08 May

National Bank of Abu Dhabi Malaysia to close this year

National Bank of Abu Dhabi Malaysia to close this year
Source: The Edge Markets

NATIONAL Bank of Abu Dhabi Malaysia Bhd (NABD Malaysia) is expected to close its operations before the end of the year, sources say — a surprising move that comes barely six years since it was set up. The reason for the closure is not known but it is understood to be on the instruction of its Middle Eastern owner, First Abu Dhabi Bank PJSC (FADB).

“The bank is expected to close by June. It’s the head office’s decision to close the bank. We’re asking clients to close accounts,” an employee of NBAD Malaysia says when asked about the shutdown. The bank’s staff count at its sole office in Menara Maxis, Kuala Lumpur, has halved from around 40 last year, the person adds. FABD declined to comment when contacted by The Edge. NBAD Malaysia, which is led by CEO Susan Yuen, also declined to comment.

NBAD Malaysia, which reported a net loss of RM778,000 for the first nine months last year, formally opened on July 2, 2012, as a wholly-owned subsidiary of the National Bank of Abu Dhabi group (NBAD Group). In April last year, NBAD Group merged with rival First Gulf Bank to become the largest lender in the United Arab Emirates with total assets of over US$180 billion. The enlarged entity is now known as FADB. It is not known if FADB considered selling NBAD Malaysia’s operations prior to reaching the decision to close down. Industry sources, however, say a few Malaysian banks were approached to gauge their interest in acquiring some of NBAD Malaysia’s performing loans. “A sale of [NBAD Malaysia] could have attracted interest from banks looking to enter Malaysia. Now, it will likely have to return the licence to Bank Negara Malaysia,” an industry source observes.

According to another source, one of the reasons for the impending closure of NBAD Malaysia may be that its shareholders are not getting along, post-merger. Press reports from Abu Dhabi took note of the fact that the name change of the newly-merged entity to FADB last year had taken observers by surprise. Many had expected the merged entity to retain the NBAD name, given that it was the larger of the two banks.

According to a report by The National in April last year, 7 of the 12 senior management executives of the merged entity came from First Gulf Bank, with only four from NBAD Group. The chief executive and his deputy were also from First Gulf Bank.

18 Apr

Openbank extends Temenos deal to wealthtech

Santander’s digital banking subsidiary in Spain, Openbank, has extended its contract with banking tech provider Temenos to include the latter’s wealthtech offering. Openbank went through an enterprise-wide overhaul, including its technology. Temenos’ flagship T24 core banking solution was selected in autumn (Infosys’ Finacle lost out in the final, it is understood).

T24 supports retail and SME banking business lines at Openbank, and the bank will also now deploy Temenos’ WealthSuite, a suite of products that “allows for a significantly enhanced client engagement through advisors or self-service digital execution”, according to the vendor.

“Openbank is one of the first fully-fledged digital banks in the world, with its software, APIs and client transactions running in the cloud, offering a complete range of banking and investment products through its digital platform,” Temenos says. Having gained over one million customers and over €6 billion in deposits in its home market of Spain, Openbank is now expanding to Latin America, starting with Argentina.

According to local publication Ristretto, the bank’s head in Argentina will be Federico Procaccini, CEO of Google Argentina and one of the country’s most well-known techies. Proccchini doesn’t have experience in the banking sector (his background is mainly in retail), but neither does Openbank’s CEO in Spain, Ezequiel Szafir Holman, who had worked at Amazon, McKinsey and Cortefiel, and joined Openbank in 2016.

18 Apr

Finastra ports mortgage services to the cloud with Microsoft Azure

Finastra ports mortgage services to the cloud with Microsoft Azure

Finastra is bringing its mortgage lending solutions to the cloud via Microsoft Azure. As part of the strategic alliance between the two companies to use Microsoft’s enterprise-ready, trusted cloud platform as a base for a selection of Finastra’s payments and retail banking technology, Finastra’s Fusion MortgagebotLOS product is now available via the Azure cloud. As of today, US clients that access this service will realize streamlined access to their data, improved operational control and increased productivity.

By accessing technology remotely via the cloud, financial institutions benefit from a flexible cost structure in which they can access only the resources required, and where system upgrades are rolled out immediately and automatically. Cloud technology also offers enhancements in availability, disaster recovery, environment / process monitoring, mobility and collaboration.

Finastra already uses the Azure cloud platform to deliver its payments solutions and more business lines will move to the cloud over the next 12 months. The addition of Fusion MortgagebotLOS to the cloud advances Finastra’s commitment to deliver the broadest portfolio of solutions for financial institutions of all sizes, on premises or in the cloud. Fusion MortgagebotPOS, which allows lenders to receive accurate, qualified mortgage applications through every point-of-sale channel, will be available on the Azure cloud in the coming months. The alliance between Finastra and Microsoft, announced in March, also serves to underpin Finastra’s FusionFabric.cloud open platform for innovation.

13 Mar

Grab Financial – Grab, Uber’s Southeast Asia rival, now offers micro-loans and other financial services

Grab, Uber’s Southeast Asia rival, now offers micro-loans and other financial services

GrabCar

Ride-hailing service Grab is being heavily linked with a deal to buy out Uber’s business in Southeast Asia, but those rumors aren’t stopping it from building its fintech platform after announced a financial services unit.

The Singapore-based company has been pushing itself into fintech for some time, with the most visible moment being the launch of its mobile payments service last November. Today, it extended that further still by introducing micro-loans and insurance options for Grab drivers and businesses that use its GrabPay services.

For its new offerings, Grab has teamed up with Credit Saison, a $3 billion firm that is Japan’s biggest lender with some 70 million credit cards in circulation, to create a joint venture called Grab Financial Services Asia. U.S.-based insurer Chubb has signed on as a partner.

In an interview with TechCrunch on the sidelines of the Money2020 event in Singapore, Jason Thompson, who is head of GrabPay, said the move is in line with Grab’s focus on enabling business and income in Southeast Asia.

“Today we’ve helped create about five million jobs [across Grab services], for those people to grow their businesses, we need to provide them with financial services. Whether that’s nano-loans for working capital, the ability to buy a car, actually without financial services we’re going to restrict the business growth of that whole ecosystem. That’s the reason we’re doing it,” he said.

Rather than pumping potential financial services customers with alerts via its app, Grab plans to take a community-driven approach and promote the availability of services using its driver events, its network of agents and other offline means.

Credit scoring is tricky in many emerging regions since a large proportion of people don’t own bank accounts or use them regularly. In Southeast Asia, KMPMG estimates that just 27 percent of the region’s 600 million population have a bank account. Grab plans to assess loan recipients and insurance candidates using a mixture of signals that could include their driving style, which Thompson said it can track using telemetrics from a driver’s device.

So while it wouldn’t be the lone criteria for scoring, a Grab driver’s driving style could play a part in assessing whether they receive a loan, Thompson explained.

Grab CEO Anthony Tan announces Grab Financial Services Asia

Grab is initially focused on serving business customers, but Thompson said that it may look to expand to cater to consumers further down the line. Already, he added, Grab has a loan book in excess of $700 million thanks to campaigns to provide car financing, insurance and more.

Grab’s serves eight countries in Southeast Asia but its financial services push has appeared to take an Indonesia-first approach. The country, Southeast Asia’s largest economy is where Grab acquired offline payment network Kudo in a deal that sources told TechCrunch could reach $100 million.

Thompson said Grab had “refocused” the Kudo business and used it to develop Grab’s relationship with SMEs and the driver community ahead of the introduction of financial services. He added, however, that all financial services from GrabPay will roll out across the region by the end of this year.

Grab may be a relatively new entrant to the payment space, but the company brings seriously clout. Valued at more than $6 billionwith investors like SoftBank, Indonesia’s Lippo Group and China’s Didi Chuxing in its corner, it’ll be interested to observe whether Grab can use its private sector and government relationships to build regional financial services in Southeast Asia where, to date, most competitors have focused on single markets or subsets of countries.

08 Mar

The Financial industry is shifting: Challenger bank Atom raises £149m

Atom Bank raises £149m

A UK-based digital bank Atom has raised £149 million in the latest funding round, including £85.4 million from its existing investor, BBVA.

BBVA now holds a 39% stake in Atom, and has so far invested £167 million into it.

BBVA states the move is a “sign of its confidence in both the business strategy and management team at Atom”. It’s worth noting that Atom’s founder and chairman, Anthony Thomson, has recently resigned.

“Atom is progressing extremely well and we continue to support the company,” states BBVA’s CEO, Carlos Torres Vila.

Since its inception in 2014, Atom, which focuses on savings and lending (it does not offer current accounts), has achieved:

  • attracted over £1.3 billion of savings deposits;
  • lent over £1.2 billion to SMEs and homeowners;
  • raised £400 million of equity capital, including from Toscafund Asset Management and Woodford Investment Management (in addition to BBVA);
  • established an international network of partners, including Deposit Solutions in Germany;
  • built a team of 310 employees.

Atom also claims to have the fastest account opening time in the UK – it takes just five minutes from downloading the app to account opening (provided the right requirements are in place).

07 Mar

ABN AMRO Chooses Wolters Kluwer and SAS for regulatory compliance project

ABN AMRO Chooses Wolters Kluwer and SAS for regulatory compliance project

ABN AMRO, the third largest bank in the Netherlands with more than 22,000 employees, has chosen Wolters Kluwer and SAS to provide a truly integrated finance, risk and regulatory reporting software solution. The implementation of the software is part of the bank’s major transformation project, the Finance and Risk Architecture Alignment Initiative (FRAAI), which is designed to better meet increasing requests internally as well as from regulatory bodies for ever more granular or different data within shorter time lines.

Better management of high-quality data and improved risk analytics are key pillars to meet the increasing need for control, intelligence and insight in the bank’s performance. At the same time the bank aims to optimize its IT maintenance costs, promote automation and increase the efficiency and agility of the finance and risk processes.

Together, Wolters Kluwer and SAS will provide the software component ABN AMRO needs to achieve these goals.

05 Mar

Why is this bubble far worse than the tech bubble of 2000?

Ah the good old days. Stocks up $25, $50, $100 more in a single day. Day trading was all the rage. Anyone and everyone you talked to had a story about how they had made a ton of money on such and such a stock. In an hour. Stock trading millionaires were being minted by the week, if not sooner.

You couldn’t go anywhere without people talking about the stock market. Everyone was in or knew someone who was in. There were hundreds of companies that were coming public and could easily be bought and sold. You just pick a stock and buy it. Then you pray it goes up. Which most days it did.

Then it ended. Slowly by surely the air came out of the bubble and the stock markets declined and declined till the air was completely gone. The good news was that some people were able to see it coming and get out. The bad is that others were able to get out, but at significant losses.

If we thought it was stupid to invest in public internet websites that had no chance of succeeding back then, it’s worse today.

In a bubble there is always someone with a “great” idea pitching an investor the dream of a billion dollar payout with a comparison to an existing success story. In the tech bubble it was Broadcast.com, AOL, Netscape, etc. Today it’s Uber, Twitter, Facebook, etc.

To the investor, it’s the hope of a huge payout. But there is one critical difference. Back then the companies the general public was investing in were public companies. They may have been horrible companies, but being public meant that investors had liquidity to sell their stocks.

The bubble today comes from private investors who are investing in apps and small tech companies.

Just like back then there were always people telling you their idea for a new website or about the public website they invested in, today people always have what essentially boils down to an app that they want you to invest in. But unlike back then when the dream of riches was from a public company, now it’s from a private company. And therein lies the rub.

People we used to call individual or small investors, are now called Angels. Angels. Why do they call them Angels? Maybe because they grant wishes?

According to some data I found, there are225k Angels in the US. Like the crazy days of the Internet boom, I wonder how many realize what they have gotten into.

But they are not alone.

For those who can’t figure out how to be Angels, you can sign up to be part of the new excitement called Equity Crowd Funding. Equity Crowd Funding allows you to join the masses to chase investments with as little as 5k dollars. Oh the possibilities!!

I have absolutely not doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments. Absolutely none. I say most. The percentage could be higher.

Why?

Because there is ZERO liquidity for any of those investments. None. Zero. Zip.

All those Angel investments in all those apps and startups. All that crowdfunded equity. All in search of their unicorn because the only real salvation right now is an exit or cash pay out from operations. The SEC made sure that there is no market for any of these companies to go public and create liquidity for their Angels. The market for sub 25mm dollar raises is effectively dead.DOA. Gone. Thanks SEC. And with the new Equity Crowd Funding rules yet to be finalized, there is no reason to believe that the SEC will be smart enough to create some form of liquidity for all those widows and orphans who will put their $5k into the dream only to realize they can’t get any cash back when they need money to fix their car.

So why is this bubble far worse than the tech bubble of 2000?

Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity.

If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it?