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Home » Daily Briefing » Daily Briefing - 7 December 2016

Daily Briefing - 7 December 2016

Bad loans at Turkish banks are putting a strain on relations between the banks and the state, as Turkish president Recep Tayyip Erdogan seeks lower interest rates and lower borrowing costs. But that's not what banks want to hear. They're having problems of their own, as illustrated in the graph below from Bloomberg. It writes: "Troubled loans have risen to the highest in seven years, with some lenders, such as Akbank and Turk Ekonomi Bankasi, a unit of BNP Paribas, reporting a jump of as much as 30 percent in just the last quarter.

-1x-1

In a move designed to ease some of the pressure on banks' earnings and allow them to keep handing out money, Turkey's regulator last week proposed cuts in provisioning ratios, including halving the amounts set aside for potential bad loans to commercial and small-to-medium scale enterprises."

German mobile bank N26 has been generating lots of coverage in the European press now that it's received its banking licence and is probably the envy of John Cryan and his team. Yesterday the bank said it will expand into a further nine European countries, which means adding customer service in French, Italian and Spanish, along with English and German. The success of N26 will be something of a benchmark for mobile banking. CEO Valentin Stalf is actually 31 years old. But how many people will look at this youthful mogul in a hoody and think: "I want to deposit my money in an online German bank run by (what looks like) a teenager"?

One of N26's "innovations" is to offer the Transferwise money transfer service from inside its app. Transferwise was the invention of Taavet Hinrikus, who previously founded Skype, the VOIP service — how quaint that description seems now — that allows free phone calls between users. Skype, which wiped a lot of telecoms revenue off the face of the earth, is now part of the Microsoft suite of services, and now ordinary Skype users are finding out that they're being pushed towards Skype for Business as Microsoft tries to make its $8.5 billion acquisition make money. At the time of its purchase by Microsoft in 2011, Skype hadn't turned a profit, and Microsoft has been trying to correct that situation ever since — by pushing corporate customers onto Skype for Business. Suddenly, it appears that Skype and Skype for Business are incompatible. Expect a lot of missed calls in the coming months.

Wells Fargo chief executive Tim Sloan yesterday welcomed the prospect of a reduced regulatory regime in a Trump presidency. Speaking at a conference hosted by Goldman Sachs yesterday, Mr Sloan was asked to list "one or two" regulatory changes he would like to see. Mr Sloan "reeled off a list of changes," according to the FT, including annual stress tests and capital requirements. "Those would be some examples," Mr Sloan concluded. "I can go on for about another hour." Jamie Dimon also welcomed likely changes in economic policy, particularly a reduced corporate tax burden.

Lafferty's Brexit Council had its initial online meeting yesterday, with 15 major players in the cards and payments industry joining co-chairs Michael Lafferty and Ugo Bechis, along with advisors from British law firms Clifford Chance and Olswang, to lay out the various scenarios that may happen as the United Kingdom begins its withdrawal from the European Union. An edited version of the online meeting will be available for Brexit Council Member prospects tomorrow morning: join the broadcast here at 10am London time. The first offline meeting of the Brexit Council takes place in London on 31 January.

With Same Day ACH now live in the United States, faster payments in the country have become a reality, but the system presents its own challenges, particularly in dealing with fraud. Soon, Early Warning's P2P system, which will be known as Zelle, will also go live. Pymnts.com takes a look at the lessons the US is learning from the UK, and the continued interest in blockchain as a way to deal with KYC issues, despite the fact that blockchain as currently used is not suitable for instant payments. Still, the hope remains that technological progress and investment in immersion technologies will bring blockchain close enough to use for instant payments. "A survey of ten commercial banks from the US, Canada and Europe found 90 percent of respondents are mulling blockchain technology for payments," notes the report.

Life on the road: When greeted into an office as a visitor, an invitation to sit down is customary. That's not always true in the Nordics. On a recent visit to Sweden, we were often welcomed into the office by perfectly friendly hosts — and then invited to stand. Yes, the craze for standing desks is strong in Northern countries. We suspect however that it may be a plot by IKEA to replace perfectly good office desks with shiny new furniture.

Wells Fargo expects short term profit hit from interest rates rise: CEO
Credit Suisse lowers profit targets, pledges greater cost cuts [FT Paywall]
Share excess bandwidth for digital currency
Goldman Sachs Slashes Indian Growth Estimates Amid Currency Crackdown

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