Rabobank benefits from risk-conscious consumers; profits
up 3%…

ANZ rebrands, expands in
Indonesia and China…

Dutch auction sites go
live…

Huge US losses in fourth
quarter, reports FDIC…

Barclaycard to develop major UK
loyalty scheme….

RESULTS
Rabobank benefits from risk-conscious consumers; profits up
3%

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By GlobalData

Dutch co-operative Rabobank has
reported a robust set of results for financial 2008. Net profit of
€2.75 billion ($3.73 billion) was up 2.8 percent year-on-year.

In the bank’s core market, domestic Dutch
retail banking, net profit rose by 13 percent to €1.6 billion.

The group added €25 billion in domestic retail
savings, boosting its market share by two percentage points to 43
percent. Mortgage market share also rose by two percentage points,
to 30 percent.

While its wholesale and international retail
banking unit suffered markedly, with net profit falling by 92
percent to €27 million, it was dragged down by wholesale banking:
income from international retail banking rose by 34 percent to €864
million. Savings sourced by direct banking rose by 30 percent to
€6.6 billion.

The ongoing effects of the financial crisis
meant Rabobank took €1.2 billion in write-downs over the course of
the year. But the detrimental effects of this were offset by
one-off gains from the sale of online brokerage Alex and the
consolidation of Polish holding Bank BGZ.

Rabobank cut its net profit growth target for
2009 from 12 percent to 10 percent.

STRATEGY
GE maintains 2009 target

GE Capital is maintaining its net
income target of $5 billion for 2009 even if US GDP falls by 1.8
percent and has said it will break even in a worse case scenario:
the US economy shrinking by 3.3 percent and unemployment rising
above 10 percent.

The multinational’s finance unit, including
its credit card operation, real estate, plane leasing and corporate
lending, last year posted profit of around $8.6 billion out of GE’s
total group profit of $18.1 billion from continuing operations.

During a six hour session with analysts on 19
March, GE’s chief financial officer, Keith Sherin, said the firm
had no need of additional external funding, having cut its dividend
during February by 68 percent to conserve capital. To date, it has
raised $40 billion of the $45 billion it had planned to seek from
debt markets in 2009.

DISTRIBUTION
CBA gets up to speed with new mobile service

Commonwealth Bank of Australia
(CBA), Australia’s largest bank by deposits, has announced a new
m-banking service, bringing the bank in line with rivals such as
ANZ and NAB, both of whom launched m-banking projects in early
2008.

CBA’s service, available on any internet-ready
mobile phone, allows customers to check balances and transactions,
transfer funds, pay bills and locate ATMs and branches via their
handsets, helping them avoid the ATM charges levied by other bank
terminals.

“Commonwealth
Bank is working to make the most of new technology and the
opportunities it offers for accessing banking services. Most people
are never far from their mobile phone and this enhanced, free
service means customers can do their banking anytime, anywhere,”
said Michael Cant, CBA executive general manager of retail
products.

RESULTS
Deposits up 7% but profits
down 43% at France’s Banque Postale

La Banque Postale, France’s vast
postal bank, has reported a 43.9 percent fall in net profit for
2008, largely due to a €94.5 million charge from increased risks in
relation to Lehman Brothers, the fallen US investment bank, and a
lower contribution from insurer CNP Assurances.

The postal bank’s retail banking fundamentals
remain impressive, with total customer and savings deposits rising
by 7 percent to €270.6 billion. La Banque Postale now has 11.2
million accounts and has issued 6 million payment cards. Product
income for 2008, meanwhile, rose by 4.6 percent to €815
million.

La Banque Postale, which has access to 17,000
branches, also said that its online banking site, relaunched in
November 2008, saw unique visitors rise by 40 percent in 2008 and
is now the third largest in France. Around 2.5 million customers
now check their accounts online, the bank added.

MARKETING
ANZ rebrands, expands in
Indonesia and China

ANZ, Australia’s third-largest bank
by assets, launched its new global brand in Indonesia as part of an
effort to emphasise its commitment to Asia. The brand, launched
alongside the opening of two new branches in the Indonesian capital
city, Jakarta, has redesigned its logo to incorporate a “modernised
and simplified wordmark” as well as a lotus symbol, interpreted as
an image of unity and growth in many Asian countries.

The bank’s two new Indonesian branches bring
its total in the country to seven.

“We continue to be confident about the
prospects of Indonesia and its growth potential, which is reflected
in our plan to invest in a further 13 branches for our customers in
Indonesia this year,” said Alex Thursby, chief executive of ANZ
Asia-Pacific.

In December Thursby revealed to RBI
that ANZ was looking to locally incorporate in China (see RBI
600
). The bank now plans to open over 20 outlets in China by
2012, subject to regulatory approval.

COUNTRY SNAPSHOT
UK coalition
campaigns for nationwide Post Bank

A coalition of pension pressure
groups, charities, trade unions and other organisations in the UK
have launched a proposal for a nationwide Post Bank, a move which
would bring UK financial services in line with continental
counterparts such as France and Germany.

The Post Bank model proposed by the coalition,
which includes the Federation of Small Businesses and trade union
Unite, envisages a government-funded alternative to the UK’s
leading lenders, focused on ensuring “a stable source of finance in
the heart of communities, particularly for the three million people
still not using banks”.

The coalition says that the existing UK Post
Office’s network of 11,500 branches – more than twice the number of
major UK bank branches combined – would provide an ideal platform
from which to launch an expanded range of financial products and
services.

The call for a more formal postal bank in the
UK comes after widespread negative sentiment on the leading UK
commercial banks and their involvement in the global financial
crisis.

RESULTS
Philippines’ Metrobank to improve risk management in
2009

Metrobank, the second largest bank
in the Philippines by assets, has reported full-year net income of
PHP4.4 billion ($146 million) for 2008, a fall of 38 percent from
the net profit of PHP7.04 billion it reported for 2007.

In consumer banking, net income rose by 48
percent on the year from PHP1.44 billion to PHP2.13 billion, driven
by a 12.6 percent increase in net interest income from PHP5.7
billion to PHP6.42 billion. Total bank deposits rose by 10.5
percent to PHP585.3 billion, with total non-performing loans
falling from 5.3 percent to 4.5 percent on the year.

“Our core
business performed well despite the difficult conditions. We marked
down all risky assets in our portfolio in 2008 and were still able
to reflect a reasonable income,” said Metrobank’s president, Arthur
Ty.

RESULTS
NBG outshines peers, posts solid results

National Bank of Greece (NBG), the
country’s largest bank, has posted a resilient set of results for
fiscal 2008, with attributable profit for the year down by only 5
percent to €1.54 billion ($2.07 billion) from €1.62 billion in
2008, in line with market expectations.

In particular, analysts were reassured
by NBG’s strong liquidity (a loan-to-deposit ratio of 95 percent),
relatively defensive loan book and strong capital ratios (Tier 1 at
9.9 percent). The bank’s cost-income ratio fell by 340 basis points
during the year to 46.6 percent while the bank’s NPL ratio also
improved, by 14 basis points to 3.3 percent, despite the
deterioration in the economic outlook of the region where NBG
operates.

Net profit from domestic operations
fell by 10 percent year-on-year to €920 million, with the bank’s
Turkish arm, Finansbank, posting net profit up 15 percent to €470
million; NBG’s South East Europe division raised net profit by 28
percent to €202 million.

NBG’s retail banking unit continued to
post strong growth, with retail lending in 2008 totaling €29.6
billion, up 15 percent year-on-year. But looking ahead to fiscal
2009, lower interest rates will mean deposit-rich NBG will suffer
from pressure on core-deposit spreads.

NBG’s fall in profitability was the
smallest among major Greek banks: Alpha Bank posted net profit of
€512.1 million, down 33.5 percent from €769.6 million in 2007;
while Piraeus Bank’s net profit fell by 37 percent to €315
million.

DISTRIBUTION
Dutch auction sites go
live

The recent growth in the popularity of
websites running live auctions where banks compete to provide the
best rates of interest has extended to the Netherlands, with the
launch of two sites, Spaarbod and Bank2You.

The Dutch auction sites mirror the US
roll out of MoneyAisle last June (see RBI 606) and the
March launch of UK-based MaxBips.com (see RBI 607), as
savers seek a way round historically low rates of interest.

But in contrast to MaxBips, Spaarbod is
free of charge to customers, with banks paying a commission for
every bid that results in a savings deposit. In the first four days
after its launch on 28 February, Spaarbod, which works with nine
banks including ING and Rabobank, said it carried out 900 auctions
for €37 million in savings. Bank2You, which went live on 15 March,
is also free to savers and has already teamed up with ten
banks.

DISTRIBUTION
Almost half of US web
users banking online

Research conducted for the direct
banking unit of HSBC has concluded that 49 percent of the US online
population conducts most, if not all, of its banking via the
internet, up nearly 23 percent from early 2007. And according to
HSBC, it is not just younger generations which have embraced online
banking; while 62 percent of people aged 21 to 34 conduct the
majority of their banking online, approximately 40 percent of
Americans aged 45 to 69 are now doing most or all of their banking
online too. 

The findings from HSBC are consistent
with recent projections about the future for online banking which
suggest that 92 million or 76 percent of US households are expected
to be banking online by 2011. 

RESULTS
Dire fiscal 2008 for AIB; outlook
remains difficult

Net profit at Ireland’s largest bank,
Allied Irish Banks (AIB), has plunged by more than 60 percent from
€1.95 billion in 2007 to €767 million in fiscal 2008 due to
mushrooming impairment charges. And with the country’s property
price crash showing no signs of abating, analysts expect the bank
to be loss-making in 2009-2010. AIB shares have fallen more than 95
percent in the past year.

While deposits grew by 22 percent
compared with an 8 percent increase in loans, the bank’s
loan-to-deposit ratio only fell slightly, from 157 percent in 2007
to 140 percent; total provisions amounted to €1.85 billion compared
with only €99 million a year ago.

Analysts remain concerned about future
asset quality deterioration at AIB, and regard the Irish
government’s injection of €3.5 billion by way of a preference share
recapitalisation as having done nothing to remove that risk.

Rival Irish Life & Permanent, one
of Ireland’s largest retail mortgage providers, reported a
larger-than-expected 42 percent drop in full-year operating profit
while Permanent tsb posted an 86 percent fall in operating profits
due to bad debt charges and losses on securities held at Lehman
Brothers and three Icelandic banks.

Bank of Ireland, which has also
received a €3.5 billion recapitalisation from the state, will
report its 2008 full-year results in mid-April at the
earliest.

REGULATION
UK’s FSA seeks major
overhaul in regulation

The UK’s regulator, the Financial
Services Authority (FSA), has announced plans for a sweeping
overhaul of the UK’s financial regulatory regime, in effect ending
the era of principles-based regulation. Instead, the FSA said it
would shift from a “light-touch” regulatory regime and clamp down
firmly on wrongdoing.

In a report, the chairman of the FSA,
Adair Turner, called for co-ordinated action from regulators around
the world, including a new European regulatory body and increased
national powers to constrain risky cross-border activity.

Such a body would incorporate both
prudential and conduct of business regulation although it would
have no powers over national supervisors to amend individual
regulatory decisions or to prescribe supervisory practice.

The report chronicled the rapid growth
of the financial sector in recent years and the role of leverage in
increasing risk and dwelt on the rapid growth of the shadow banking
sector resulting in a dangerous reliance on off balance-sheet
vehicles.

In calling for a fundamental change to
bank capital and liquidity regulations and more and higher quality
bank capital, Turner emphasised the need for a central role for
much tighter regulation of liquidity.

In addition, his report flagged up
areas where he said it was premature to recommend specific action,
but where wide-ranging options need to be debated, including the
possible regulation of retail banking products.

In the US, the American Bankers
Association has set out its proposals for reform of regulatory
oversight of financial institutions and said that US legislation
ought to focus on three main priorities: creation of a systemic
risk regulator; the need for a pre-existing method for bringing
orderly resolution to troubled systemically important non-bank
financial firms; and the need to address gaps in the regulatory
system.

RESULTS
Nedbank customer numbers up,
retail profits plunge 47%

Nedbank, South Africa’s fourth-largest
bank and majority owned by UK-based insurer Old Mutual, has
reported headline earnings for fiscal 2008 dropped by 2.6 percent
to ZAR5.76 billion ($605 million). The bank’s retail division
posted headline earnings down by 47 percent to ZAR1.87 billion, due
to increased impairments of home loans and vehicle finance, with
the bank’s retail credit loss ratio increasing from 1.26 percent to
2.47 percent during the year.

Retail client numbers grew by 10
percent during the year, boosted in part by the bank’s Fresh Start
initiative, rolled out in 2008 and renewed in the first quarter of
2009, offering ZAR750 to customers who switch their primary bank
account to Nedbank.

RESULTS
Huge US losses in fourth
quarter, reports FDIC

Underlining just how dire the fourth
quarter of last year was, the Federal Deposit Insurance Corporation
has said that commercial banks and savings institutions in the US
insured by the FDIC reported a combined net loss of $26.2 billion
in the fourth quarter of 2008, a decline of $27.8 billion from the
$575 million that the industry earned in Q4 of 2007 and the first
quarterly loss since 1990.

Rising loan-loss provisions, losses
from trading activities and goodwill write-downs all contributed to
the quarterly net loss as banks continue to repair their balance
sheets in order to return to profitability in future periods.

But the FDIC added that more than
two-thirds of all insured institutions were profitable in the
fourth quarter, but their earnings were outweighed by large losses
at a number of big banks. Total deposits increased by $307.9
billion (3.5 percent), the largest percentage increase in 10 years,
with deposits in domestic offices registering a $274.1 billion (3.8
percent) increase. And at year-end, nearly 98 percent of all
insured institutions, representing almost 99 percent of industry
assets, met or exceeded the highest regulatory capital
standards.

For all of 2008, insured institutions
earned $16.1 billion, a decline of 83.9 percent from 2007 and the
lowest annual total since 1990. Twelve FDIC-insured institutions
failed during the fourth quarter; during the year, a total of 25
insured institutions failed. The FDIC’s ‘Problem List’ grew during
the quarter from 171 to 252 institutions, the largest number since
the middle of 1995.

PAYMENTS
Ebay looks to double PayPal
revenue by 2012

The world’s largest auction house,
eBay, has outlined ambitious plans to double revenue by 2012 at its
fast-developing payments subsidiary PayPal.

John Donahoe, president and CEO of
eBay, stated PayPal has grown to become the group’s second core
business (after auctions) and has the potential to become bigger
than eBay Marketplaces because it targets all of e-commerce.

The company says PayPal had more than
70 million active accounts in 190 markets and 19 currencies at
year-end, and expects revenue to double by 2011, to $5 billion from
$2.4 billion in 2008. The business should also be boosted by eBay’s
acquisition last October of US online payment scheme Bill Me
Later.

DISTRIBUTION
Sunday branches push
from Canada’s CIBC

Canada’s CIBC, the country’s
fourth-largest retail bank, is opening more of its branches on
Sundays. From mid-March, an additional 15 outlets across the
country opened their doors on Sundays from noon to 4 pm, part of a
trend in Canada towards seven-day banking.

By the end of 2009, customers will be
able to bank on Sunday at 45 branches across the country, out of a
total of 1,051. CIBC is also mid-way through a five-year strategic
plan to build, relocate and expand over 70 new branches across the
country by 2011.

MARKETING
BBVA adds to football
strategy with new card

BBVA, which sponsors Spain’s main
football league (La Liga), has launched the BBVA Soccer Card with
MasterCard, a product aimed at all Spanish football fans.

Cardholders can use it either as a
credit or debit card (several forms of payment are available
including deferred, end-of-the-month and personalised) and are also
able to receive mobile-phone updates on their favourite teams as
well as developments in the Liga BBVA through real-time text
alerts.

The bank, which is spending €60 million
over three seasons (2008-2010) to raise the profile of the Liga
BBVA and the smaller Liga Adelante, is promoting the product with a
major advertising push and competitions including a weekly draw
that tests soccer knowledge.

Prizes include weekend trips to matches
and a Day of Your Life competition: an opportunity to take a shot
at goal during half-time at a La Liga match and win up to
€60,000.

The bank says that its connection with
football in Spain has “reaped significant benefits” in terms of
brand recognition. BBVA says it has become the second most
prominent brand at sports events after Coca-Cola in Spain, and
directly attributes 120,000 new current accounts, equivalent to a
32 basis points increase in market share, to the initiative.

MERGERS AND ACQUISITIONS
BNP Paribas
and Fortis rejig merger deal again

Stricken Belgian bancassurer Fortis,
BNP Paribas and the Belgian State have renegotiated – for a second
time – the contract for the French group to acquire Fortis’ banking
businesses in Belgium and the Netherlands in the hope of winning
round skeptical Fortis shareholders who have so far blocked the
deal.

Under the terms of the new agreement
and subject to the approval of Fortis Holding’s shareholders, the
Belgian State will transfer to BNP Paribas 75 percent of Fortis
Bank (valued at €8.25 billion [$11.2 billion]) and Fortis Bank will
acquire 25 percent of Fortis Insurance Belgium from Fortis Holding.
In return, Belgian taxpayers will take a 11.6 percent stake in BNP
Paribas, becoming its largest shareholder.

For BNP Paribas, the main changes
compared to the October Protocol are a strategic partnership with
Fortis Insurance Belgium, with an exclusive distribution contract
to 2020; the segregation of risky structured loan assets; and a
partial guarantee from the Belgian State.

The deal will, if passed, create the
largest European banking group by deposits (€540 billion) with four
domestic markets in retail banking: France, Belgium, the
Netherlands and Luxembourg (see cover story RBI
606
).

PAYMENTS
Barclaycard to develop major
UK loyalty scheme

Barclaycard, the largest UK credit card
book, has said it is preparing to launch a “major retailer rewards
programme scheme” to link its 11.7 million credit card holders with
89,000 retailers. The launch will be sometime in the latter half of
2009, but no further details were given.

The scheme will offer Barclaycard
holders immediate rewards – which can be claimed at the time they
make their purchases, or saved for future use – if they use their
cards in stores that are participating in the scheme.

Antony Jenkins, Barclaycard’s chief
executive, said in a statement: “I envisage shoppers getting
rewarded at a vast range of our retailers. The scheme will be
simple and convenient for customers with no need to collect and
save vouchers and coupons, and with no points to calculate – the
rewards will be in pounds and pence.”

The two largest loyalty programmes in
the UK are the ClubCard from retailer Tesco and the independent
Nectar scheme.

RESULTS
Islamic Bank of Britain sees
10% rise in clients

Islamic Bank of Britain (IBB), the
largest such bank in the country, says customer numbers grew 10
percent to 47,000 last year while deposits rose 15 percent to £158
million. Customer financing was up 48 percent to £23.5 million.

Operating income was £4.9 million, up
from £4.7 million in 2007. Sultan Choudhury, commercial director,
said: “IBB has demonstrated steady growth underpinned by the launch
of key products, such as the Home Purchase Plan, and the 60 Day
Notice Savings Account. It remains well positioned due to its
minimum exposure to higher risk assets, prudent credit policies and
a robust risk management approach.”