Santander kicks off  UK

Santander has begun the rebranding
of more than 1,000 Abbey and Bradford & Bingley branches and
said it aims to complete the exercise by the end of January.

The bank also said plans to rebadge around 300
Alliance & Leicester branches later this year remain on

In an upbeat statement at a press conference
to mark the passing of the Abbey and Bradford & Bingley brands,
Santander chairman Emilio Botin said it aims to be the UK’s top
bank, suggesting it may look to snap up more assets from weakened
rivals such as Royal Bank of Scotland (RBS), Lloyds Banking Group
and Northern Rock.

Botin said Santander had plenty of scope to
pursue organic growth in the UK but would look to grab further
opportunities “as they come up”.

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In terms of branches, Santander ranks fifth in
the UK, behind Lloyds, RBS, Barclays and HSBC, but punches above
its weight in terms of total retail deposits, with a 10 percent
market share, ranking third behind Lloyds and RBS.

UK CEO Antonio Horta-Osorio said the
rebranding and associated marketing campaign fronted by Formula 1
racing driver Lewis Hamilton would cost around £30 million ($49.1

“The success of our UK business has given us
the confidence to move to the Santander name now and with it
deliver the next phase of our transformation programme and make
1,300 branches available to our 25 million customers in the UK,”
said Horta-Osorio.


China’s Alipay to top PayPal

China’s leading payment platform
Alipay is expected to top US payment provider PayPal by transaction
value in two years, becoming the world’s leading e-payment service,
according to Alipay president Polo Shao.

Alipay, a unit of Alibaba Group, says it
handles more than CNY1billion ($146.5 million) in transactions
daily, and will reach an annual transaction volume of CNY1 trillion
in two years, topping PayPal and becoming the world’s largest
e-payment firm.

In July 2009, the firm reported that the total
number of users – as opposed to just ‘active’ users – reached the
200 million user milestone, compared with PayPal’s 180 million
users in 190 countries and territories.

Alibaba also operates Taobao, China’s largest
online retail website.


Tesco reports strong market
share gains

Tesco Bank, the UK-based financial
services unit of the world’s fourth-biggest retailer, has kicked
off the New Year by reporting strong products sales growth.

It said its credit cards in issue are up 10
percent compared with a year ago with 1 in 10 credit card
transactions in the UK made with one of its cards.

A Tesco spokeswoman told RBI the company has
also enjoyed strong sales growth for its savings account and loan
products, up 30 percent and 19 percent respectively, compared with
a year ago.

The recently rebranded Tesco Bank, which
already has around 6 million customers in the UK and plans to open
30 in-store branches in 2010, continues to target the launch of
mortgage products and a current account in the next year.

Last year, Tesco teamed up with Fiserv as its
principle IT partner to supply its core banking platform. In a
presentation to analysts on 20 November, Tesco said its financial
services division, which incorporates banking, insurance and
telecoms, would seek to more than double its annual profit to £1
billion ($1.7 billion) over the next few years (see RBI 623).


Erste study reveals cautious

Austrian banking is set to continue
its steady recovery this year, according to a study from the
country’s second-largest retail bank, Erste.

The report forecasts an increase in credit
volume of around 3 percent over the next 5 years and a growth rate
for deposits of around 5 percent per year.

The study also highlighted Austrians’
continued savings appetite. The savings ratio – the ratio between
disposable income and money that goes into savings – is 12 percent
in the country, compared to the eurozone average of around 9.3
percent and an average for the EU27 group of countries of 6.2

“For a long time, international banks
condescendingly smiled at the concept of a savings bank, but now it
is quite modern again,” said Elisabeth Bleyleben-Koren, CEO of
Erste Bank der oesterreichischen Sparkassen.

She said deposits at Erste’s Austrian-based
unit grew from €50.4 billion ($72.46 billion) at the end of 2008 to
€51.2 billion at the end of the third quarter, though total sector
savings shrunk during the period from €276 billion to €268

“We acquired 35,000 new customers alone in the
first three quarters of 2009,” Bleyleben-Koren added.

“Our business model is resistant to crises and
our group is growing – not at a revolutionary pace, but


QNB beats forecasts with 15%
rise in annual earnings

Qatar National Bank (QNB), the Gulf
State’s biggest bank by assets, has posted an increase in net
earnings for fiscal 2009 of 15 percent to QAR4.2 billion ($1.1
billion), ahead of analyst forecasts, boosted by a rise of almost
one-third in net interest income.

The bank also reported strong asset growth, up
by 18 percent to QAR179.3 billion, while deposits rose by 20.7
percent to QAR125.9 billion.

QNB group CEO, Ali Shareef Al-Emadi, said:
“The outstanding financial results for 2009 clearly reflect the
bank’s success in achieving a strong growth across all activities,
while at the same time effectively managing risks.”

He added that QNB had little exposure to
troubled Dubai World compared to a number of its rival banks in the


ICBC prepares to ramp up
customer service

Industrial and Commercial Bank of
China (ICBC), the country’s largest bank by assets, has announced
that 2010 will mark the beginning of a customer service programme
in which the bank will use “all available tools at its disposal” to
improve quality of service, with new channels and new products in
the pipeline.

ICBC has selected 10 business areas on which
it will focus its attention: outlet services, electronic banking
services, floor services, service supply, service details, service
standard, monitoring of customer satisfaction, internal service
commitment and staff training.

Over the past few years, ICBC stated it has
already renovated and restructured 56 percent of its branch
outlets, and has made strong progress in resolving excess waiting
times for customers at its busiest branches.

But similar improvements are also scheduled
for the bank’s other channels: ICBC says it now has over 56,000 ATM
and self-service terminals across the country, with 10 million
transactions being performed every day and almost 50 percent of
overall banking transactions now processed away from the


Virgin buys UK bank, prepares
consumer push

Virgin Money has begun a full-scale
push into the UK retail banking sphere with the acquisition of
Church House Trust, a regional bank offering mortgage and deposit
products in the south west of England.

The acquisition gives Virgin Money a UK
banking license and will, the firm said in a statement, “provide
the platform from which Virgin Money will develop a retail banking
business in the country – offering a full range of products to
consumers under the ‘Virgin Money’ brand. The nature of that
offering is still under consideration, but could involve Virgin
establishing Virgin Money ‘shops’ across the country.

“Virgin Money will provide a better, different
form of banking to its customers, increasing competition in the
sector,” said Jayne Anne Gadhia, chief executive of Virgin

“Our aim is to make ‘everyone better off’ in
the way we do business by offering good value to customers,
treating employees well, making a positive contribution to society
and delivering a growing profit to shareholders.”

The business is widely considered to be the
frontrunner to acquire the ‘good’ parts of Northern Rock, the
nationalised lender spilt into two units at the beginning of
January. The ‘good’ arm, still currently government-owned,
constitutes £19 billion ($30 billion) in savings and £10 billion in


Central Bank of India signs up
to sponsor Commonwealth Games

State-owned lender Central Bank of
India (CBI) has become the official banking partner for the
Commonwealth Games to be held in Delhi in 2010 and plans to launch
a number of promotions in conjunction with the event.

The bank’s 3,500-strong branch network will
sell tickets and merchandise for the games, due to start on 3
October, and will also set up a branch in the Commonwealth Games
headquarters. CBI said the worldwide reach of the games will help
aid it in becoming a global bank and attracting business from
non-resident Indians.

[The deal] is in keeping with Central Bank of
India’s wonderful track record of supporting sport in India,” said
Suresh Kalmadi, organising committee chairman for the 2010

“The bank has associated itself with many
events including the 1982 Asian Games, many tennis tournaments and
veterans` hockey series.”


China Construction Bank,
Santander discuss rural alliance

China Construction Bank (CCB) and
Spain’s largest bank, Santander, are planning to set up a joint
financial holding company and open 100 village banks in the country
over the next three years, according to an article in China

The joint venture is likely to be set up with
registered capital of CNY3 billion ($439.3 million) according to
the paper, with CCB investing CNY1.8 billion and holding a 60
percent stake.

The CCB proposal would create the first
financial holding company in the country, and “a new model to
develop rural finance..[but] is yet to be approved by the State


Royal Bank of Scotland begins
branch divestment process

The UK’s Royal Bank of Scotland
(RBS), forced to divest over 300 branches by the European
Commission following its acceptance of state aid from the UK
government, has begun the process by issuing a tender document for
the proposed sale.

RBS is understood to have set a deadline of
the end of January for registering interest in the network,
comprised of 312 RBS-branded branches in England and Wales and six
Natwest branches in Scotland.

The bank has also continued to dispose of
other assets, including part of its asset management business to
Aberdeen Asset Management for £84.7 million ($137.6 million) in
January. RBS is also thought to be close to finalising the sale of
its 51 percent stake in commodities joint venture RBS Sempra, a
stake which is thought to be worth $4 billion.


Barclaycard unveils Waterslide

The UK’s Barclaycard has announced
the follow-up to its groundbreaking ‘Waterslide’ advertising
campaign of 2009, a huge success on television, the internet and
the Apple iPhone (see RBI 620).

Again designed to communicate the ease of
using contactless payments, the advert sees a commuter travel from
home to the office via a high-rise rollercoaster.

Filmed in New York and Hollywood, the advert
will air on UK television from 24 January, and will be launched on
YouTube and Barclaycard’s Facebook page on 22 January.

Barclays expects to reach over 10 million
people through its Facebook page, which will act as a hub for
information about the commercial.

“The success of our Waterslide advert was
absolutely fantastic and we have built upon that with Rollercoaster
which is another great metaphor for how Barclaycard makes payment
so simple for our customers,” said Paul Troy, head of advertising
and content at Barclaycard.

“It again breaks boundaries for Barclaycard
and is the most technically advanced commercial we have ever

Mergers and acquisitions

FirstRand looks to Nigeria,
registers interest in acquisitions

FirstRand, South Africa’s second
largest bank by assets, has confirmed that it is interested in
establishing a retail banking business in Nigeria – with both
organic and inorganic growth on the cards.

A spokeswoman for the bank told RBI that
FirstRand had made no secret of its desire to set up a retail bank
in the country, and confirmed that it had registered its interest
with the Nigerian Central Bank as the prospect looms of foreign
players acquiring troubled Nigerian lenders.

“Retail is the big opportunity in Nigeria over
the longer term. It depends what asset you buy, but certainly we
are interested in investment banking, corporate banking and retail
banking,” the spokeswoman said.

“We think all of those markets are

Around 10 Nigerian banks are up for sale after
all failed a central bank audit in 2009, and FirstRand rival
Standard Bank is also thought to have registered interest in the
distressed institutions with a view to tapping the country’s
heavily unbanked market.


SocGen issues profits warning
on risky assets

France’s Société Générale (SocGen)
has issued a profits warning for the fourth quarter of 2009,
indicating that it will only achieve “slight profit” as a result of
a €1.4 billion ($2 billion) hit on collateralised debt obligations

Citing the “resilience” of the international
retail banking networks in Central Europe and the Mediterranean
Basin and “solid activity levels” in the French Networks, as well
as a new management team, the bank said it was “in a favourable
position to go into 2010 with confidence”.

“Regarding assets at risk, and taking into
account the contrasted signals coming from the US residential real
estate market in the fourth quarter, the group has decided to
subject much stricter assessment to the valuation assumptions of
CDOs of RMBS [residential mortgage-backed securities],” SocGen said
in a statement.


PNC launches P2P payment

PNC, the fifth-largest bank in the
US by assets, is blazing a trail with new m-payments technology
that enables customers to transfer money to anyone with a bank
account in the US using only an email address or mobile phone

The service, developed in conjunction with
m-payments vendor CashEdge, is free for all PNC customers and
available as part of the bank’s existing online banking system
which enables money to be sent without customers sharing account

The CashEdge programme, known as POPmoney, is
an upgrade of the firm’s existing money movement platform.
According to the vendor, it processed almost $50 billion in online
fund transfers for “most of the largest banks” in the US in

Payment notices are sent to an email address
or mobile phone, with customers of participating banks able to
claim their money through their online banking service with other
customers able to claim at

First Hawaiian Bank, part of BNP Paribas’s
BancWest subsidiary, is currently the only other US lender offering
the POPmoney service, though CashEdge said five more financial
institutions have signed up to launch the service early this


Banesto reports 28% drop in
yearly profits

Spain’s fourth-largest bank by
market capitalisation, Santander-controlled Banesto, has kicked off
the European reporting season with a 28 percent drop in full-year
profits to €559.8 million ($804.8 million), following a 27 percent
rise in loan-loss provisions to €382 million.

Fourth-quarter profits slumped by more than 95
percent to €6 million as the bank continued to set aside more funds
to cover future loan losses.

Bad loans rose to 2.94 percent in fiscal 2009
of its total loan portfolio of €75.93 billion at the year-end,
compared with a past-due loan ratio of 1.62 percent a year ago.

Excluding provisions, Banesto said 2009 net
profits were flat at €824 million. The bank’s core Tier 1 capital
ratio rose to 7.7 percent of risk-weighted assets from 7.2 per cent
at the end of 2008.

A further highlight was a successful
cost-cutting drive which helped reduce its cost-income ratio by 160
basis points to 38.9 percent at the end of the fourth quarter.

“It has been a complicated year,” said Banesto
chair-woman Ana Botin, but, she added, “there are good
opportunities for growth.”

In a note to clients, investment bank Keefe,
Bruyette & Woods said: “We believe Banesto merits a more
neutral position than domestic peers as it looks well placed in
terms of asset quality and efficiency, allowing it to more easily
cope with the deteriorating market conditions.”


Aiful reschedules debt to aid

Japanese consumer finance lender
Aiful has announced that its creditors have agreed to reschedule
its debt payments, helping it stave off the threat of bankruptcy
and enabling it to implement a comprehensive restructuring

Stung by new regulations limiting both the
interest rate and the amount of money consumer finance companies
can lend to consumers, Aiful will now pay back a cumulative ¥280
billion ($3.1 billion) in debt from September 2010 onwards.

As part of its restructuring, Aiful will
drastically scale back its branch network, targeting 28 staffed
branches and 647 unstaffed branches by the end of January, compared
with 96 staffed branches and 819 unstaffed branches it maintained
in September last year.

All 11 of the firm’s subsidiary ‘Life’
branches will close, and its 15 Life Card branches will be reduced
to two, though Aiful said it would make broader use of the Life


HSBC commences annual product

The UK’s HSBC has launched its
annual product and service promotion for customers in the country,
the sixth successive year in which the bank has sought to
kick-start its annual performance by cutting interest rates and

Running from 4 January to 14 February, the
sale offers a 2.29 percent discount mortgage for customers who have
a deposit equivalent to 40 percent of the value of their property,
while some fees on tracker mortgages have been cut by 50

The bank is also offering reductions on
current accounts, savings, insurance and investment funds.

Customers who switch to a HSBC current account
before 14 February will receive £50 ($81) cashback, while customers
who move from another bank to HSBC Premier will receive £100

Savers, meanwhile, are being offered annual
interest rates of up to 4.25 percent via high interest bonds.


Citi launches Thai m-banking

Citigroup has made the next step in
its ambitious worldwide campaign to roll out mobile banking
services across its consumer banking markets with the
implementation of an m-banking solution in Thailand.

In what the bank described as a first from an
international bank in the country, customers are able to view
account balances, transfer money and make payments, with the
service available on any network carrier and accessible in both
English and Thai.

Citi, which now offers mobile banking to
customers across a number of regions including the US, Hong Kong,
Singapore and the Philippines, is offering the first 5,000 Citi
Mobile customers in Thailand either 250 points on its Citi Rewards
loyalty programme or a cash equivalent.

“We are confident Citibank customers
will quickly adopt the use of Citi Mobile services as the number of
our internet banking customers has more than doubled in two years,”
said Yuenyong Ken Songsiridej, country marketing director at

“The extension of the service from
internet banking to mobile banking will be well received.”


UniCredit announces rights
issue terms, proposes reorganisation

UniCredit, Italy’s largest bank by
assets, kicked off the new year with two major announcements: it
has set out details of an internal restructuring of its current
divisional model designed “in light of the new economic and
financial environment” and released details of its €4 billion ($5.8
billion) capital raising.

The ‘Together For Our Clients’ initiative will
involve the ‘possible definition’ of four business segments –
families (dedicated to retail customers); small and medium-sized
enterprises; corporate banking; and private banking – within
UniCredit’s three principal markets (Italy, Germany and

The bank will issue a more detailed
restructuring proposal later in the year with a view to commencing
implementation in November 2010.

UniCredit’s rights issue, meanwhile, will see
it issue three ordinary shares for every 20 ordinary or saving
shares held and will close by 29 January. The bank said the issue
will boost its core Tier 1 capital ratio to 8.39 percent.