Category: Banking

2015 Marks New Year of Rocketing Growth for Fee-Only Registered Investment Advisors
BankingTransactional and Investment Banking

2015 Marks New Year of Rocketing Growth for Fee-Only Registered Investment Advisors

It will mark the seventh consecutive year of growth for RIAs, according to industry statistics. Between 2007 and 2013, RIAs have increased their assets under management by 82 percent, according to the independent research firm, Aite Group LLC. As one of the fastest growing RIAs in the country, The Mather Group exemplifies this trend. Launched in 2011, after breaking away from Morgan Stanley, The Mather Group has seen their assets under management quadruple to over $700 million while their staff has doubled.

“Our growth is driven by honest and genuine conversations,” says Stewart Mather, CFP, CIMA, the head of the firm. “People want to work with a fiduciary firm that is 100 percent accountable. Our only form of compensation is a transparent fee for our advice; there are no commissions and no conflicts of interest.”

Fee-only independent advisories such as The Mather Group are held to the highest fiduciary standard by law, requiring that they always offer guidance and make recommendations that are in the best interest of their clients. This isn’t true for broker-dealers who are paid commissions for selling investment products, resulting in potential conflicts of interest.

“The financial crisis really opened peoples’ eyes to the conflicts of interest Wall Street brokerage houses and banks present,” said Mather. The problem is so epidemic that Congress introduced The Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 in part to address this issue. Unfortunately, nothing yet has been done to hold Wall Street advisors to a uniform fiduciary standard which would go far to help protect investors.

Fortunately, the millions of baby boomers preparing for retirement have gotten wiser. The RIA channel is the fastest growing, set to control 28 percent of the wealth management market by 2018 with $2.4 trillion in assets, according to research firm Cerulli Associates. “Investors are definitely getting wiser,” says Mather, “This is especially true for high net-worth investors, who are scouting the best options to not only preserve but expand their wealth as they prepare to retire.”

Mather predicts the growth of the RIA channel will continue to accelerate over the next five years as awareness continues to grow among consumers about the importance of the fiduciary standard. He also anticipates that lawmakers in Washington will continue to drag their feet when it comes to applying that same standard to broker-dealers.

“There’s simply too much lobbying against it by the big banks and brokerage houses,” Mather notes. “Ultimately, the lack of action confuses and hurts investors.”

The Mather Group is a fee-only Registered Investment Advisor focused on guiding corporate executives into successful retirement. Services offered include investment management, retirement planning, tax and estate planning. The firm has offices in Oak Brook Terrace, IL and Houston, TX.

Barclays Strengthens Corporate Banking Insurance and Financial Intermediaries Team With Two New Hires
BankingTransactional and Investment Banking

Barclays Strengthens Corporate Banking Insurance and Financial Intermediaries Team With Two New Hires

Andrew joins as a Director within the Insurance team and will be responsible for further developing Barclays’ proposition across Europe for both life and non-life markets. Prior to joining Barclays he led the insurance team at National Australia Bank in London, with responsibility for UK and Europe, as well as coverage of parts of the Bermudan market. He has significant experience working with large multinational insurance clients across a number of regions, with a focus on the life insurance and global reinsurance markets.

Scott joins as a Director within the Financial Intermediaries team and will be responsible for structuring solutions for clients in the broker dealer and securitisation sectors. Scott has held a number of senior positions across the financial services and advisory market, and will bring significant expertise to this new position.

Commenting on the appointments, Carl Boulton said: “Andrew and Scott both bring a wealth of experience of their respective markets to the team. Their appointment underscores our commitment to the sector, and to continuing to develop the range of relevant, quality products and services we offer to our insurance and financial intermediary clients worldwide.”

KPMG Named A Leader In Consulting Services For Banking
BankingTransactional and Investment Banking

KPMG Named A Leader In Consulting Services For Banking, Capital Markets, And Insurance Industries

KPMG International has been recognized as a Leader in the IDC MarketScapes for the banking, capital markets, and insurance industries.

The IDC MarketScape studies assess the capability and business strategy of business consulting firms with global scale, positioning them according to IDC MarketScape analysis and buyer perceptions.

Relative to other consulting firms evaluated, the IDC MarketScape assessments found KPMG firms to be consistently viewed as the strongest or most capable in a number of areas for each of the industries, including:

-Directly improving clients’ overall commercial performance.
-Delivering value-creating innovation.
-Maximizing the value of a project.
-Challenging corporate culture.

“We are very pleased to be named as a leader in business consulting to the financial services industry by the IDC MarketScape,” said Jeremy Anderson, Chairman, Global Financial Services, KPMG International. “In all of the sectors assessed by the IDC MarketScape – banking, capital markets, and insurance – meeting the needs of clients requires a broad range of disciplines, with innovative thinking around use of data and technology, as well as expertise in understanding organizations, culture change, and training. These are areas KPMG professionals are focused on with clients across the financial services industry.”

According to IDC, a significant component of the IDC MarketScape assessment model is the inclusion of business consulting buyers’ perception of both the key characteristics and capabilities of the consulting providers. “As one would expect of a market leader, KPMG performed very well on this assessment,” noted the IDC MarketScape.
Banking

“We find the IDC MarketScape assessment to be very consistent with what we hear from clients,” said David Sayer, Global Sector Leader, Banking, KPMG International. “All of the areas identified in the assessment are extremely important, and being highly perceived in helping clients comply with regulations is especially gratifying. The rapidly changing regulatory landscape is at the top of the agenda for the banking sector.”

Capital Markets

“The IDC MarketScape assessment reflects the critical ways KPMG firms support clients in the capital markets, with not only deep insight into their business operations and capabilities in areas such as big data, but also with the important ability to provide industry insights, transfer knowledge, and provide the necessary spectrum of services, working effectively with the client’s teams,” said Michael Conover, Global Sector Lead, Capital Markets, KPMG International.
Insurance

“The IDC MarketScape assessment positions KPMG in the ‘Leaders’ category in terms of capabilities for the insurance industry,” noted Gary Reader, Global Sector Lead, Insurance, KPMG International. “It reinforces our strategy of focusing on innovation and the disruptive forces impacting the sector, and engaging with leading insurance companies as they respond to market changes that are transforming their businesses.”

Barclays Appoints Group Chief Operating Officer
BankingTransactional and Investment Banking

Barclays Appoints Group Chief Operating Officer

Barclays has appointed Jonathan Moulds to the newly created role of Group Chief Operating Officer. Mr Moulds will join the Executive Committee of Barclays and report directly to the Group Chief Executive Antony Jenkins.

In this role Mr Moulds will lead major change programmes across Barclays and is charged with accelerating delivery of the Group’s strategic plan, Transform. He will have accountability for the Structural Reform Programme, which includes the implementation of the Ring-Fenced Bank in the UK and the Intermediate Holding Company in the US, and will oversee the Strategy and Corporate Development Team. Mr Moulds will also establish and chair a Group Operating Committee which will ensure that the organisation is executing Barclays’ strategy in an aligned and efficient way.

Mr Moulds will take up his post on 2 February 2015.

Commenting on the appointment, Antony Jenkins, Group Chief Executive, said:

“The progress we have made over the past two years in terms of operational, financial, and cultural transformation at Barclays has been enormous.

“My decision to create a Group Chief Operating Officer role at this time is specifically intended to ensure we continue to deliver on our strategy, but more importantly to accelerate execution where possible. There are multiple major change programmes in flight across the Group, designed to achieve our ambitious goals, and which will in turn help to drive the sustainable returns our shareholders deserve. A Group COO will give us additional leadership bandwidth and capability to make that happen.

“Jonathan Moulds has a huge wealth of relevant industry experience to bring to Barclays and to this role. Before leaving the organisation at the end of 2012, he spent over 15 years at Bank of America Merrill Lynch in a variety of senior leadership roles, latterly as CEO of Merrill Lynch International and Head of BoAML Europe. I am delighted to welcome such a seasoned and able leader to Barclays, and I look forward to working with him to accelerate progress towards becoming the ‘Go-To’ Bank.”

Jonathan Moulds, Group Chief Operating Officer designate, said:

“This is a period of profound change for Barclays as the Group builds momentum in the implementation of its strategy and deals with external forces including structural reform. Playing a part in leading the transformation of Barclays represents a hugely exciting professional challenge for me. I am looking forward to taking up my new post and to working with Antony and my colleagues on the Executive Committee in helping the bank realise its full potential.”

Money Transfer/Remittance Market Growth Driven by Globally Escalating Migrant Population
BankingCash Management

Money Transfer/Remittance Market Growth Driven by Globally Escalating Migrant Population

MarketReportsOnline.com adds Global Remittance Report: 2014 Edition research report of 72 pages to the banking and financial services industry intelligence collection of its online market research library.

The growth of the remittance market is strongly driven by growing international migration as the people migrate chiefly with the focus of sending their earnings to their families back home. In 2013, international migrants comprised about 3.2% of the world population, compared to 2.9% in 1990. International migrants signify a huge customer base for the worldwide remittance industry. Over US$160 billion have reached rural families in developing countries. Driven to various socio-political and economic factors, the same is expected to steadily grow in the near future. This is further anticipated to prove instrumental in the growth of the global remittance market. Complete report is available at http://www.marketreportsonline.com/380104.html .

As per the report Global Remittance Report: 2014 Edition, apart from unceasing increasing migrant population, other factors which are providing the immense growth opportunities for global remittance market include rising employed and urban population and ameliorating global economic development. Some of the noteworthy developments of this industry include unstable remittance cost, the impact of remittance on health, education and poverty, wide portfolio of remittance services and correlation between remittance and foreign exchange rates. Also, the number of electronic payment service providers that offer over-the-counter-payments, mobile money payment and payment cards have increased rapidly.

Remittance is defined as transfer of money by a person who resides in a foreign country to his or her home country. Remittance industry contributes to economic growth and livelihoods of people across the world. In most of the developing countries, money sent by foreign migrants to their home countries constitutes the second largest financial inflow to the respective nations. Furthermore, in the money receiving countries, remittance industry promotes further economic dependence on the global economy instead of building sustainable local economies. Remittance channel is collectively comprised of a sender, a recipient, intermediaries in both countries and the payment interface used by the intermediaries. The remittance system encompasses the following components: Remittance Service Providers (RSP), Remittance Corridors, Remittance Network and Money Transfer System. Remittance services are divided primarily on the basis of ways a network of access points is created and linked. There are broadly four categories: unilateral services, franchised services, negotiated services and open services.

 

Standard Bank Wins 2014 IFM Award for 'Best Managed Bank
BankingTransactional and Investment Banking

Standard Bank Wins 2014 IFM Award for ‘Best Managed Bank, Angola’

London-based International Finance Magazine has conferred the 2014 award for ‘Best Managed Bank’ in Angola to Standard Bank. The award was presented on November 18 by the honourable Lord Sheikh, Baron Sheikh of Cornhill, House of Lords; Sheikh Bilal Khan, UK Catalyst at UKTI and Co-Chairman of Dome Advisory and Peter Meyer, CEO, Middle East Association at a gala dinner in the ball room of the Jumeirah Carlton Tower in London.

Standard Bank has a 152-year history in South Africa and started building a franchise in the rest of Africa in the early 1990s. The bank currently operates in 20 countries on the African continent, including South Africa, as well as in other selected emerging markets.

Standard Bank Angola, on receiving the award, said: “It is with great pleasure that we receive such an award. This award represents the effort and dedication the Angolan team has put in order to guarantee what is today a successful organisation with motivated employees and satisfied clients.”

Broadridge Acquires Foreign Exchange
BankingFX and Payment

Broadridge Acquires Foreign Exchange, Cash Management Technology Company to Expand Support for Banks and Broker-Dealers

TwoFour Systems LLC is the technology subsidiary of TwoFour Holdings LLC.TwoFour’s technology provides componentized front-to-back office integration with straight-through-processing for FX, exchange-traded futures and options, metals, interest rate derivatives and money market instruments. Its cash management solution provides intra-day real-time aggregation and reporting of balances and cash flows with detailed global position-views for single and multi-entity institutions.

“This acquisition advances our strategy to deliver powerful multi-asset class solutions to our clients globally,” said Broadridge President and Chief Executive Officer Richard J. Daly. “It is one of the latest developments in our ongoing tuck-in acquisition strategy, which continues to bring innovative technologies to our clients and strong internal rates of return to Broadridge.”

Broadridge is integrating the technology with its reconciliations and matching technologies to create a solution that supports an extensive range of cash and liquidity processes. TwoFour Systems will be branded Broadridge FX and Liquidity Solutions, operating within Broadridge’s Global Technology and Operations division.

“Financial institutions are looking to capitalize on growth in the foreign exchange market, as emerging markets mature and international currencies become more important,” said Tom Carey, President, Global Technology and Operations International, Broadridge. “TwoFour’s technology will enhance Broadridge’s ability to provide solutions to its clients within a critical asset class, enabling banks, payment companies and broker-dealers to expand their offerings and revenue streams. We are delighted to have these solutions, experienced management, and highly skilled people enhancing our overall solution capabilities.”

“TwoFour’s technology, market strategy and high-touch, client-centric approach directly align with Broadridge’s mission to help financial institutions mutualize costs and increase efficiencies, and we are thrilled to become part of the Broadridge family,” said Steve Davis, general manager of Broadridge FX and Liquidity Solutions and former CEO of TwoFour Holdings. “As part of Broadridge we are better-positioned than ever to enable banks, payment companies and broker-dealers around the world to use this flexible and dynamic offering to capitalize on the opportunities in the foreign exchange markets.”

Broadridge Financial Solutions, Inc. (NYSE: BR) is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and corporate issuers globally. Broadridge’s investor communications, securities processing and business process outsourcing solutions help clients reduce their capital investments in operations infrastructure, allowing them to increase their focus on core business activities. With over 50 years of experience, Broadridge’s infrastructure underpins proxy voting services for over 90% of public companies and mutual funds in North America, and processes more than $5 trillion in fixed income and equity trades per day. Broadridge employs approximately 6,700 full-time associates in 14 countries.

UK Government to Sell Part of Remaining Shareholding in Lloyds
BankingTransactional and Investment Banking

UK Government to Sell Part of Remaining Shareholding in Lloyds

The UK Chancellor of the Exchequer, George Osborne, has today set out the next stage in the government’s plan to return Lloyds Banking Group to private ownership and get taxpayers’ money back, by announcing that the government will sell part of its remaining shareholding in the firm through a trading plan.

The government received advice from UK Financial Investments today that it would be appropriate to sell another part of the government’s shareholding in Lloyds through a trading plan. The government agrees with that advice and has authorised the plan to be put in place.

The government remains committed to restoring Lloyds to private ownership in a way which gets the best value for the taxpayer, building on the success of previous share sales which have so far raised £7.4 billion. Shares will only be sold where this objective is met.

Osborne said: “I can confirm today that the government is taking the next step in returning Lloyds Banking Group to private ownership.”

“The trading plan I’m initiating today is made possible by our long term economic plan which is delivering a more secure and resilient economy. It is another step in reducing our national debt and in getting taxpayers’ money back.”

A trading plan involves gradually selling shares in the market over time, in an orderly and measured way. The trading plan has been initiated today and sales may commence in the coming days. The plan will be in place for approximately six months.

Shares will not be sold below the average price the previous government paid for them, which was 73.6p. The previous sales of the government’s shares in Lloyds have raised £7.4bn, reducing the government’s stake in the bank from around 40% to just under 25%.

Morgan Stanley will act as broker on behalf of HM Treasury to execute the trading plan.

 

QE
BankingTransactional and Investment Banking

QE

“The European Central Bank today announced that it has allotted €129.8 billion in lending to the real economy, through its second targeted longer-term refinancing operation (TLTRO). This exceeds the €82.6 billion lent through the first such programme, but does not make significant inroads into the demand and deflation problems faced by the currency bloc.

The TLTRO provides cheap finance to Eurozone banks on the condition they lend to the real economy. The ECB intended to lend €400 billion across two rounds, but ended up reaching just half that. The programme is supposedly targeted at real-economy activity in order to tackle the central problem of weak demand, rather than inflating asset-price bubbles in financial and property markets, which many suspect of quantitative easing in the UK and US. However, TLTROs only work if real-economy investors believe the demand will be there for the production they invest in. And the demand is only there if consumers and businesses feel more confident, meaning that raising prices in asset markets such as property can actually be an effective, if inefficient solution: while it does not tackle the root cause, at least its effects are powerful.

The results of this operation are crucial in determining whether or not the ECB will carry out full quantitative easing in the new year. So far, it has used other unconventional measures such as negative interest rates, asset-backed securities purchases and TLTROs to avoid the difficulties inherent in agreeing a government bond buying programme between 18 central banks with different agendas. Waiting for the results has bought the ECB stalling time before launching QE – during which the problem has become far worse, with inflation falling further and growth forecasts being revised down. Today’s data make full QE significantly more likely: the ECB would like to increase its balance sheet to €3 trillion, but reaching that target will be difficult if not impossible without expanding the range of instruments available to it.

We expect some extension of corporate and eventually sovereign bond purchases. However, a new sticking-point is the return of the Greek crisis: with a strong likelihood of a debt haircut should the left-wing Syriza party take power, the ECB as a key creditor will find government bond purchases less palatable. Some workaround may, then, be necessary. Harder to predict is whether QE will have an appreciable effect on demand. Cebr does not expect it to solve the weak demand problems alone. Necessary accompaniments will include structural reforms and a measure of fiscal loosening by those states that can afford it – however, Germany has just published its budget, which is now balanced and therefore tighter than it has been so far. Some may argue therefore that the ECB has done more than its share already. However, its critics are unlikely to be appeased unless it takes the big step.”

Craig Bundell Joins TSB Bank as Head of Credit Cards
BankingFX and Payment

Craig Bundell Joins TSB Bank as Head of Credit Cards

TSB Bank plc today announces the appointment of Craig Bundell who joins as the Bank’s Head of Credit Cards, with immediate effect. Craig will have responsibility for managing TSB’s Credit Card business and will report directly to Jatin Patel, Product Director at TSB.

Craig joins TSB from Mastercard, where he held the position of VP, European Business Lead, driving the business and commercial development across Europe for one of Mastercard’s key accounts.

Prior to this he was the Head of Customer Management in Santander’s UK Cards division, before being transferred to the USA to lead the launch of Santander’s first in-house Credit Card business within its US Cards division.

Craig has also held other key Credit Card and consumer finance roles at Visa Europe, HSBC and Barclays.

Commenting on Craig’s appointment, Jatin Patel, Product Director at TSB says: “I am delighted that Craig is joining TSB and I look forward to working with him. He has a wealth of experience and knowledge in the credit card world that will be invaluable in shaping the future of TSB’s Credit Card business.”

Craig Bundell, Head of Credit Cards, for TSB, says: “I am looking forward to leading TSB’s Credit Card business and being part of Britain’s challenger bank. I am committed to providing people with great credit card offers and excellent customer service, to help bring local banking to more people in Britain.”

Momentum Building for Agriculture Investments Worldwide
BankingTransactional and Investment Banking

Momentum Building for Agriculture Investments Worldwide

Agriculture as an asset class has caught the attention of the investment community recently due to the sector’s strong macro fundamentals. The latest farmland index report from Knight Frank indicates that the average value of UK farmland has increased 187% over the past decade. In addition to traditional farmland strategies, this month has seen a flurry of investment activity at different points along the agricultural value chain, showing the diverse interest of investors. This momentum is expected to continue, and will be examined in detail at the fifth annual Global AgInvesting Europe conference at The Landmark in London, 1-3 December 2014.

Global AgInvesting (GAI) has been tracking November’s relevant deals in dairy and precision farming technology. “The increased consumption of animal proteins by the growing middle class in emerging markets has piqued investor interest in the dairy industry,” said Philippe de Laperouse, event chair/managing director at HighQuest Group, the event host. As an example, he noted Theo Muller’s purchase of Dairy Crest’s dairy business for £80m this week, solidifying control of 30% of the UK fresh milk market, as well as the rival bids for control of Egypt’s Arab Dairy Products from Saudi Arabia’s Arrow Food Distribution and Pioneers Holdings in Bahrain.

Big data has commanded the attention of agriculture investors since Monsanto’s purchase of Climate Corp last year for nearly US$1bn. This week, Intel Capital invested US$10mn in Precision Hawk, a company that produces unmanned aerial vehicles (UAVs) to collect farm data. Days later, Kleiner Perkins Caufield & Byers announced an investment in Farmers Edge, which utilises satellite imagery and in-field telematics to increase yield and decrease environmental impact. “We expect to see continued growth in the number of deals in this area,” said de Laperouse. “We will be exploring these opportunities and many more along the value chain at the conference next month, including permanent crops, aquaculture, and infrastructure and logistics.”

GAI Europe 2014 features more than 70 international thought leaders who will provide attendees with a broad picture of the agriculture investing landscape and a clear idea of where the real money is moving in the space.

Global AgInvesting, the world’s most well attended agriculture investment conference series, hosts five international events annually, curates a critical news aggregation service, and publishes the agricultural investment community’s leading publication, the Global AgInvesting Quarterly.

 

Five Banks Fined £1.1bn for FX Failings
BankingFX and Payment

Five Banks Fined £1.1bn for FX Failings

The Financial Conduct Authority (FCA) has imposed fines totalling £1,114,918,000 ($1.7 billion) on five banks for failing to control business practices in their G10 spot foreign exchange (FX) trading operations: Citibank N.A. £225,575,000 ($358 million), HSBC Bank Plc £216,363,000 ($343 million), JPMorgan Chase Bank N.A. £222,166,000 ($352 million), The Royal Bank of Scotland Plc £217,000,000 ($344 million) and UBS AG £233,814,000 ($371 million) (‘the Banks’).

The G10 spot FX market is a systemically important financial market. At the heart of today’s action is the FCA’s finding that the failings at these banks undermine confidence in the UK financial system and put its integrity at risk.

In relation to Barclays Bank Plc, the FCA says it will progress its investigation into that firm which will cover its G10 spot FX trading business and also wider FX business areas.

In addition to taking enforcement action against and investigating the six firms where we found the worst misconduct, the FCA is launching an industry-wide remediation programme to ensure firms address the root causes of these failings and drive up standards across the market. It says it will require senior management at firms to take responsibility for delivering the necessary changes and attest that this work has been completed.

This complements the FCA’s ongoing supervisory work and the wider reforms to the fixed income, commodity and currency markets which are the subject of the UK Fair and Effective Markets Review.

Between 1 January 2008 and 15 October 2013, the FCA found that ineffective controls at the banks allowed G10 spot FX traders to put their banks’ interests ahead of those of their clients, other market participants and the wider UK financial system. The banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct.

These failings, says the FCA, allowed traders at those banks to behave unacceptably: they shared information about clients’ activities which they had been trusted to keep confidential and attempted to manipulate G10 spot FX currency rates, including in collusion with traders at other firms, in a way that could disadvantage those clients and the market.

Today’s fines are the largest ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA), and this is the first time the FCA has pursued a settlement with a group of banks in this way. The FCA has worked closely with other regulators in the UK, Europe and the US: today the Swiss regulator, FINMA, has disgorged CHF 134 million ($138 million) from UBS AG; and, in the US, the Commodity Futures Trading Commission (‘the CFTC’) has imposed a total financial penalty of over $1.4 billion on the banks.

 

Jacob Bier to Join Greenhill as a Senior Advisor
BankingTransactional and Investment Banking

Jacob Bier to Join Greenhill as a Senior Advisor

Greenhill & Co., Inc., a leading independent investment bank, announced today that Jacob Bier has agreed to join the firm effective January 1, 2015, as a Senior Advisor to assist in the expansion of the firm’s client relationships in the Nordic region, with particular emphasis on Denmark.

Bier has been a senior lawyer at Plesner, a leading law firm in Denmark, where he spent 28 years advising corporate clients, state-owned enterprises, foundations and financial sponsors on corporate transactions.

David Wyles and Luca Ferrari, co-heads of Greenhill European Corporate Advisory, said, “Jacob’s experience ranges from M&A, to capital markets, to corporate restructurings, but what we recognise most in Jacob is his ability to deliver clear, independent advice on issues of significance, and be trusted by his clients when delivering such advice. Having worked with Jacob in the past, we are well aware of his expertise as counsel, and now we look forward to having his help in growing our Nordic, and specifically Danish, franchise.”

Bier added, “Greenhill is a global investment banking firm with a clear strategy and an excellent reputation. I am looking forward to working with the firm and assisting Greenhill in developing its business in Denmark and the rest of the Nordic region.”

Greenhill & Co., Inc. is a leading independent investment bank focused on providing financial advice on significant mergers, acquisitions, restructurings, financings and capital raising to corporations, partnerships, institutions and governments. It acts for clients located throughout the world from its offices in New York, London, Frankfurt, Sao Paulo, Stockholm, Sydney, Tokyo, Toronto, Chicago, Houston, Los Angeles, Melbourne and San Francisco.

EIB Loan Provides £1.5bn for UK National Grid Investmentment
BankingTransactional and Investment Banking

EIB Loan Provides £1.5bn for UK National Grid Investmentment

The European Investment Bank has agreed to provide GBP 1.5 billion (EUR 1.92 billion) for investment by National Grid plc across its national electricity transmission network. This new support for connecting new power generation, upgrade ageing assets and improve network resilience to climate and security risks represents the largest ever single loan made by Europe’s long-term lending institution. The new long-term loan will include capital investment by National Grid reinforcing infrastructure between the Wirral and Scotland, and the London Power Tunnels.

“Investment in the UK electricity transmission network is essential to prepare for future demand, connect new sources of renewable energy and upgrade old facilities. This agreement, the largest ever single loan to be provided by the European Investment Bank, reflects both the scale of energy investment needed and National Grid’s own experience in implementing such a diverse capital investment programme.” said Jonathan Taylor, European Investment Bank Vice President.

Malcolm Cooper, Global Tax and Treasury Director at National Grid highlighted that “the significant European Investment Bank loan will be used to fund infrastructure investment and build an electricity network for the future.”

The EIB backed programme will also include improvements to protect critical infrastructure from floods and providing substation capacity needed for new connections to offshore wind farms and new interconnectors to continental Europe.

Since 2009 the EIB has provided GBP 5.7 billion for investment in energy infrastructure, including electricity distribution, offshore transmission links, energy efficiency, interconnectors to the continent and wind farms such as London Array and West of Duddon Sands.

Over the last five years the European Investment Bank has provided nearly GBP 22 billion for investment in UK infrastructure including transport, social housing, hospital, water, schools and universities.

ECB Assumes Responsibility for Euro Area Banking Supervision
BankingTransactional and Investment Banking

ECB Assumes Responsibility for Euro Area Banking Supervision

The European Central Bank (ECB) today assumed responsibility for the supervision of euro area banks, following a year-long preparatory phase which included an in-depth examination of the resilience and balance sheets of the biggest banks in the Euro area.

The Single Supervisory Mechanism (SSM) is a new system of banking supervision, comprising the ECB and the national competent authorities of the participating countries. Its main aims are to contribute to the safety and soundness of credit institutions and the stability of the European financial system and to ensure consistent supervision.

The ECB will directly supervise 120 significant banking groups, which represent 82% (by assets) of the euro area banking sector. For all other 3,500.banks the ECB will also set and monitor the supervisory standards and work closely with the national competent authorities in the supervision of these banks.

Danièle Nouy, Chair of the Supervisory Board of the ECB said “Much has been achieved to prepare for ECB Banking Supervision. We now have a unique opportunity to develop a culture of supervision that is truly European, building on the best practices of supervisors from across the euro area.”

Sabine Lautenschläger, Vice-Chair of the Supervisory Board and Executive Board member of the ECB said: “European-level banking supervision will improve and strengthen financial stability, ensuring a level playing field in the supervisory requirements to be met by banks.”

The ECB assumes the supervisory tasks conferred on it by the SSM Regulation one year after the Regulation entered into force. Over the past year, much preparatory work has been undertaken, including the completion of the comprehensive assessment, a health check of the biggest banks, as well as the adoption of legal acts defining how the SSM operates and the establishment of new governance structures at the ECB.

Schroders Announces Further Growth in LDI Solutions Team
BankingTransactional and Investment Banking

Schroders Announces Further Growth in LDI Solutions Team

Schroders Portfolio Solutions, part of Schroders Multi-Asset Business, is today announcing the appointment of Philip Howard to the role of LDI Solutions Manager. This appointment will support the continuing growth of Schroders LDI team in London and replace an existing manager who is transferring to New York to develop a new venture in North America.

Philip Howard joins Schroders later this month as an LDI Solutions Manager. He will be joining Schroders from Mercer where he has been a part of its Financial Strategy Group for seven years. Philip advises clients on LDI and other complex strategies, experience that is well-suited to his new role within Portfolio Solutions.

Philip takes over from Daniel Morris, who is currently an LDI Solutions Manager in the London office. After a period of handover, Daniel will transfer to New York at the beginning of 2015, where he will partner with US Multi-Asset Product Specialist Seth Finkelstein on a new venture to establish Schroders Portfolio Solutions business in North America.

These developments are part of a continuing process to promote experienced people within the business and at the same time, bring on new talent to ensure that resources will always be sufficient to meet the needs of our clients.

Andrew Connell, Head of Portfolio Solutions commented:“With his experience working on solutions in a specialist team within a leading consultancy, Philip is a strong addition to our team. We are confident that he will help ensure we continue to deliver on both our investment and service promises to current and future clients. Philip’s arrival also allows Daniel to pursue an exciting opportunity that will make our investment solutions available to Schroders’ clients in North America.”

Bank of England Sets Out How It Will Resolve Failed Institutions
BankingTransactional and Investment Banking

Bank of England Sets Out How It Will Resolve Failed Institutions

The Bank of England is today publishing its approach to resolving a failed bank, building society or investment firm. Resolution is the process by which the authorities can intervene to manage the failure of a firm.

The need for a robust set of resolution arrangements was made clear during the financial crisis. Given the risks to financial stability that would have arisen had individual institutions been allowed to fail and enter normal insolvency, it was necessary for the public authorities to intervene to limit the disruption, including by providing public funds to recapitalise some banks.

The Bank of England has a remit to maintain financial stability: to protect and enhance the resilience of the UK financial system. As part of achieving that, firms must be able to fail in an orderly way without causing systemic consequences or critical disruption to economic activity. This publication explains how the Bank would use its resolution powers to do this in practice.

The publication sets out the Bank of England’s toolkit and provides detail about how it would be applied. It explains the purpose and objectives of the UK’s resolution regime, its key features, the approach that the Bank would take to resolve a failed firm and the arrangements for safeguarding the rights of depositors, clients, counterparties and creditors.

To achieve orderly resolution, individual firms need to have feasible and credible resolution strategies and the financial authorities need to have the necessary resolution powers, and the capacity to apply them. The UK’s permanent resolution regime was put in place in 2009 and has been enhanced subsequently, including through the Banking Recovery and Resolution Directive.

The approach document sets out three key stages of resolution which firms would go through. These are:

• Stabilisation phase: Once a firm has entered resolution, the Bank must decide on the most appropriate method to stabilise the firm. This may be through transferring some of its business to a third party or through bail-in to recapitalise the failed firm;

• Restructuring phase: Once the firm has been stabilised, it will need to restructure to address the causes of failure and restore confidence; and

• Exit from resolution: This is the end of the Bank’s involvement with a firm in resolution – either the firm will cease to exist or they will be restructured and no longer require liquidity support.
Commenting on the publication, Andrew Gracie, Executive Director of Resolution, Bank of England said:

“This is a significant milestone in our resolution regime. It sets out exactly how we would go about resolving a bank, building society or investment firm in practice. The failure of these firms should have the same impact as that of the failure of any other institution i.e. the rest of the system is not impacted and taxpayers do not bear the cost. This is what resolution achieves.”

Equity Research Hire at Cantor Fitzgerald Europe
BankingTransactional and Investment Banking

Equity Research Hire at Cantor Fitzgerald Europe

Cantor Fitzgerald Europe (“CFE”), a leading global financial services firm, has announced the appointment of Jonathan Richards as an equity research analyst on the Financial Institutions team. Richards will be focused on covering listed asset and wealth managers within the firm’s growing Research department.

Gordon Neilly, Co-Chief Executive Officer of CFE, commented, “I would like to welcome Jonathan to the rapidly expanding CFE team. His appointment complements a core sector team for our business, and underscores our commitment to growing our financials research coverage alongside our corporate offering. We expect his depth of knowledge and breadth of contacts will add immediate value to the research team.”

“The addition of seasoned professionals like Jonathan demonstrates our unwavering commitment to providing exceptional service to support the evolving needs of our clients and to strengthening our research and banking franchise. We are continuing to see opportunities to gain market share by making strategic hires and enhancing our service offering across specialist industry sectors,” said Shawn Matthews, Chief Executive Officer of Cantor Fitzgerald & Co.

Richards joins CFE from Bank of America Merrill Lynch where he covered UK and European diversified financials and was the primary analyst on a number of stocks. Whilst at BOAML, he was highly-ranked in both the Institutional Investor and Extel surveys. Prior to Merrill Lynch, Richards covered the diversified financials space at UBS in London. He began his career at Lehman Brothers covering FIG companies in the Investment Banking vertical. Richards has a Bachelor’s Degree in Economics from Columbia University.

Headquartered in London, Cantor Fitzgerald Europe is an integrated mid-market investment bank offering clients corporate finance and corporate broking services, together with institutional cash equities, fixed income, equity derivatives and foreign exchange products. CFE advises some 70 corporate clients and makes markets in over 700 companies and investment trusts. CFE is 100% owned by US-based Cantor Fitzgerald.

US and UK Officials Discuss Resolution of a Global Systemically Important Bank
BankingTransactional and Investment Banking

US and UK Officials Discuss Resolution of a Global Systemically Important Bank

The heads of the Treasuries and leading financial regulatory bodies in the United States and United Kingdom today participated in an exercise designed to further the understanding, communication, and cooperation between U.S. and U.K. authorities in the event of the failure and resolution of a global systemically important bank, or G-SIB.

The event was hosted by Federal Deposit Insurance Corporation Chairman Martin Gruenberg.

Additional participants from the United States were Treasury Secretary Jacob J. Lew, Board of Governors of the Federal Reserve System Chair Janet Yellen, Comptroller of the Currency Thomas Curry, U.S. Securities and Exchange Commission Chair Mary Jo White, U.S. Commodity Futures Trading Commission Chairman Timothy Massad, Federal Deposit Insurance Corporation Vice Chairman Thomas Hoenig, Federal Deposit Insurance Corporation Board Member Jeremiah Norton, Federal Reserve Board Governor Daniel Tarullo, Federal Reserve Bank of New York President William Dudley, and Deputy Treasury Secretary Sarah Bloom Raskin.

Participants from the United Kingdom were Chancellor of the Exchequer George Osborne, Bank of England Governor Mark Carney, Deputy Governor for Financial Stability Sir Jon Cunliffe, Deputy Governor for Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority Andrew Bailey, Deputy Governor for Markets & Banking Minouche Shafik; and Financial Conduct Authority Chief Executive Martin Wheatley.

The exercise’s high level discussion furthered understanding among these principals regarding G-SIB resolution strategies under U.S. and U.K. resolution regimes, aspects of those strategies requiring coordination between U.S. and U.K. authorities, and key challenges to the successful resolution of U.S. and U.K. G-SIBs. This exercise builds on prior bilateral work between U.S. and U.K. authorities, which, since late 2012, has included the publication of a joint paper on G-SIB resolution, participation in detailed simulation exercises for G-SIB resolution, and participation in other joint G-SIB resolution planning efforts.

The exercise demonstrates the continued commitment of the United States and the United Kingdom since the financial crisis to promote a safer and sounder financial system by cooperating to address issues involved in the orderly resolution of large and complex financial institutions without cost to taxpayers. Both countries reiterated their commitment to the Financial Stability Board’s ongoing work concerning G-SIB resolution. The exercise was timed to coincide with the IMF annual meeting.

Bank of England Proposes Financial System Reform
BankingTransactional and Investment Banking

Bank of England Proposes Financial System Reform

The Bank of England has today published four papers that propose changes to improve the resilience and resolvability of deposit-takers and reduce the disruption to customers and the system if a deposit-taker or insurer fails.

Following recommendations made by the Independent Commission on Banking, the Government introduced legislation to allow for ring-fencing of core banking services in the UK from activities associated with trading and financial interconnectedness. These changes are intended to ensure that ring-fenced banks, and groups containing ring-fenced banks, can be resolved in an orderly manner with minimal disruption to the provision of core services.

From 1 January 2019, banks with core deposits greater than £25 billion (broadly those from individuals and small businesses) will be required to ring-fence their core activities. To prepare for this, the Prudential Regulation Authority (PRA) is consulting on three areas of ringfencing policy: the legal structure of banking groups; governance; and continuity of services and facilities.

All banks that expect to reach the threshold for being subject to ring-fencing requirements by 2019 must submit a preliminary plan of their anticipated legal and operating structures to the PRA by 31 December 2014.

The PRA is also consulting on changes to enhance depositor and insurance policyholder protection.

For depositors, the proposed changes implement the requirements for deposit-takers under the European Deposit Guarantee Schemes Directive, as well as proposing new rules which would allow customers to continuously access the deposits covered by the Financial Services Compensation Scheme (FSCS) if their deposit-taker fails. The proposals aim to provide a mechanism to transfer accounts to another financial institution in the event of a deposit-taker’s failure or enable faster pay-out of compensation. The proposals also introduce additional FSCS coverage for deposits that are temporarily higher than the £85,000 compensation limit, e.g. house purchase or personal injury compensation.

For insurance policyholders, the PRA is proposing changes to the insurance limits for FSCS compensation to increase protection for policyholders in the event of an insurer failing. This would increase the limit to 100% of cover for annuities, pure protection, claims arising from death or incapacity and professional indemnity insurance. This reflects the potential for significant adverse consequences to policyholders, and the wider financial system, of cover being disrupted. The limits for all other types of insurance remain the same.

The PRA is also publishing a discussion paper on operational continuity in resolution. These proposals will help ensure deposit-takers make the appropriate changes to enable critical functions to operate effectively at all times, even if the deposit-taker fails.

Andrew Bailey, Deputy Governor of the Bank of England and Chief Executive of the Prudential Regulation Authority said
“Improving the resilience and resolvability of firms has been at the heart of international and domestic reforms since the financial crisis. Ring-fencing will improve banks’ resilience, by protecting them from shocks, and facilitate orderly resolution – both of which are needed for a stable financial system.

“These proposals will allow customers to have continuous access to the money in their bank account – or receive payment from the FSCS if this is not possible. Additionally, the increase in FSCS limits for certain types of insurance will mean policyholders who may find it difficult to obtain alternative cover, or who are locked into a product, have greater protection if their insurer fails. ”

ECB Running Out of Options but Remains Cagey on ABS Programme Details
BankingTransactional and Investment Banking

ECB Running Out of Options but Remains Cagey on ABS Programme Details

The European Central Bank (ECB) voted to leave rates unchanged today, as expected. The main borrowing rate remains at 0.05%, while the deposit rate stands at -0.2% and the marginal lending facility at 0.3%. ECB President Mario Draghi also gave details of the asset-backed securities purchase programme announced last month, saying that it could include Greek and Cypriot securities but refusing to give an estimate of its planned size.

The pressure on the ECB shows no sign of abating. The Eurozone unemployment rate for August, released this week, stayed at 11.5%, little down from its all-time high of 12.0%. The same day we learnt consumer price inflation dropped from 0.4% to 0.3%. Part of this is due to the large fall in energy costs, but core inflation – which strips out this source of volatility – also fell from 0.9% to 0.8%, demonstrating the weakness of demand. The ECB is meeting in Naples today, after Italian youth unemployment rose to a record 44.2%. Anger at the ECB burst out into the streets, with protestors criticising the bank and the austerity policies which have come to be associated with it. European stock markets fell this morning, with other major markets following.

Reflecting this mood, Draghi yesterday compared the ECB’s task to that of Hercules, using the metaphor of the many-headed Hydra which grew two new heads each time one was cut off. Weak growth and low-flation – which threatens to turn into deflation – has replaced the sovereign debt crisis of 2010-12 as the main economic danger.

The ECB is increasingly powerless to tackle these new threats: it has already lowered rates beyond what was thought possible, launched long-term refinancing operations and announced an asset-backed securities purchase programme. The implemented measures have yet to strengthen demand and many think the ABS programme will not be enough. Its only remaining option is full quantitative easing through sovereign bond-buying, something that will be resisted by the Bundesbank for as long as possible. The aggregate demand deficiency also suggests a role for fiscal policy – hence today’s anti-austerity protests – yet that remains entirely beyond the ECB’s remit.

This did not stop Draghi from mentioning fiscal policy, though he reiterated that member states needed to stick to the EU’s stability and growth pact. Cebr’s view remains that full quantitative easing is necessary (although probably not sufficient) to raise the growth rate. But we expect that the ECB will delay for some months before introducing such a policy.

Royal London Asset Management Expands Marketing Team
BankingCash Management

Royal London Asset Management Expands Marketing Team

Royal London Asset Management announces the appointments of Caroline Henty and Joanna Wells as Marketing Managers for its Asset Management business (RLAM).

Caroline Henty joined RLAM from Schroder Investment Management and will focus on the further development of RLAM’s institutional segments, following her most recent role as Marketing Specialist in the UK Institutional and Property areas.

Joanna Wells, due to start in October, will continue to build on the wholesale success RLAM has experienced this year. She brings a strong understanding of intermediary markets from her previous role as Marketing Manager at Jupiter.

Commenting on the appointments, Tracy Fennell, Head of Marketing for RLAM, said: “I am delighted that we have attracted talent such as Caroline and Joanna who are joining during such an exciting time for RLAM. RLAM’s recent performance has been particularly strong and the further expansion of the marketing team shows our ongoing commitment to supporting the growth of both our wholesale and institutional client bases.”

Halcyon Names Co-Heads of London Office
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Halcyon Names Co-Heads of London Office

Halcyon Asset Management LLC, a leading investment manager which with its affiliates (collectively “Halcyon”) has more than $12.5 billion in assets under management, today announced significant developments with respect to the management of its London office and European capabilities. The firm named Daniele Benatoff, who has been with Halcyon since May and focuses on European mergers and special situation strategies, Co-Head of Halcyon Asset Management (UK) LLP, along with Co-Head Damien Miller, who will focus on European credit and will join the firm by year-end. Additionally, the two Co-Heads will be among the portfolio managers for Halcyon funds dedicated to investing in European opportunities.

David Snyder, already a Managing Principal and Portfolio Manager of Halcyon Loan Management LLC, will continue leading Halcyon’s European CLO efforts and bank loan strategies as Head of Halcyon Loan Advisors (UK) LLP, a subsidiary of HLM and manager for Halcyon’s CLO 2.0 European offerings.

Prior to joining Halcyon, Mr. Benatoff co-founded Benros Capital Partners LLP in London, an event-driven hedge fund where he served as CEO and Head of Research from 2011 to 2013. Previously, he worked at Goldman Sachs International in London as Executive Director of Goldman Sachs Principal Strategies (GSPS) from 2004 to 2011.

Mr. Miller was most recently a Managing Director and Global Head of Special Situations at Alcentra, beginning in 2007, where he built out the firm’s distressed and opportunistic credit investment business and acted as Portfolio Manager. He was previously a Director and Portfolio Manager for the Special Situations Group at Barclays Capital in New York.

“Both Daniele and Damien are extremely talented investors whom we have been watching for a long time,” said John Bader, Halcyon’s Chairman. “They are uniquely well-equipped to represent us in Europe, and we are delighted that they have both decided to join us and serve as Co-Heads of Halcyon Asset Management (UK) LLP.”

Benatoff said, “I’ve known the Halcyon team personally and professionally for years, and it is an honor to join its ranks. At Halcyon, Damien and I have a tremendous platform that will allow us to source interesting investment opportunities in Europe for years to come.”

“I couldn’t be more excited about this opportunity.” Miller said. “I’m absolutely delighted to be joining old friends and such a highly regarded global asset manager. I believe that, together with Halcyon’s deep bench, Daniele and I will make a formidable team in Europe.”

Acquisition and Staff Hire at Guggenheim Securities
BankingTransactional and Investment Banking

Acquisition and Staff Hire at Guggenheim Securities

Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners, has announced the execution of a definitive purchase agreement to acquire the London operations of Lazard Capital Markets (LCM), expanding the firm’s international presence. Consummation of the transaction is subject to approval by the Financial Conduct Authority.

The acquisition, upon approval, would allow Guggenheim to conduct a range of sales and trading operations, with an initial focus on European corporate and sovereign debt and US and foreign equities.

Guggenheim plans to operate the business under the new name of Guggenheim Securities International Ltd.
“We are excited to have the opportunity to extend Guggenheim’s products and services to clients in Europe,” said Alan Schwartz, Executive Chairman of Guggenheim Partners and CEO of Guggenheim Securities. “At a time when many European clients are looking to restructure and find funding in the capital markets, we believe that the client-focus partnership model that has served us so well in building our business in the United States will allow us to extend our growth throughout Europe, and this is an important step toward that.”

As part of the acquisition, Guggenheim is welcoming LCM’s team of 10 professionals, led by Duncan Riefler, who ran the LCM London office. He will report to Ronald Iervolino, Senior Managing Director and Head of Fixed Income, based in New York.

“My colleagues and I are looking forward to joining the Guggenheim team and providing the same world-class client service in Europe that has long been the firm’s hallmark in the rest of the world,” Riefler said.

Joining Riefler from LCM are David Corney, Phillip Bloch, Jay Larkin, Nannette Bax-Stevens, Piero Greco, Samir Patel and Alison Kilsby. In addition, Dennis McKenna and Tomas Mannion will also be joining the platform in high-yield trading and research roles, respectively, marking the start of the growth commitment from Guggenheim.

Before joining LCM, Riefler was a co-founder and partner of Sonas Partners in London, an independent brokerage focused on trading fixed-income securities. Prior to that, he had a 19-year career at Merrill Lynch with a number of roles within fixed income in New York and London. He holds a BA from Denison University.

BoJ Purchases One-year Government Debts at Negative Yield
BankingTransactional and Investment Banking

BoJ Purchases One-year Government Debts at Negative Yield

Courtesy of Shutterstock

The first time the BoJ has taken such action, it demonstrates the conviction of the bank to hit its 2% inflation target by expanding the country’s monetary base.

The action follows a further first-time move by the bank last week, where it bought three- and six-month bills at a negative yield – ensuring that when redeemed the bills will make a loss.

Friday’s purchase however, which has not been confirmed by Japan’s central bank but said to be ‘highly likely’ by traders in the country, is the first time it has ventured into one-year bills.

It further underpins the bank’s decision to stalk a doubling of its base money to Y270tn ($2.5tn) by the end of this year.

The Introduction of QQE

Introducing a new ‘quantitative and qualitative easing’ (QQE) regime, the announcement has seen borrowing costs in Japan fall to record levels.

Core consumer price inflation has since risen to 1.5% – a six-year high whilst the consumer price index has levelled out at 1.3%,

There are fears that buying the bills at a negative yield will increase concerns that the BoJ is simply propping up a wasteful government. This financial year, Japan’s government is set to spend around two times the value that it will take in tax receipts.

Scottish Referendum Vote Heats Up
BankingCash Management

Scottish Referendum Vote Heats Up

On 18 September people residing in Scotland, or those who are registered to vote in the country but are living overseas, go to the polls to decide whether to leave the Rest of the UK (RUK). With the latest opinion polls split on the outcome of the vote, businesses, leaders and newspapers are all starting to ramp up their campaigning.

Heartbroken

Yesterday, the three leaders of the UK’s major parties and around 100 other Parliamentary staff descended on Scotland to make a passionate please for a ‘No’ vote. With the clear message that Scotland will be better if stays as part of the Union, Prime Minister David Cameron said that a ‘Yes’ vote would leave him:

“heartbroken”

The PM’s sentiments were echoed by Labour leader Ed Miliband who said that staying as part of the RUK was a case for the:

“head, heart and soul”.

Meanwhile, Liberal Democrats leader Nick Clegg was on a visit to his party’s traditional Scottish heartland of Selkirk. Heckled at length by many in the crowd, with shouts of ‘You’re a liar”, Mr Clegg said:

“This is a momentous event which will affect everybody north and south of the border forever.”

All three leaders and other key figures in the ‘Better Together’ campaign also insisted that party politics was not the issue, urging voters not to throw away centuries of successful union.

Leaders ‘cannot be trusted’

However, the Scottish First Minister, Alex Salmond, urged Scottish voters not to be swayed, saying that the leaders could not be trusted. Also taking to the campaign in response to the Westminster descent on Scotland, Mr Salmond said that they were more worried about losing their jobs.

Clearly wanting to politicise the vote despite the protestations of Cameron, Clegg, Miliband et al, Mr Salmond said:

“Today what we have got is an example of Team Scotland against Team Westminster.”

Split Decision

The Referendum atmosphere has been further ramped up by the showings in the polls.

Over the last few months, most polls have been showing a relatively comfortable victory of the ‘No’ campaign. However, at the weekend, two significant polls showed the ‘Yes’ campaign moving ahead.

Meanwhile, a new opinion poll commissioned by Scottish Newspaper The Daily Record, showed that:

  • 47.6% of voters back a ‘No’ vote, meaning that Scotland will stay as part of the union
  • 42.4% backed a ‘Yes’ vote for independence
  • 10% were still undecided

 

It is that key 10% of indecisive voters that the campaign will now be targeting, with less than seven dates before votes are cast.

Newspapers Take Their Stance

Thursday also saw a number of newspapers in Britain pin their colours to the mast.

The influential newspaper The Scotsman came down on the side of the ‘No’ vote. Under its headline, ‘Scotland’s Decision’ the newspaper declared:

“With exactly a week to go before our historic referendum

The Scotsman gives its verdict on the choice before us: we are better together.”

It then laid out its reasons in a 2,000-word editorial article.

The FT meanwhile took much the same stance. With its editorial claiming:

“the case for union is overwhelming”

Meanwhile rumours are rife that News Corp’s executive chairman Rupert Murdoch is getting ready to declare his backing for a ‘Yes’ vote. Tweeting at the weekend, The Australian media magnate said that it would be a ‘black eye’ for British politics.

Long-time friends, it is not the first time Mr Murdoch has shown his support for Mr Salmond however. Back in 2012 he also took to Twitter to claim his opinion that Alex Salmond was the best politician in UK.

Businesses Take Their Stance

British businesses too are starting to get louder with their opinions.

Already there have been open letters from businesses and business groups coming down on either side of the argument. Today though, the battleground was further widened.

The Royal Bank of Scotland this morning confirmed that, in the event of a Scottish vote for independence, it would be necessary to re-domicile the firm to London. However, in a letter to employees, the bank insisted that this would not mean a closure of Scottish operations or job losses.

Conversely, the manager of Scotland’s largest fund said that independence would be a good venture for Scotland. Martin Gilbert, the boss of Aberdeen Asset Management said:

“I think an independent Scotland would be a big success,

but it is a secret ballot and I will abide by that.”

Meanwhile, major retail chain the John Lewis Partnership said that it may be forced to increase profits in its John Lewis department stores and its Waitrose grocery outlets.

The Institute for Fiscal Studies also issued a warning to voters, claiming that the NHS in Scotland would get less cash overall should it go independent.

With differing opinions across the board, a growing recognition of the debate across the world, the next week will be one of major upheaval for UK politics.

BankingCash Management

CBI to Launch Campaign to Restore Trust in UK Businesses

The Confederation of British Industry (CBI) is launching a new campaign in an attempt to restore confidence levels in British businesses.

It is the first time that the CBI, Britain’s largest lobbying group for business, has launched such a campaign, and comes as scandals from major firms and banks have generated much traction in the traditional press and online.

The Great Business Debate will see a number of events take place throughout the country to try and reverse the trend of unfavourable perceptions that such scandals have left many in Britain feeling.

The campaign’s main focus will be to showcase just how business is a force for good in the country. Surveys completed by the lobby group have revealed that only a fraction of people living in the UK believe this the case.

The debate will attempt to extol the virtue of firms in regards to contributing to the country with tax, creating employment and bettering people through training and skill development.

As well as taking the campaign on the road, a major battle field for the initiative will be online. The social sphere will certainly be well-exploited by the |CBI, as it tries to tap into the work already being done to create personal relationships by many leading firms.

Many of the biggest names in business will take part in the drive. Already announced by the CBI are Barclays boss Antony Jenkins, E.ON CEO Tony Cocker and Ruby McGregor-Smith, the head of group Mitie Group.

The CBI is also eager to not just broadcast how business is good for the country. It has stated that it will also listen to and take action on any concerns which are raised.

BankingCash Management

Bank of Cyprus Confirms Placing of Retail Offer

The move is part of the national bank’s €1 billion share capital increase drive, while it is understood that the new ordinary shares will be offered as subscription to Existing Shareholders.

In an announcement released by the bank, the placing has been filed with the Department of the Registrar of Companies and Official Receiver. The filing follows the approval by the District Court of Nicosia for a reduction in the nominal ordinary share value.

The statement read:

“With the filing and registration of the court order with the Department of the Registrar of Companies and Official Receiver today, all conditions precedent to the closing of the Placing and Open Offer have been satisfied and, accordingly, the Bank is pleased to announce that the Closing Date for the Placing and the Open Offer will be 18 September 2014 and that it is arranging for the despatch of Placing Confirmations and Open Offer Confirmations,”

The bank also noted that, after closing, the retail offer to existing shareholders will be at a subscription price of €0.24 per unit.

Eurozone Growth Slams to a Halt
BankingCash Management

Eurozone Growth Slams to a Halt

 

Eurostat figures have shown a 0.0% growth, with both Germany and France, the biggest economies in the zone, performing far below expectations.

There was worse news for Italy, the third largest economy, as it fell back into recession.

Meanwhile, the annual inflation rate in Europe slumped to just 0.4% for July – the lowest the rate has been for five years.

Combined, the figures are pointing not at an economy in recovery but at an economy in decline.

There are now growing fears as to how far reaching the sanctions imposed on and by Russia will have for the second half of the year.

In particular, there are fears over the future for France and, though the German economy is facing a challenging environment too, it is thought to be much more robust than the French economy.

Many economists are likely to now ramp up the pressure on the European Central Bank to introduce a round of quantitative easing. Many other central banks, including The Bank of England, have taken such action.

There was better news from Portugal and Spain however, with both countries on the Iberian Peninsula seeing a 0.6% growth.

Report Reveals Independent Scots Want to Keep the Pound
BankingCash Management

Report Reveals Independent Scots Want to Keep the Pound

According to the Scottish Social Attitudes survey, 68% of Scots would prefer to see an agreement in place with the rest of the UK to keep using sterling. Fourteen percent opted for using a new currency.

The ScotCen Social Research survey also found that the appetite for independence had increased compared to last year’s findings.

A co-director for the survey, Research Consultant John Curtice, said:

“Support for independence has only increased because those who are convinced it would be beneficial for Scotland are more willing to put their cross in the Yes box.”

Financially Worse Off

The report also found that there was more independence uncertainty amongst women living in Scotland.

According to the research, based on opinions captured between May and June of this year, 73% were unsure what it would bring. Sixty-three percent of men were likewise unsure.

The most devastating blow for the ‘Yes’ campaign however came over fears of an independent economy. Last year, 29% thought they would be worse of. This year suggests 39% of people have such worries.

A further 39% did not feel it would affect their personal wealth. Just 10% thought their personal finances would be ‘a little’ or ‘a lot’ better off.

In regards to the overall economy 44% thought an independent Scotland would be less wealthy, a ten point increase from last year.

Very Likely to Vote

The timing of the research means that opinions were taken ahead of the live television debate between Scotland’s First Minister Alex Salmond and the Better Together chief Alistair Darling.

However, they were taken after Chancellor George Osborne and other senior politicians ruled out a pound share agreement.

This year’s report also found that 74% of Scots are preparing to go to the polls on September 18. This is an increase of 13% from 2013’s results. The findings also reported:

• 25% would vote Yes (up from 20%
• 43% would vote No
• 29% were undecided
• 68% wanted a currency union
• 14% backed a new currency
• 6% wanted the euro as Scotland’s new currency

The report also suggested that just 8% of people would support continued use of the pound without a union with the rest of the UK. Four percent said they were undecided.

Bank of England Maintains Interest Rates at Record Low
BankingCash Management

Bank of England Maintains Interest Rates at Record Low

The interest rates have been at the record level for five years, but, there was some expectation that the rates could start to rise after Bank Governor Mark Carney hinted at such in June.

Recent figures have suggested growth in many UK sectors, with the service sector having a continued and robust recovery. However, there are concerns that the rate of growth in manufacturing has slowed, with data showing a small increase of 0.3% in June, smaller than expected, after it fell by 1.3% May.

The decision was taken by the Bank of England’s Monetary Policy Committee (MPC). The minutes of the meeting outlining their decision will not be presented publically until August 20.

The minutes of the July meeting of the MPC showed that all nine members voted to maintain the status quo. There was concern regards the economic situation overseas and the level of exports accordingly, with the committee also saying:

“(while) employment had continued to increase robustly… wage growth had been surprisingly weak”.

If the minutes of the latest meeting reveal that some members voted for a rise, it will be the first split decision in over three years.

Though Mr Carney had hinted at a rise, most economists had been forecasting that an interest rate increase would not be seen before the first quarter of next year.

The Bank also revealed that its quantitative easing programme would also remain unchanged at £375bn.

Active Venture Partners Appoints Two Key Team Members
BankingTransactional and Investment Banking

Active Venture Partners Appoints Two Key Team Members

Active Venture Partners has announced the appointment of two new team members with strong entrepreneurial and venture capital experience. Active has doubled its team from five to 10 team members in the last three years and is one of Europe’s fastest-growing venture capital firms. Sebastian Blum joins as partner coming from previous senior roles in Silicon Valley’s mobile technology and VC market while Georg Stockinger takes up his role as venture advisor bringing large-scale digital business expertise to the firm. Common to both is a strong commitment to extending Active’s game-changing approach based on active value building and operational support for its portfolio companies which is setting the company apart from traditional venture capital fund managers.

Building on its success in the mobile startup community, Active has appointed Sebastian Blum from his previous position as VP of business development at California-based photo viewing app developer Cooliris, where he was responsible for corporate & business development and partnerships with special focus on Asia. Previously he was in senior positions at T-Venture, the VC arm of Deutsche Telekom, and most recently as the managing director of its San Francisco office where he drove investments in mobile start-ups throughout Europe and the US. Blum will expand Active’s representation in Berlin and other German-speaking startup hubs.

“There had to be a compelling reason for me to return from the US to Europe, and I found it in Active,” said Blum. “This is such an exciting opportunity; to work with a phenomenal and passionate team of entrepreneurially-minded professionals dedicated to helping other entrepreneurs succeed. I fully embrace the enlightened, fresh and disruptive approach that Active brings to venture capital in Europe, with a true focus on the people inside startups supporting them to realise their ambitions.”

Georg Stockinger brings experience in helping large-scale digital businesses in Europe and Latin America to grow their operations and internationalisation efforts. He was managing director at Rocket Internet LatAm, which has helped to launch and support companies such as Groupon, eDarling and Zalando. Previously, he gained experience in management consulting with McKinsey & Company and was part of the founding team of the German e-commerce start-up Casacanda, which was successfully exited. Stockinger has collected significant investment experience by being active as a private investor in digital businesses based in Germany, Spain, the UK, Mexico and Colombia.

Commenting on his new role at Active, Stockinger, said: “Active has strongly held values relating to the long-term development of people and naturally diverse teams, and I share these. It is offering much more to its portfolio companies than simply capital and to enable this, it employs experts who can advise on a wide range of skills from marketing and strategy through to internationalisation and operational excellence. We are developing a unique support platform and my role is to ensure it is successfully used across our portfolio.”

Like all team members at Active, both Blum and Stockinger bring many additional skills to their roles. They both have international business experience and networks and speak a variety of different languages.

“Sebastian and Georg add immensely to the rich diversity of the Active team that is now composed of seven nationalities and speaks 10 languages,” said Christopher Pommerening, founding partner at Active Venture Partners.

“They are committed to helping us to challenge and change our traditional sector through our new approach to venture capital. They bring their experience and networks from the US, Latin America and Asia to our portfolio entrepreneurs and can add great value through their operational start-up expertise. Sebastian and Georg will greatly enhance our support and partnership with the entrepreneurial teams that work with us.”

Abingworth Promotes Ken Haas and Vin Miles to Partners
BankingTransactional and Investment Banking

Abingworth Promotes Ken Haas and Vin Miles to Partners

Abingworth, the international investment group dedicated to life sciences and healthcare, has announced the promotions of Ken Haas and Vin Miles to partners. They are both based in the US where they source and manage deals including early-stage and late-stage venture capital, venture growth and public market investments as well as VIPEs (venture investments in public equities).

Haas has spent 25 years in the management of both early-stage and public high technology and biotechnology companies. As part of the Abingworth team, Ken has led several investments including Clovis Oncology, Gynesonics and Intellikine. Before joining Abingworth, he was part of the founding management team at IntelliGenetics, one of the world’s first bioinformatics companies and was CEO of IntelliCorp, a publicly-traded enterprise software company. Haas joined Abingworth in 2004 and is based in the group’s Menlo Park, California office.

Miles has more than 30 years of management experience in the biotech industry. He is currently on the boards of Chiasma, Dicerna, Hydra BioSciences and Magellan Bioscience. Before joining Abingworth in 2007, he was senior vice president, business development, of the Abingworth portfolio company Alnylam Pharmaceuticals. Previously, Miles was at Millennium Pharmaceuticals, where he held VP positions in business development, strategic planning and corporate communications. Miles is based in the group’s Boston, Massachusetts office.

“We are pleased to announce the promotions of Ken and Vin,” said Stephen Bunting, managing partner. “They both have extensive operating experience and have made significant contributions to our portfolio companies from our Menlo Park and Boston offices.”

Evidence Growing of Shifts in Banking Behaviour
BankingTransactional and Investment Banking

Evidence Growing of Shifts in Banking Behaviour

The Q2 John Gilbert Financial Research (JGFR) Banking Barometer finds 83% of the adult population has a designated main financial services provider (MFSP, normally a high street bank), the lowest proportion since December 2007.

The drop in designated MFSPs may reflect the further growth of ‘commoditised’ financial services in the past year, as more people use online banking, accessed increasingly by smartphones and tablets.

More people may regard their personal current account akin to a payments utility, and less a product gateway, following pressure by government, industry regulators and consumer bodies, keen to break the dominant position of the high street banks and generate greater competition.

Among the near 44 million people with a designated MFSP, the top ten brands have an 83% share of consumers, down from 85% in Q1 and 86% in Q2 2013. With the separation of TSB from Lloyds Bank brand, the latter has been replaced in the past 2 quarters as the leading MFSP by Barclays. TSB has established a consistent 3.5% share in the past 2 quarters.

Overall the Lloyds Banking Group has a 24% MFSP share, followed by RBS and Barclays (both 15%), HSBC (13%) and Santander (9%).

The challenger banks with current accounts have made little impact to date as MFSPs. Tesco Bank, M&S Bank, Virgin Money and the Post Office have just 1.1% market share combined.

Where there is strong competition is at a regional level and this is perhaps where new challenger brands, with branch networks may be better placed to succeed.

The focus on current accounts is because of its gateway to other financial products. The Q2 JGFR/GfK Financial Activity Barometer shows the demand across 18 categories of saving, investment and borrowing products; by cross-analysis with the customers of the respective MFSP brands the Barometer shows the importance of an active customer base on revenue generation.

Such activity will partly reflect the financial position of customers, with HSBC and Nationwide having the greatest proportions of customer households currently saving. By contrast the newly floated TSB has a less active customer base and will need to recruit more financially active customers.

Among key market segments, Barclays and HSBC compete strongly for the under 30’s; HSBC is leader among graduates, both in market share and as a proportion of its customer base (48%). Not surprisingly it is leader among higher earners (£50,000+).

Barclays is the market leader among the over 50s, retired and among outright owners. By intending product activity, in the competitive, yet attractive revenue producing mortgage and credit card markets, Barclays is market leader. Halifax is leader in the personal loan market and has the highest proportion of customers intending borrowing by credit card.

Research for the 2014 JGFR/ComPeer Financial DIY Report highlights the growing debate surrounding the onset of digital banking. The majority of people use an omni (mix) of channel approach with online dominating. Around 4 in 10 cite visiting a branch, well down on over a half two years ago. There is still a people factor in financial services with around 1 in 5 citing the use of a named relationship manager / adviser.

With more challenger banks offering current accounts and becoming potential MFSP’s, the Q2 Banking Barometer asked about the relative attraction of branch-based and digital banks. There would appear an appetite for change among the public in banking arrangements. Some 22 million adults (42% of the population) responded positively to new branch-based banks rather than a digital bank, which is likely to be more niche in its appeal. Interestingly students (52%) are among the most supportive segment of the statement. For many people there would seem to be the need for a human face to a digital bank.

For a minority of the public (14%) access to finance through a Visa / Mastercard or PayPal account is more important than a bank account. This figure has changed little in the past 3 years.

With increasing focus on the role of corporate and social responsibility among businesses, branch based banks are viewed by the public as having a much greater social and community impact. An example is firstdirect. The bank scores very highly in surveys surrounding its customer focus, but is well behind (8%) the major branch based banks (19% – 49%) in how customers view its social and community presence.

Overall 28% of the public believed their MFSP to be very involved in charitable and socially responsible activities, with the leading MFSP brands falling into two divisions; a Premier Division with brands taking over 35% support and a second division with below average levels.

“There is great change taking place in the current account market as a combination of technology, competition and regulation bring about greater switching opportunities. The major high street brands will do well to maintain their MFSP market shares in the face of growing commoditisation of the current account market. The attraction of new branch based organisations with a regional aspect, and prepared to support local communities and be socially responsible, may well be the preferred model of the public.”

Time for Asset Managers to Shine
BankingTransactional and Investment Banking

Time for Asset Managers to Shine

Opportunities abound for the global asset management industry as the shrinking of the banking sector has thrust asset management to the heart of global capital flows and the pace of regulatory change is starting to ease off, according to a new KPMG report.

KPMG’s Evolving Investment Management Regulation report highlights that the regulatory uncertainty of the past years has settled down and predicts that 2014 is the year the wheel turns, with the sector now entering the implementation phase of regulation with much greater clarity.

Tom Brown, global head of investment management at KPMG, said: “It is indeed the ‘age of asset management’. The industry has come through the financial crisis well and is now operating in a much more stable regulatory environment with greater clarity and certainty. The next five to ten years hold enormous potential for asset managers and I expect to see players introduce innovative products and adopt new strategies as the industry plays its role in the broader savings debate.

“Regulators have followed through on their promise to restrict trading and private funds within banks, which has led to trillions of assets being spun off. As talented traders have less access to bank balance sheets, we will increasingly see them migrate toward the asset management continuum, which is another positive for the industry.

“While there is enormous opportunity, the industry is also likely to come under more intense scrutiny as firms are increasingly considered systemically important institutions. With so many activities previously housed in banks moving over to asset management it is inconceivable that the industry will not be closely monitored.”

The report examines the key regulatory challenges to face investment managers in the future, discussing shadow banking and the call for additional data and reporting requirements to improve transparency.

Traders’ World Cup Kicks Off
BankingTransactional and Investment Banking

Traders’ World Cup Kicks Off

The competition will be based on the official World Cup tournament’s groups. The winning country for each match will be determined by metrics such as the relative strengths of GDP growth, currencies, equities, inflation, unemployment, commodities and other macro data. The metric for each game will be drawn at random on the morning of the match. The two countries that emerge from each group in the pool round will be those with the best performance, according to our market/financial metrics.

For instance, the US is due to play Portugal in Group G. If the selected metric is FX, the winner will be determined by the performance of the euro vs. dollar on the day of the match. Traders might favour the dollar given its quiet comeback since the spring, but equally market volatility might give the euro an unexpected edge. In a similar way, other outcomes will be judged on the best equity market performance, or the average return of two key exporting goods such as cotton or crude oil.

The competition is open to all through the TradingFloor.com platform, Saxo Bank’s proprietary social trading platform which allows users from around the world to share their trading strategies and performance across a broad range of asset classes. Participants simply need to register and name their chosen winner from the 32 countries to be eligible for the prize.

A dedicated webpage will provide interactive tables and scores as well as serving as a forum through which participants can debate the match outcomes.

Steen Jakobsen, Chief Economist & CIO at Saxo Bank, said: “There are manifold similarities between playing the markets and playing the beautiful game. Whilst Spain has dominated the sport since the last World Cup, its dominance in Brazil is by no means assured; the familiar investment disclaimer, “Past success is no guarantee for future success”, is equally true for football. Both the markets and competitive sport are subject to unforeseen, disruptive forces which make picking winners difficult to predict.

“Football continues to be the one game which can get us all excited. If politicians and policy makers had been active footballers, they would understand that football has all the solutions to the world’s economic problems: a strong team has a great defence, skills and individualism in midfield and a vanguard of clinical strikers.”