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Home » Retail Banking 2020 Insights » Morning briefing - 30 September 2016

Morning briefing - 30 September 2016

Wells Fargo is too big to manage and should be broken up, said US congresswoman Maxine Waters yesterday as CEO John Stumpf endured another round of questioning before legislators, appearing to know — or admit — little about the everyday operations of the bank. Several members of the House financial services committee also lambasted the Consumer Financial Protection Bureau for failing to spot the scandal until it was uncovered by the Los Angeles Times. Mr Stumpf at one stage again attempted to defend cross-selling as a way to deliver increased value to customers. The size of Wells' problems can be calculated by the revelation that, as the Financial Times put it: "Even as Mr Stumpf was delivering his testimony, the Office of the Comptroller of the Currency said it had fined the bank $20m for improperly repossessing cars owned by members of the military".

The RBS name will soon become a Scottish-only brand as the bank reveals that the new ringfenced retail bank will be NatWest in England, Wales and Western Europe. "Our proposed future structure under the ring-fencing legislation and our brand strategy are key elements of the bank we are becoming," chief executive Ross McEwan said in the statement. The bank remains 73 percent owned by the British state.

Damned if the do, damned if they don't? Angela Merkel's annus horribilis can't really take another serious blow, but Deutsche Bank is in such a state that it's even taking headline space away from Wells Fargo, which is much further out from the rocks. With Deutsche Bank shares at a record low, and Cryan apparently at a loss, the bank's plan to accelerate digitalisation and partner with MIT has been greeted with amusement. According to Bloomberg, "Deutsche Bank AG Chief Executive Officer John Cryan said the lender has never had as safe a balance sheet in the past two decades and there is 'no basis' for media speculation on clients leaving." Cryan's strenuous denials of the last days have convinced onlookers that something serious is in fact afoot. There's widespread suspicion that the recent intervention of EU financial stability chief Valois Dombrovskis is designed to give cover to Deutsche, perhaps also Commerzbank — and will be welcomed also by Italian banks.

What happened when the world's least-loved bank went into business with Libya's sovereign wealth fund? A young salesman called Youssef Kabbaj took the initiative. "Who else on the planet could sell a billion dollars of derivatives to a regime whose theatrical despot slept in a tent under an all-female warrior guard?" writes Bloomberg's Matthew Campbell and Kit Chellel in the extraordinary tale of how Goldman Sachs helped to blow up the Libyan Investment Authority.

In today's Merchant Services Intelligence, we'll be looking at our latest market research on Asia-Pacific, the future for Verifone and Ingenico, and the resilience of QR codes as a payment method: the next issue is out this afternoon from Lafferty News.

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