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RBS proves there is no success unless you put spin on it
For the past eight years in Britain, we have “laboured” under a government consisting of mostly spin and very little substance. Time and again, vital public sector reform has been fudged – public sector pensions being the latest example – because prime minister Tony Blair is preoccupied with his media image and has little appetite for taking tough decisions that upset domestic interest groups.
Deutsche’s smart buys reaffirm retail ambition
The German bank is ramping up its retail strategy by acquiring small banks – but is avoiding shopping at home.
Basel II risks failure without the US on board
If the US and Europe cannot agree on a common capital adequacy system, the idea of a level playing field will become a vain hope.
Three threats to the rosy picture
Banks have been having a good run but the critical challenge is to find future top line growth, says John Tiner.
A losing battle
The world’s biggest illegal industry is money laundering, which is on the rise despite government efforts to curb the activity.Moises Naim evaluates the consequences in today’s financial world.
MAIN STORY: BBVA seeks bigger footprint in US and Spain
BBVA is moving strongly into two new areas, the US and immigrant services in Spain, which it believes may boost its profits substantially in years to come.
BankMuscat first to list GDRs in London
Marking the first day of trading of its global depository receipts (GDRs), executives from BankMuscat, Oman’s largest bank, attended the opening session at the London Stock Exchange.
Reports
Research on Austrian banks measuring the cost of implementing regulation may apply to institutions elsewhere, while Standard & Poor’s forecasts a lull in European cross-border mergers, writes Stephen Timewell.
Foreign banks’ domination of Bulgaria set to continue
With more than 83% of Bulgaria’s banking assets under the control of foreign banks or financial institutions, who has gained from the country’s banking privatisation in the past decade?
Arnold’s post-Abbey ponderings
Former Abbey CEO Luqman Arnold tells Karina Robinson about his future plans and why it is important to take time out occasionally.
Why RBS needs spin
Despite a meteoric rise to global powerhouse, the RBS board has managed to transform itself from darling to demon in the eyes of its shareholders. Geraldine Lambe charts the bank’s fall from grace.
When is an excellent management team not an excellent management team? When your shareholders don’t believe it. Such is the case with Royal Bank of Scotland (RBS) shareholders, and their jaundiced view was amply displayed when chief executive Sir Fred Goodwin was asked if he was a megalomaniac at August’s half-year results conference. Where once they lauded Sir Fred as emperor in all his finery, now shareholders behave as if he has no clothes.
Michael Klein
Michael Klein, CEO of global banking at Citigroup, tells Brian Caplen that gaining corporate client trust requires the bank’s senior advisers to position themselves as peers of the CEOs and boards with which they deal.
Insurance firms gain a sense of security
Judith Klugman, managing director at Swiss Re capital markets in New York
Insurance-linked securities have raised the interest of a new swathe of investors and are providing a source of capital along with increased financial flexibility for insurers. Michael Marray reports.
There is growing appetite from investors on the international capital markets for insurance-linked securities (ILS).
Quality pays off for Gazprombank
Alexey Obozintsev: ‘detailed, well-focused borrowing strategy’
Investors are falling over themselves to buy bonds issued by Russia’s state-owned Gazprombank. Edward Russell-Walling explains why.
Russian banks are not always synonymous with credit quality. When Gazprombank came to market in September with a 10-year bond, however, the issue was more than six times oversubscribed. There are Russian banks, and Russian banks.
UBS adds gleam to GECC’s golden touch
The UBS team: from left, Todd Mahoney, Henrik Raber and Scott Yeager
When triple A rated GECC decided to issue a 32-year subordinated note, it chose UBS to ensure the success of this groundbreaking deal. Nick Kochan reports.
What lies behind an outdated yardstick
Create an original model for a bank and the market will be using it as a yardstick long after the originator has moved on. The view of Barclays Capital as a purely debt-focused European house is well out of date but few observers have kept up with the new developments.
CSFB’s long haul pays off in Brazil
Investment banks are often criticised in emerging markets for being fair weather friends: moving in when times are good, running for the exit when the market turns down. But if you take over a major domestic player, you are pretty much obliged to stick around.
Boom-bust avoidance
It is not just in emerging markets that banks have to avoid the boom-bust syndrome. Merrill Lynch is back in the driving seat after the 2002 crisis that led to thousands of job cuts. It won The Banker’s Global Investment Bank of the Year award in recognition of its return to glory.
Confidence building
Kate Morrison: ‘lack of proxy hedgings’
Together with a growing band of property sector professionals, bankers are working to kick-start the fledgling property derivatives market. In this second article on the subject, Natasha de Teran explores the market’s current development and its future potential.
Buy-side ignores MiFID at its peril
The EC’s Markets in Financial Instruments Directive will affect buy-side firms from April 2007, obliging them to create a policy for best execution. But as Dan Barnes reports, many of them are still not taking the change seriously.
Banks feel effects of cajas’ success
Opposition is mounting to the privileged position of Spain’s ultra successful savings banks, says Jules Stewart.
Beyond mere profit maximisation
Juan Ramón Quintás: ‘more than just banks’
Juan Ramón Quintás, chairman of the Confederación Española de Cajas de Ahorros, Spain’s savings banks federation, tells Jules Stewart about the benefits of being mutual.
Spreading the word
Fifteen months after the Basel II framework was published, the European Commission has turned it into a new law – the Capital Requirements Directive. Michael Imeson reports on the translation and adoption travails ahead.
Rossisky resurrection
Dmitry Eropkin: sees RKB’s future as an investment bank organising project finance investments
Rossisky Kredit Bank nearly went under in Russia’s 1998 financial crisis. Ben Aris reports from Moscow on how it weathered the storm and its miraculous comeback as an investment bank.
Rossisky Kredit Bank (RKB) is back from the dead. One of the dozen banks that were household names in the 1990s, but collapsed during the 1998 financial crisis, RKB is the only big Russian bank to have paid off all its debts and returned to profit.
RKB’s recovery is a damning condemnation of its peers, which walked away from billions of dollars in debt and left hundreds of thousands of pensioners destitute after they lost their life savings.
Overcautious approach may impede progress
President Alexander Lukashenko’s tight controls have ensured that Belarusians have not suffered in the slow transition to a market economy. But the same restrictions are curbing growth and foreign investment, as Ben Aris reports from Minsk.
Stepping stone into China
T C Chan: ‘We [Citigroup] will expand’
Karina Robinson reports from Hong Kong on the incorporated banks’ mainland China strategies.
In July, Citigroup’s Hong Kong business incorporated itself as a Hong Kong bank so that it could do business in China.
Bank of East Asia
David Li: expects some consolidation ‘in the next 18 months’
Goldman Sachs is in no doubt about one of the reasons to buy Bank of East Asia (BEA) shares. In a report, its analysts wrote that the largest independent local bank in Hong Kong has a number of unique revenue drivers that many other Hong Kong banks would “kill” to have, including a leading position among foreign banks in China –18.3% of its loans are on the mainland.
Confidence in Mexico is hard to shake
As the main political parties choose their candidates for next year’s presidential election, Monica Campbell reports on the contenders, and prospects for the economy and investment if they succeed.
Investment grade in reach?
Argentina’s economic revival is building confidence in its ability to clinch investment grade in a few years’ time. Jason Mitchell reports from Buenos Aires.
Bovespa index will chart corporate behaviour
As interest in socially responsible investment increases in Brazil, the stock exchange plans an ethical index that will track responsible companies. By Oliver Balch.
In defence of unorthodox economic strategies
Barbados premier Owen Arthur tells James Eedes what lies behind his economic policies, which he continues to follow against the advice of the IMF.
Big plans for a small state
Prime minister Denzil Douglas: ‘We will sit down with our partners and seek to advance our cause’
St Kitts and Nevis is taking steps to sustain stable growth, benefit from regional integration and develop the financial sector. Prime minister Denzil Douglas talks to James Eedes.
St Kitts and Nevis is small. The eastern Caribbean twin island-state is home to a population of about 40,000 and has an economy valued at just over $420m.
Like other countries in the Caribbean, it has been buffeted by a series of external shocks – hurricanes and the 9/11 terror attacks, for instance – as well as changing global economic dynamics, such as trade liberalisation that has resulted in the loss of key trade preferences.
Arab banks set to smash profits record again
Runaway profits at Arab financial institutions show no signs of slowing down, as this year’s Top 100 proves.
Saudi’s new bond market beckons
The pace of Saudi capital market reform is quickening, with the establishment of a secondary market in government bonds, write James Gavin and Jon Marks.
Mood of confidence permeates the market
Adel El-Labban: AUB is committed to a major role in the Kuwaiti home market
Foreign banks are arriving in Kuwait at last, just as the Bank of Kuwait and Middle East takeover signals the domestic market’s renewed attraction, writes Paul Melly.
On October 2, HSBC Middle East became the second foreign bank to open its doors in Kuwait under the pilot liberalisation programme developed by the authorities in the past year.
Political events mark transitory year
Highly capitalised and with abundant liquidity, Lebanon’s top-tier banks remain optimistic about their prospects despite difficult political circumstances, writes James Gavin with Jon Mark.
Focus on governance and consolidation
As Jordanian banks report an upturn, more attention is being paid to consolidation, governance and product range in efforts to strengthen the sector, writes Selwa Calderbank, with Jon Marks.
Oil revenues aid recovery
Algeria is working hard to recover from years of civil war. Its twin aims of social reconciliation and fiscal reform include restructure of the financial services sector. James Eedes reports on progress.
Tough regime starts to pay off
Nigeria’s central bank governor Charles Soludo is pushing through reforms designed to strengthen the banking sector and is seeing results. James Eedes reports.
Ease the path to compliance
Banks can make their Basel II compliance journey easier if they know which stage they are at, what problems they are likely to face and what solutions they can rely on. Arun Pingaley and Kiran Narsu outline a compliance continuum.
Get the rules right
John D Hawke: ‘the prospect of wide swings in the impact on MRC must be a matter of concern’
As US concerns over minimum regulatory capital requirements come late in the day, the Basel Committee must seriously consider delaying implementation, says John D Hawke Jr.
On September 30 the US bank regulatory agencies announced a revised schedule for the implementation of Basel II, the new capital standards for internationally active banks.
A starring role for market discipline
Market discipline should be used to lower the risk of arbitrary supervisory discretion in the implementation of pillar 2 of the Basel II Accord. Professor Harald Benink addresses the latest global developments on Basel from a European perspective.
A chance to win business benefits
Ravi Varadachari explains how banks that plan to comply with Basel II’s advanced approaches can use them for strategic decision making, such as capital allocation for individual lines of business.
A broader remit for microfinance
The Middle East is enjoying an investment boom but risks leaving the poor further behind. Microfinance can help to improve their prospects but it will take more than loans alone. Rula Dababneh explains.
Biometrics make inroads
Although not yet in general use, biometrics are slowly being tested and adopted in the banking sphere as a way of increasing security, Wendy Atkins reports.
The ATM story is far from over
Some banks are outsourcing their ATM function to increase margins but others are still looking for ways to offer new transactions at their machines. Dan Barnes reports on the latest developments.
René Querret
Société Générale’s chief information officer René Querret tells Dan Barnes why the French bank is increasingly using third-party IT providers and of the complications that can occur.
Trading timebomb is ticking
New technology is needed to keep pace with the speed and volume of credit derivatives trades. The first step must be for all the players in the market to buy into the need for change, says Dan Barnes.
Stop complaining, get training
Customer complaints cost banks dearly in loss of loyalty and client profits. In some cases the banks only have themselves to blame for encouraging thoughtless responses to customers’ concerns.By Chris Skinner.
BPM software spend continues
Business process management (BPM) tools continue to show significant traction in the banking industry.
More accounting rules
Proposed by the Committee of European Banking Supervisors, translated from officialese by Michael Imeson.
Whole loan sales head through roof
Steve Haggerty, MD at Homeloan Management
Trade in whole mortgage loans is brisk in the UK, while Germany and the Netherlands show potential, but the booming European market’s main player is American. Michael Marray reports.
Innovative techniques for funding
Edward Reardon: retained risk regulatory change
European lending institutions are increasingly using securitisation and the covered bond market in tandem as a means of reaping the advantages of the different tools. Natasha de Teran explains.
Hunt for diverse funding base
As a result of home ownership demands from a burgeoning middle class, banks in central and eastern Europe are seeking new sources of mortgage financing – and US and European asset-backed investors are only too keen to diversify their portfolios. Michael Marray reports.
Without frontiers
The European Commission wants to boost efficiency in the mortgage market by creating a single European market for the sector. But care needs to be taken in establishing such a market, which must be free and open, suggests Simon Walley.
