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Home » Daily Briefing » Daily briefing - 18 May 2017

Daily briefing - 18 May 2017


Mexican banking has come a long way since the 1996 banking collapse in the country. Regulations have been strengthened and new banking licences issued, although consumers remain underserved. Among the banks contesting in the market is HSBC Mexico: analysts at Credit Suisse have been praising the bank's "comeback" to retail. However, it appears that the rise of HSBC in Mexico is not adding to the competitive environment at large but is coming mainly at the expense of Citi's Banamex. Credit Suisse believes that "Banorte and Inbursa are better positioned in the current environment, as HSBC's market share gains have taken place on non-revolving credit and mortgages and not on credit cards, an area where Inbursa and Banorte have been clear winners (supported by company-specific initiatives)."

Bank of Ireland is getting its first female chief executive, as the bank appoints 42-year-old Francesca McDonagh to replace Richie Boucher. Ms McDonagh has been with HSBC for twenty years. RTE News reports: "Ms McDonagh, an Oxford University graduate, has significant experience of technological transformation of both digital and core banking systems. In the UK, she re-platformed HSBC's digital offering and introduced a constant flow of innovative improvements to the bank's systems." The bank needs transformation in its digital platforms. Earlier this year, the bank responded to an inquiry from Lafferty News as to the antiquity of its mobile banking app, and was told that the bank would comply with PSD2, which will force the bank to finally implement two factor authentication. Famed investor and current US Secretary of Commerce Wilbur Ross was among a group of investors to take a stake of 35 percent in the bank. Mr Ross's group cashed out last year after trebling the value of their stake.

UK fintech business TransferWise announced that it will enter the black this year, six years after its launch. "The London-based currency exchange startup says that it is currently amassing £8 million a month in revenue and is on target to reach £100 million for the year." The business has proven to be an attractive partner for other fintechs and digital banks, sitting within the apps of businesses such as German mobile bank N26. The company, which claims a ten percent share of the overseas money transfer market in Britain, expects to add another half a million customers over the coming year, reports Finextra.

A regular correspondent in the region fears that the Indian banking sector is about to run into a major storm of its own making, with public sector banks the worst culprits.
Unlike China, the commensurate economic growth to support risk may be lacking. These concerns arise from the publication of a detailed study from McKinsey & Company that argues strenuously for systemic reform: "Inherent structural challenges are getting exposed as the industry has been subjected to multiple shocks over the last few years. Indian banking...lags behind other countries on health, risk, and efficiency metrics. The key challenges are high fragmentation levels, limited differentiation among players, and the inherent restrictions of state ownership on the public sector banks."

Finally, with the Trump White House continuously generating more drama than all the world's soap operas combined, it can be difficult to keep an eye on salient developments in the United States. Buried below the latest story-deluge of political machination and international intrigue, some of today's news items from outside the Washington Beltway include:

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