for more than $200 million. The bank
also has the option to raise its stake to 20 percent by the end of
June 2009. This is Minsheng Bank’s first overseas investment, and
comes in the wake of several Chinese banks making moves into
markets abroad.
UCBH owns United Commercial Bank, which focuses on the Chinese
community in the US as well as US companies doing business in
China. It had $10.7 billion of assets as of June, making it
one-tenth the size of Minsheng, which has assets of $112
billion.
United Commercial has ridden a string of acquisitions to become a
national US presence (see RBI 572). It has also expanded
abroad, notably buying 100 percent of the equity interest of
privately held, Shanghai-based Business Development Bank in a $205
million cash transaction in April this year.
Strategy
UK’s Prudential is latest to expand into
Vietnam
UK insurance group Prudential has announced the launch of a
consumer finance business in Vietnam. Prudential Vietnam Finance
Company will offer customers a variety of products including
personal loans, sales finance and home mortgages.
Additional products including credit cards will be launched as the
business develops. Foreign players such as HSBC and Société
Générale have been scrambling to establish a foothold in the
buoyant Vietnamese market, which has been steadily growing for some
years.
This new venture is the first consumer finance company within the
Prudential Group, which is already a leading life insurer and fund
manager in Vietnam – the company is hoping to capitalise on this
brand recognition as it enters the consumer finance market. The new
finance company will offer services through direct sales channels
as well as customer service centres in key cities nationwide, the
first of which has already been opened in Ho Chi Minh City.
Strategy
New ANZ CEO talks up bank’s prospects
Mike Smith, the new CEO of ANZ, has given a bullish assessment of
his bank’s business strategy, putting a particular emphasis on its
Asia-Pacific plans. “I think the ANZ is a fantastic bank. I think
it’s a great business. [Ex CEO] John McFarlane has done a superb
job… and it’s my role to really take it to the next stage,” he
said, speaking at an analyst meeting before officially starting his
new role.
“Australia and New Zealand… are very mature markets. The upside or
the potential is somewhat limited. To actually get substantial
growth, you’ve got to operate in economies with more upside. I feel
that Asia is the obvious choice. It’s on the doorstep.”
Smith added that a group such as ANZ could learn from banks in
jurisdictions such as Hong Kong, in particular with issues such as
distribution and costs efficiency. “If you look at the cost-income
ratios of the various banks [in Australia], it’s pretty good by
global standards. But it’s a question of whether or not mid-60s is
a good ratio or it should be mid-50s or it should be mid-40s or
[as] in Hong Kong, where you can get into the high 20s. There are
significant savings to be made.”
Talking about Australia’s ‘four pillars’ policy – by which the big
four Australian banks cannot merge – he said: “I think now that
time is over. I would welcome further competition. I think it is a
good thing. I think at the end of the day the consumer is always
the one who wins in this.”
Products
BNP Paribas and Orange launch range of co-branded credit
cards
Orange, the mobile network owned by France Telecom, and BNP
Paribas, France’s second-largest banking group, are launching a
range of credit cards; the aim of the two groups is to become
leaders in the co-branded card market in France. In the first
quarter of 2008, BNP Paribas and Orange will market the first joint
product: a co-branded, prepaid Visa card designed for the 12 to 18
age group, intended to help youngsters manage their pocket money
simply and securely.
Throughout 2008 other cards will be added, including a universal
payment card for adults. The card will offer bank and credit
services managed by Cetelem, the specialised consumer finance
subsidiary of BNP Paribas, as well as online services linked to the
Orange mobile network.
Baudouin Prot, CEO of BNP Paribas, said: “This ambitious project
brings together two major brands, which are emblematic in their
markets and united by a very strong spirit of innovation.”
Products
Bank of Ireland offers 10.5% interest on current
accounts
Bank of Ireland (BoI), the country’s second-largest banking group,
has joined a growing number of UK and Irish banks offering
headline-grabbing rates of interest to attract and retain
customers.
To beef up its current account offering, the bank is introducing
credit interest at a market-leading variable rate of 10.5 percent,
a rate that will apply to cleared credit balances up to a maximum
of €1,500 ($2,100). Customers will not be required to make a
minimum monthly deposit or maintain a minimum credit balance to
qualify. The introductory rate is available to new and existing
customers until 24 February 2008, after which time it moves to a
variable rate of 4 percent.
Brendan Nevin, director of strategy and marketing, said: “The
introduction signals Bank of Ireland’s commitment to deliver the
best personal banking package for its customers. Importantly, we
are the only bank to offer credit interest without requiring our
customers to make minimum monthly lodgements. We allow all our
customers to benefit no matter how their credit balances vary from
month to month.”
Products
Citi and Expedia.com expand relationship to include credit
cards
Citi and Expedia.com, the world’s biggest online travel agency,
have expanded their partnership with the launch of the Citi
PremierPass/Expedia.com Card. The launch comes nearly a year after
Citi and Expedia began their relationship with the introduction of
ThankYou Rewards Network on Expedia, which more than 1 million
Expedia customers have joined.
With the new card, travellers earn ThankYou Points for everyday
purchases made with the card, additional points for eligible travel
booked on Expedia.com, and points for the miles they fly on any
airline. “We heard from our customers that they want a way to earn
points for all of their travel and across travel brands. They also
want the ability to redeem their points for travel when they want,
without blackout dates,” said Paul Brown, president of Expedia
North America. “This card does all of that, and we believe it
significantly enhances the value of ThankYou Network on
Expedia.”
Mergers and
acquisitions
CIMB looks to Thailand for earnings diversity
Malaysia’s second-largest banking group, CIMB, is
looking to acquire a near-20 percent stake in Thailand’s ACL Bank,
and will seek to increase its stake yet further if it succeeds,
according to a report from the Bernama state news agency.
“We are not financial investors, we are strategic investors. Our
intention is to grow that stake,” Nazir Razak, CIMB chief
executive, was quoted as saying. “We wouldn’t buy and just stick to
the 20 percent.”
CIMB and China’s top bank, Industrial and Commercial Bank of China,
are vying to buy the 19.26 percent stake held by Bangkok Bank, the
Thai Ministry of Finance announced in September.
Nazir said CIMB “would like to have as much of ACL as we can get
our hands on because we would like ACL to be part of CIMB”. ACL
Bank is the smallest of Thailand’s 14 commercial banks, with assets
totalling THB60.4 billion ($1.78 billion). Its market share is 0.77
percent and it has 11 branches across the country.
Distribution
St George increases distribution momentum
St George, Australia’s fifth-largest banking group,
has announced a new partnership with oil giant BP under which
almost 200 St George-branded ATMs will be sited at prominent BP
petrol stations across Australia, increasing the bank’s ATM
footprint by 20 percent.
The bank has also announced that three new Bank of the Future
branches have been opened in state of Queensland, part of the
group’s ongoing branch expansion programme. According to St George,
these branches herald a “new style of banking in Australia which
offers a dynamic way for customers to conduct their banking”, and
include plasma televisions, touch screen assistance, mood lighting
and comfortable chairs. “Queuing will become a thing of the past
thanks to a unique ticketing system which allows customers to relax
in a comfortable chair and watch television,” said St George Bank
Queensland general manager Rhyll Gardner.
In a promotional campaign, the 1,000th new customer to open an
account at each of the new branches will receive A$1,000 ($900)
from St George. “We’re excited about the opening of [these]
branches, which really marks a new era in retail banking,” said
Gardner.
MARKETING NEWS DIGEST
Promotion
Citi’s Philippines green bag promotion
Citi’s Philippines card division has teamed up with local
supermarket chain SM to promote the use of environmentally friendly
reusable shopping bags, as an alternative to traditional plastic
shopping bags.
Under the joint programme, Citi credit cardholders will receive a
free reusable bag upon presentation of a receipt for at least
PHP500 ($11.20) of items at participating SM supermarkets. “Our
latest campaign has dual objectives: to help our cardholders enjoy
added value as well as enable them to be more environmentally
friendly when shopping,” said Bea Tan, Citi’s cards business
director.
The offer applies to purchases made in October and November, and
the free bags are available until 29 January next year.
Citi rival HSBC has been running its own Green Bags scheme in
Singapore in partnership with local conservation agency National
Environment Agency. In this programme, HSBC gives its customers a
reusable shopping bag with every new product purchase (see RBI
577).
Sports
sponsorship
Scotiabank signs major NHL ice hockey
deal
Scotiabank, Canada’s third-largest-bank, has teamed up with the
National Hockey League (NHL) to become the official bank of the NHL
in Canada. It is the latest in a series of sports sponsorship deals
signed by the bank, to raise its profile with fans of the country’s
national sport.
The bank will also look to benefit from a tie-up with broadcaster
CBC, via its sponsorship of a television programme called
Scotiabank Hockey Tonight.
“This sponsorship is important for us because it touches
Canadians from coast to coast. Our goal is to increase the number
of people who bank with Scotiabank and to deepen relationships with
existing customers. It now has the exclusive opportunity to
nationally market itself as the Official Bank of the NHL for all
banking services including credit cards, wealth management and
commercial services,” a bank spokeswoman told
RBI.
The bank already sponsors three Canadian ice hockey teams: the
Calgary Flames, the Edmonton Oilers and the Ottawa Senators, whose
stadium was renamed Scotiabank Place last year.
Promotional
campaign
Hong Leong launches Blockbuster
campaign
Hong Leong Bank, Malaysia’s sixth-largest bank by assets, has
launched a promotional campaign called Financial Blockbuster, with
the goal of attracting new customers as well as rewarding its
existing ones.
During the campaign, which runs until the end of January, new
credit card customers who take up a balance transfer will pay a
reduced interest rate of 6.99 percent per annum for the first 12
months. New cardholders will also pay the teaser interest rate of
6.99 percent on outstanding monthly balances for the first three
months.
Customers taking out a personal loan during the promotion will be
entered into a prize draw, with a first prize of a Nissan Latio car
on offer.
In a separate mortgage promotion, termed the Mortgage 0-1-2 You
Decide Blockbuster, customers will be able to choose the interest
rate for 10 percent of their outstanding mortgage balance.
“Customers have a choice of 0 percent, 1 or 2 percent per annum
fixed rate, depending on their margin of financing,” said Moey Tan,
chief operating officer at Hong Leong personal financial
services.
Competition
Bank of Scotland’s Golden Ticket ATM
draw
HBOS’s Scottish subsidiary, Bank of Scotland (BoS), rolled out an
ATM-based marketing promotion at the end of September linked with
its support for the country’s totalART initiative, the biggest
sponsorship of modern art in Scotland. During the promotion, anyone
using the bank’s 320 ATMs in Scotland had the chance to withdraw a
Golden Ticket cash prize of £1,000 ($2,033), whether they bank with
BoS or not.
Over the next two years, BoS will invest over £400,000 in Bank of
Scotland totalART, a series of two major modern art exhibitions at
the Royal Scottish Academy, featuring works by Andy Warhol and
Joseph Beuys.
“The Bank of Scotland total-ART Andy Warhol exhibition has been a
tremendous success, and this is the icing on the cake. Anyone using
one of our ATMs is in for a chance to strike it lucky and win
£1,000,” said Karen Tighe, the bank’s head of sponsorship.
Corporate social
responsibility
Bank of America’s $25bn initiative for new Michigan
market
Bank of America (BofA), which completed its $21 billion purchase of
Chicago-based LaSalle Bank from ABN AMRO on 1 October (see
Global retail banking map redrawn as RBS gets ABN AMRO), has
announced a $25 billion community development programme for the
state of Michigan, designed to deliver capital and credit to low-
and moderate-income individuals, families and communities.
BofA’s plan for the region will form an extension of its existing
nationwide community development lending and investment scheme,
which the bank says is worth $750 billion over the next ten
years.
In addition, BofA has announced that it will donate $1 million to
support the Next Detroit Neighbourhood Initiative, a plan designed
to transform one of the most economically depressed US cities into
an economic, social and cultural centre.
Sports
sponsorship
ANZ nets sports deal
ANZ, Australia’s third-largest bank by assets, has
signed a three-year sport sponsorship deal to support a new netball
tournament, the ANZ championship. The championship will feature 69
games and run over 17 weeks from April, with five teams each from
Australia and New Zealand participating.
The title sponsors will be looking to cash in on a TV broadcasting
deal, which means that all of the games will be televised – by Sky
in New Zealand and Fox Sports in Australia.
The championship’s general manager, Tony Holding, said in a
statement: “We’re pioneering semi-professionalism in a woman’s-only
sport through a competition spread between two countries. Without a
cornerstone sponsor willing to back our idea, it simply couldn’t
happen.”
Affinity marketing
Barclays teams up with US broadcaster DirecTV
Barclays has teamed up with US satellite TV broadcaster DirecTV to
launch the DirecTV Rewards Visa credit card. The card offers what
the bank terms “once-in-a-lifetime experience” rewards such as an
all-inclusive trip for two to the Sundance Film Festival, available
for 40,000 points, and lunch at the Playboy Mansion plus a tour of
the grounds.
Cardholders can also redeem points in exchange for DirecTV
programming content. DirecTV, which has 16.3 million subscribers in
the US, will promote the card through billing inserts, direct mail
and e-mail, on its website and interactive channel guide, in its
new subscriber welcome kit and in its monthly subscriber
publication.
