The UK Faster Payments Service heralds a new epoch for payments. Although there are obvious benefits to individuals in terms of convenience and certainty of payment, the potential benefits to business and the economy are even greater. Martin Kearsley, director of strategy at VocaLink, explains how the infrastructure was designed and its potential benefits to consumers and businesses alike.
FX4Cash, the new cross-currency payment solution from Deutsche Bank, addresses some of the problems faced by financial institutions making regular lower-value cross-currency payments for their clients. Tim Merrell and Rita Saverino of Deutsche Bank’s global transaction banking and global markets divisions, respectively, discuss the new product.
The Banker has been at the forefront of realising the importance of what is variously called corporate social responsibility; sustainability; and environmental, social and strategic governance, splashing a piece on our cover in April 2002 with the headline: The Importance of Being Good: Why Unethical Banks Will Not Survive. We were, perhaps, too categorical.
Industrial and Commercial Bank of China has announced a 57% net profit, increased in the first half to Rmb64.9bn ($9.5bn), on the back of higher fee income and widening government-set interest rate margins. ICBC is 5% owned by Goldman Sachs. The result is the largest first-half profit of any bank in the world, and the bank is the world’s largest in terms of market capitalisation. HSBC’s first-half results put it in second place, with about $2bn less than the Chinese bank.
Financial markets are experiencing almost unparallelled turbulence. Write-offs continue to mount – estimates now top $1000bn; job cuts are becoming more commonplace; and many senior executives have been axed. A few household names have even disappeared for good. But some financial institutions will become stronger in the aftermath of the credit crunch.
Understanding UK bank strategies can be difficult. The past year has seen not only Royal Bank of Scotland’s joint acquisition of the Netherlands’ giant ABN AMRO but also the disastrous run on Northern Rock, record 2007 profits at HSBC Holdings and, last month, RBS’s first half-year loss in 40 years, following $11.4bn in writedowns.
Turbulent times bring with them new opportunities and heightened competition. Ultimately, there will be those International Financial Centres that feel the squeeze, yet there will be others that increase their market share and profit from the credit crunch. By Vince Colvin & John Culliane Deloitte.