Embattled Citi rolls out new corporate structure
and team…
ICICI launches the Global
Indian Account…
Crédit Agricole, Banco
Popolare in credit talks…
Suncorp jumps
aboard m-banking bandwagon…
PNC Financial
in new green marketing blitz…
STRATEGY
Embattled Citi rolls out new corporate structure and
team
Reeling from $30 billion in subprime write-downs so far as well as
a $5.1 billion first quarter loss, Citi is to undergo a sweeping
reorganisation spearheaded by Vikram Pandit, the group’s new CEO.
The overall aim is to “achieve greater client focus and
connectivity, global product excellence, and clear accountability”,
according to a statement released by the group. “The new structure
will also allow Citi to focus its resources towards growth in
emerging and developed markets and improve efficiencies throughout
the company.”
Go deeper with GlobalData
Citi has, for instance, reorganised its consumer group into two
global businesses – Consumer Banking and Global Cards. The company
has poached Teresa Dial from Lloyds TSB in the UK as global head of
consumer strategy and CEO of consumer banking in North America. It
has also consolidated its US and international credit card
businesses into a single global business, to be led by Steven
Freiberg, the division’s new CEO.
In a separate interview in the Financial Times, John Reed,
who masterminded the $166 billion megamerger with the insurance
group Travelers in 1998 to form Citigroup, has said the deal was a
mistake that failed to benefit the financial services
conglomerate’s investors, customers and employees.
PRODUCTS
Smaller than expected demand for US prepaids
Prepaid card spending in the US is lower than many experts had
predicted, according to research from the country’s central bank,
the Federal Reserve.
In its Electronic Payments Study, the Fed said the total number of
prepaid transactions in the country for 2006 was around 3.4
billion, with a value of $49.9 billion. The study quotes various
analyst estimates of the industry, including some from
consultancies Mercator, Aite Group, Comdata, TowerGroup, Accenture
and First Annapolis, which said total spending was higher.
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By GlobalDataThe report stated: “Separating the hyperbole from documented
results has proven to be a far greater challenge than anticipated.
The reluctance by industry participants to share data suggests that
there are some concerns about releasing information publicly.”
PRODUCTS
ICICI launches the Global Indian Account
Leading private sector Indian banking group ICICI has rolled out
the Global Indian Account, targeting what the bank describes as
“the comprehensive banking needs of Indians moving overseas”. These
customers, prior to their departure from India, receive a bank kit
comprised of a host country bank account, debit card and an
internet banking account.
The Global Indian Account is available to people moving to the UK,
US and Canada for work, study or immigration. Customers also get a
non-resident rupee account in India, which will facilitate instant
money transfers between their host country account and their India
account.
Sonjoy Chatterjee, executive director, responsible for corporate
& international Banking, said in a statement: “We are
leveraging on our international presence to offer a seamless
banking service to Indians moving overseas.”
RESULTS
China Construction Bank records 50% rise in annual net
income
China Construction Bank (CCB), the country’s third-largest bank by
assets, has reported robust 2007 earnings, with operating income up
45.6 percent to CNY220.7 billion ($31.6 billion) and net income up
49.6 percent to CNY69.142 billion. CCB’s cost-income ratio declined
by 2.14 percentage points, to 41.83 percent, while total assets
increased by 21.10 percent to CNY6.6 trillion.
CCB said it had retained its leading position in the domestic
banking market in terms of overall profitability – its net interest
spread was 3.07 percent while net interest margin reached 3.18
percent, the best among domestic banks (see RBI
589).
In terms of retail banking, CCB said it had “deepened its
‘customer-focused’ philosophy”. In 2007, the deployment of a retail
branch transformation project in cooperation with Bank of America
(which has a 9 percent stake in CCB) standardised service and sales
models at branches. As of 31 December 2007, 5,266 retail branches
had been revamped, accounting for 39.16 percent of all
outlets.
The transformed branches reported an increase in daily average
product sales of 215 percent, operational efficiency rose by up to
40 percent, and customer waiting time was shortened by 29 percent,
said CCB.
The number of online clients grew by 63 percent to 70.7 million,
while online transaction volume shot up by 134 percent to 1.89
billion transactions. The total circulation of the bank’s debit
cards grew by 37.4 million to 224 million, with spending up 91.7
percent to CNY407.4 billion. Use of the CCB Long Credit Card grew
98.8 percent.
STRATEGY
BNP Paribas puts retail banking at the heart of global
expansion plans
BNP Paribas has rebranded its International Retail Banking and
Financial Services core business to BNP Paribas International
Retail Services (IRS) and has reinforced the integration of its
international businesses as it looks to turn itself into a globally
focused banking group.
In less than five years, the division has doubled in size, both in
terms of the number of employees (from 29,000 to 71,000) and
customers (28 million to more than 50 million), while its revenues
have risen from €4.9 billion to €8 billion and its presence
expanded to 60 countries.
Pierre Mariani, head of the IRS core business, said in a statement:
“We aim to achieve a new objective: more than 70 million customers
by 2010, including nearly 6 million new customers in our retail
banking networks.”
BNP Paribas’s International Retail Services core business is now
organised around three business lines focused on delivering retail
services: branch banking in the US and emerging markets (the goal
is to open 600 new branches by 2010 to bring the IRS network to a
total of 3,400 branches, including 2,600 in emerging markets);
personal finance (consolidation of consumer lending and mortgage
lending units such as Cetelem, UCB); and equipment solutions
(Arval, BNP Paribas Lease Group).
The goal of the IRS unit is to earn one third of its revenues in
emerging markets by 2010.
STRATEGY
HSBC tops Forbes 2000 list of largest
companies
HSBC has jumped two places to top the latest Forbes 2000 list of
the world’s largest companies, the first time a non-US company has
led the rankings since its launch in 2004. The annual index surveys
blue-chip firms in 26 industries across 60 countries and ranks them
according to a composite of sales, profits, assets and market
value. HSBC delivered 26 percent annual average growth in revenue
and 31 percent in net income over the past five years.
Measured by number of companies, 315, the banking industry has the
biggest presence on the list. Banking also dominates in assets,
with total assets of $58.3 trillion, and profits, $398 billion. The
US still dominates in terms of geography but its influence is on
the decline.
In contrast, China, India and Brazil are rapidly adding companies
to the list.
STRATEGY
Crédit Agricole, Banco Popolare in credit talks
Crédit Agricole, France’s largest retail bank, and
Italian co-operative Banco Popolare are discussing a possible joint
venture between their Italian consumer credit subsidiaries, Agos
and Ducato, which could form Italy’s biggest consumer credit
company.
The new company would have a market share of approximately 14
percent, €13 billion ($20.7 billion) in outstanding loans in 2007
and access to a network of 256 wholly owned branches in addition to
the banking networks of Banco Popolare (2,100 branches), Cariparma
and Friuladria (700 branches), and 25,000 affiliated retail
outlets.
A joint statement said talks will continue until the end of April
and examine in detail the industrial and financial aspects of the
proposed all-share deal and the timeframe for implementation,
subject to any regulatory and competition constraints.
According to initial estimates, synergies would amount to a minimum
of €50 million pre-tax per year. Crédit Agricole’s Agos brand
focuses on consumer loans and revolving credit cards while Banco
Popolare’s Ducato arm is a major player in personal/consumer
loans.
STRATEGY
Interest grows in the booming Indian market
In anticipation of the planned liberalisation of the Indian banking
market in 2009, Allianz’s retail banking subsidiary Dresdner has
announced plans to open its first Indian branch, having obtained a
banking licence from the Reserve Bank of India.
According to Allianz, the Dresdner branch in Mumbai will offer a
range of financial services, from bank accounts to mortgages,
deposits and consumer loans.
The number of middle-class households – Dresdner’s core target
group in India – has doubled to more than 150 million since 1995,
said the bank in a statement.
Allianz’s current Indian interests (it has approximately 300,000
representatives in the country) comprise of insurance companies
Bajaj Allianz Life and Bajaj Allianz General Insurance, which are
among Allianz fastest-growing companies.
Meanwhile, Australia’s most enthusiastic international player, ANZ,
winner of RBI’s Award for Best Cross-Border Expansion
Strategy (see RBI 589), is eyeing a possible return to
India after an eight-year absence and has applied to the Indian
central bank for six banking licences.
ANZ sold its Grindlays-branded Indian division to Standard
Chartered in 2000, having failed to reach profit targets in the
country.
Domestic players are also upping their game. Both ICICI and Union
Bank of India have announced huge branch expansion plans – ICICI
says it will increase its network by around 40 percent to 1,400
branches across 2008 while UBI has said it will add around 600 more
outlets to its existing 2,516 branches during 2008 and 2009.
DISTRIBUTION
Intesa Sanpaolo overhauls its website
Intesa Sanpaolo (Intesa), Italy’s largest retail bank and
second-largest bank overall following its formation on 1 January
last year, has overhauled its website to make it more modern and
easy to use. On 7 April, the new http://www.intesasanpaolo.com/
site went live, replacing the previous http://www.sanpaolo.com/ and
http://www.bancintesa.it/
sites.
The bank has already enjoyed success in converting its customers to
the online channel, with almost three million online retail clients
and more than 50 percent of its transactions conducted through
direct channels.
According to the bank, it records more than 110 million page
visits, 23.5 million statements and 1.5 million instructions
monthly, with 550,000 new contracts for online banking signed
during 2007 and around 100,000 in the first two months of
2008.
The new site offers a search engine based on Google search
technology, enabling customers to find the information within a few
seconds. Future web development will, said the bank, allow
customers to interact, speak or videoconference with bank staff in
real time using voice over internet protocol technology.
STRATEGY
South Africa’s Standard Bank has big hopes for Nigeria
after IBTC deal
Stanbic IBTC has launched in Nigeria following the successful
conclusion of the merger of Standard Bank’s Nigerian arm, Stanbic
Bank, and IBTC Chartered Bank.
South Africa’s Standard Bank secured a majority shareholding IBTC
Chartered in August 2007. The newly merged bank, which has a
capital base in excess of NGN60 billion ($510 million), has said it
will forge ahead with a product and service roll-out, and implement
a branch expansion programme as part of Standard Bank’s plan to
open an additional 160 branches across Africa by the end of
2008.
“We are very excited to finally launch as a single brand to the
market, and tangibly demonstrate the benefits of being a strong
Nigerian bank with international muscle and expertise, from which
our customers and shareholders will benefit significantly,” said
Stanbic IBTC CEO Chris Newson.
DISTRIBUTION
Suncorp jumps aboard m-banking
bandwagon
Hot on the heels of recent m-banking launches by ANZ and National
Australia Bank (see RBI 586), Suncorp, Australia’s
sixth-largest banking group, has introduced a free mobile banking
service which the bank claims is more efficient and easier to use
than rival m-banking services.
Suncorp’s mobile offering is browser-based which means customers do
not have to download any programmes onto their phone for the
service to work, but instead log onto the internet via the web
browser on their mobile phone.
Suncorp m-banking customers will be able to access account balance
information, transaction history, pay bills and transfer between
Suncorp and external bank accounts. According to the bank, its
mobile phone bank offering will work from any mobile handset that
can access the internet.
STRATEGY
Deutsche adds to first quarter gloom, builds global retail
business
Deutsche Bank, which will report its first quarter results on 29
April, has said first-quarter writedowns will be around €2.5
billion, more than in the whole of 2007.
“Conditions have become significantly more challenging during the
last few weeks,” said the bank in a statement.
Speaking at an investor conference in London on 1 April, bank
chairman Josef Ackermann said conditions will remain challenging
for Deutsche’s core corporate banking and securities
business.
But Ackermann also highlighted Deutsche’s ongoing international
retail banking push – such as its partnership with Habubank in
Vietnam, plans for a branch network in India and Poland’s db kredyt
consumer finance business – as a strong revenue earner.
In 1995, 69 percent of Deutsche’s net revenues came from Germany,
20 percent from Europe, 7 percent from the Americas and 4 percent
from Asia.
The figures in 2007 were 29 percent, 36 percent, 20 percent and 15
percent, respectively. Over the same time period, net revenues have
increased from €10 billion to €31 billion.
MARKETING NEWS DIGEST
SPORTS SPONSORSHIP
Scotia agrees three-year Canadian cricket
deal
Canada’s Scotiabank has agreed a three-year deal to become the
premier sponsor of cricket in the country as well as the main
sponsor of the national men’s and women’s teams, building on the
bank’s support for the 2007 cricket World Cup and its ten-year
sponsorship of cricket in the West Indies. As part of the
sponsorship programme, the bank and Cricket Canada, the national
regulatory body for cricket in the country, will work to develop a
children- and youth-based programme to encourage development of the
game at grass-roots level.
“The popularity of cricket in the UK, India, Pakistan, Sri Lanka,
Guyana and the West Indies has carried over into several of
Canada’s multicultural communities,” said Scotiabank
vice-president, multicultural banking, Rania Llewellyn. “We look
forward to working with Cricket Canada to enhance the sport’s
appeal across the country at both the professional and community
levels.”
SPORTS SPONSORSHIP
Barclays signs up golfer Phil Mickelson as global brand
ambassador
The UK’s third-largest banking group, Barclays, has signed up the
world’s number two-ranked golfer Phil Mickelson as a brand
ambassador on a multi-year contract.
As part of the deal, Mickelson will wear the Barclays logo on the
chest of his golf apparel, make corporate appearances on behalf of
the bank, and be involved with advertising and marketing campaigns
to build the Barclays brand globally.
Barclays is among the sport’s biggest corporate supporters and is
title sponsor of the Scottish Open, the Singapore Open on the Asian
Tour and The Barclays, the first tournament in the PGA tour
Playoffs.
“Phil is a great ambassador and role model for the game of golf,”
said bank president and noted golf enthusiast Bob Diamond.
BRANDING
Vietnam’s Incombank rebrands as
Vietinbank
Vietnam’s state-owned Vietnam Bank for Industry and Trade
(Incombank) rebranded itself as Vietinbank on 15 April as part of a
wide-ranging move to become a modern financial services group.
According to the bank, the fact the new name contains the word
‘tin’, which means ‘trust’ in Vietnamese, would bolster confidence
among clients.
It has also adopted a new brand logo displaying the union of Heaven
and Earth and Yin and Yang, regarded as complementary principles of
Chinese philosophy.
In March, the Vietnamese government signed a Memorandum of
Understanding on behalf of Vietinbank with UK-headquartered
Standard Chartered valued at up to $600 million, in which the banks
agreed to explore cooperation in areas such as inter-bank lending
and fund raising. Standard Chartered also agreed to provide advice
on Vietinbank’s overseas network expansion and the development of
other banking services.
At the end of 2007, Vietinbank had assets of VND175 trillion ($10.8
billion), accounting for 15 percent of the country’s banks total
assets. Vietinbank has said its brand makeover was a necessary step
on its route towards an expected initial public offering scheduled
for later this year.
VIRAL MARKETING
Cheer the US Olympic team, says BofA
US team Olympics sponsor Bank of America has established an online
social networking programme which calls on the country’s sports
fans to show their support for Team USA through the act of
cheering.
A dedicated website at http://www.americascheer.com/
has been launched which invites fans to upload a video, audio
recording or photograph.
Cheers can also be left for the US team by visiting the bank’s
America’s Cheer mobile tour which will visit 19 cities, comprising
of 26 events, between April and the end of the Beijing Olympic
Games on 24 August.
The viral campaign and road show coincided with the roll out of an
Olympics-themed range of banking products, including cheques and
credit cards, linked to a rewards programme.
Credits can be cashed in for Olympics-themed prizes, such as Team
USA products and the chance to meet US athletes.
SPORTS SPONSORSHIP
HSBC signs up to three-year FEI eventing deal
Global banking giant HSBC has agreed a deal with The Fédération
Equestre Internationale (FEI), the international governing body for
equestrian sport, to become its exclusive financial services
partner. The deal includes title sponsorship of the FEI Eventing
World Cup and the sport’s rankings procedure – to be known as the
HSBC Rankings of Eventing – for the next three years.
Eventing has been part of the Olympic programme since 1912 and
incorporates three aspects of horsemanship – dressage, cross
country and show jumping.
Giles Morgan, HSBC’s group head of sponsorship, said: “It is a
sport that provides equal opportunity for men and women, and is
truly global in scale. We look forward to an exciting partnership,
particularly the development of the HSBC Eventing World Cup.”
CORPORATE SOCIAL RESPONSIBILITY
Chase goes green with Earth Day
support
JPMorgan Chase’s retail arm, Chase, has agreed a major sponsorship
deal to highlight Earth Day, celebrated on 22 April, as well as
signing up to promote the Green Apple Festival, a weekend of music
and environmental awareness at landmark locations in eight major US
cities.
Now in its 39th year, Earth Day is an annual event designed to
promote environmental awareness and highlight the need to build a
safer, healthier and cleaner world.
“Chase has pledged more than financial support for the weekend-long
Festival,” said Peter Shapiro, founder and executive producer of
the Green Apple Festival.
“They have come onboard with manpower, ideas and additional
resources in a way that extends their involvement with local
communities to positively impact the environment.”
In particular, bank volunteers are helping local organisations
raise environmental awareness by cleaning up parks, waterfronts and
neighbourhoods in six of the festival cities. As part of its
commitment, Chase is also supporting a Green Schools pilot
programme in low to moderate income schools in New York, Chicago
and Denver.
CAMPAIGNS
PNC Financial in new green marketing
blitz
PNC Financial Services, which recently trademarked the phrase
“green branch” (see RBI 582), has hit the US market with a
new environmental marketing campaign. The eco-friendly incentives
offered by PNC, which has 43 buildings certified by the US Green
Building Council, include a Prius hybrid car sweepstake, discount
loan rates to purchase a new hybrid car, and finance for
energy-efficient home improvements.
“By combining our leadership in green buildings with innovative
products and services, we can help our customers to bank smarter,”
said Neil Hall, executive vice president and head of retail
distribution, PNC Bank.
The sweepstake with eight Toyota Prius cars, rated the most
fuel-efficient vehicle, runs to 31 May across PNC’s retail banking
region.
