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Home » Daily Briefing » Daily briefing - 19 December 2016

Daily briefing - 19 December 2016

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Authorities in Kiev have declared PrivatBank, the largest lender in Ukraine, insolvent: nationalisation is now underway, and, with a $5.6 billion hole in the bank's balance sheet, that is an expensive undertaking for a people already burdened by the Russian annexation of Crimea. PrivatBank is also the country's dominant bank in terms of issuing and acquiring, having a market share of just over 50 percent in both. As of the end of 2015, the bank had almost $11 billion in assets and almost a third of the country's branches.

How many times this year have we seen "Banca Monte dei Paschi di Siena" and "last-ditch attempt" in the same newspaper headline this year? Alas, too often to induce much confidence in the bank for 2017. Now the troubled Italian bank is launching a share sale to net the €5 billion required for staving off nationalisation. But will the 40,000 retail investors being targeted by the cash call see the potential? "If the privately funded plan falls through, the Rome government would inject €900 million to recapitalise the bank while the rest of the money would come from the mandatory debt-to-equity swap", a source familiar with the matter told Reuters. Far beyond the city of Siena, home to the bank since 1472, that will be a painful process indeed.

Lafferty News has consistently made the point that tech marvels in the world of retail banking and payments are to be welcomed, but with the same sort of scepticism that, say, a parent regards a new babysitter. An important report from the Financial Services Consumer Panel in London examining the online investment sales and advice market makes for sobering reading. Robo-advice "jargon remains prevalent....Portfolio labelling confuses," says Boring Money, who were commissioned to carry out the research. "Robo adviser charges are highly misleading" and the "language used to describe the risk profiles is confusing and inconsistent". The report comes with strong and practical recommendations for the industry, many concerning clear and clutter-free communications with the public.

The abruptly enacted demonetisation policy continues to reshape Indian society, from weddings (an ecosystem run on cash savings) to free time (now spent shuttling to and from the bank). As figures emerge on consumer behaviour following last month's bombshell, it is being revealed that credit card volumes are up but transactions have dropped: understandably, consumers have postponed big-ticket buys while turning to credit cards more often in everyday life. Amazon India sees opportunity in the confusion: it has just launched an online wallet, 'Amazon Pay Balance', in an attempt to build up cashless orders.

African Banks' Silicon Valley Moment [WSJ Paywall]
Egypt's Banque Misr signs MOU with Chinese lender over $500m loan
Are there too many mobile payment systems?
Spanish banks' bad loans 9.3 percent of total credit in October
Brexit: Japanese banks tell Philip Hammond they will move UK jobs to Europe within half a year
London pub trials self-service beer pump with contactless card reader

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