Scandinavia's biggest bank might move from Sweden to Finland or Denmark, as Nordea Bank's testy relationship with Swedish regulations is leading it to contemplate moving headquarters from the city in which it was founded 17 years ago. There is a carrot, besides the stick: profits could be boosted by up to €330m, according to analysis by Berenberg. One compelling matter is the extra capital buffer required in Sweden: easing that requirement by moving to Helsinki or Copenhagen could free up €6bn in capital says Berenberg, as reported in the Financial Times. Sweden has stricter regulatory capital standards than its neighbours: just over six months ago Nordea's capital ratio was deemed to be falling short by Swedish regulators, although a capital relief instrument got it closer to the required level. Late last year, Nordea announced an internal merger, such that its Danish subsidiary would become a branch instead. Casper von Koskull, chief executive, will announce the headquarters decision before July.
On one reading, the European Union's second Payment Services Directive (PSD2) was designed to accommodate long-term partnership between banks and fintechs, allowing each sector to do what it does best. On another reading, PSD2 is the avenging of the body politic on a banking sector held responsible for the 2008 crash and the subsequent series of crises with which we are all too familiar. Either way, there is now doubt being expressed that the central vision of data access-empowered Third Party Providers will ever truly come to pass. The latest flashpoint is emerging around the Regulatory Technical Standards (RTS) announced by the European Banking Authority (EBA) earlier this year. The EBA contends that 'screen scraping' should be outlawed; in return, the fintechs (in the shape of a manifesto) argue that to remove that software option from their toolbox will undercut their ability to serve consumers. CNBC have written a useful summary of the battle.
More quarterly results have been emerging from around the world over the last week. For our purposes, the headlines — all containing the word "profit", we note — summarise the respective situations neatly:
- Commerzbank's Q1 net profit beats forecasts on one-off effect
- OCBC Q1 net profit up 14% to $973m, much better than expected
- Commonwealth Bank shares slump despite $2.4bn Q3 profit
- Westpac tips housing to cool as it unveils $4.017b profit
- National Australia Bank swings to profit
We end with what one of our regular correspondents understandably describes as a must-read piece by Boston Consulting Group on how Chinese e-commerce is way ahead of the world. The article looks for lessons from the country for the West on the future of shopping. Alibaba's 'new retail' dwarfs Amazon's web-centric ecosystem on this account: "Drawing on its detailed data on nearly 500 million monthly active users, Alibaba has identified 8,000 different consumer descriptors, so that merchants can home in on their target customers with extraordinary precision — and increase the effectiveness of their consumer engagement efforts."
Small firms shut out of global financial system by sanctions-fearing banks [FT paywall]
Bitcoin hits $1,600 for the first time
Despite rate rise, Bank of America continues to pay depositors peanuts
Prominent hedge fund manager sees signs of credit crisis in China [Brief video interview from last week]
"In his irreverent 1906 masterpiece The Devil's Dictionary, the 19th-century American writer Ambrose Bierce took aim at all manner of human hypocrisies, sins and shortcomings by penning a lexicon of cynical word definitions for a cynical age. [Today] we channel Bierce's sardonic spirit to examine the eccentricities and innuendo of Silicon Valley, from angel investors to zombie startups:
- bleeding edge, n. The point at which a product is perched so far out on the cutting edge of technological development that it has to cut itself to get your attention.
- deep dive, n. A shallow dive that can wait until later.
- disruption, n. The act of replacing a rusty nail with a crooked one.
- evangelist, n. An ardent supporter whose enthusiasm for your product is matched only by their ignorance of the alternatives."
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