MarketLine Blog

Posts about Banking

Revolut: the Uber of financial services

MarketLine

Traditional banks have long been at an advantage when it comes to customer data due to having access to vast amounts of information that financial technology (fintech) competitors cannot obtain. However, this situation has been changing recently, especially in Europe. New European legislation that was introduced in 2018 called Payment Services Directive (PSD2), and it has put traditional banking products and services under a threat from a new type of digital-first startups. A handful of them have already seen a big growth in users and have broken even operationally. What… Read more

Estonia: Only 1.3m people, but 4 unicorn start-ups

MarketLine

The former Soviet-controlled nation of Estonia, home to just 1.3m people, is one of the most tech-savvy countries in the world. It holds the world record for the number of startups in the country per capita, has one of the world’s fastest broadband speeds, and its education system teaches every child how to code. It is also leading in the development of online governance infrastructure – participating in elections by internet voting takes just 90 seconds. Its highly flexible, transparent, and hassle-free infrastructure makes it a great place for business… Read more

Australia Banking sector under misconduct investigation

MarketLine

Finance is Australia’s biggest industry, and its banks are some of the most profitable in the world. Australia’s “Big Four” – Commonwealth Bank (CBA), ANZ, National Australia Bank (NAB) and Westpac – collectively hold about 80% of the country’s banking market. Despite its strong position, Australia’s banking and financial services sector has been rocked by a series of scandals over the last decade, with all “Big Four” largest banks being accused of serious misconduct. As a result, a royal commission, Australia’s highest form of public inquiry, has been called to… Read more

Brexit Uncertainty: London’s status as global financial center under threat

MarketLine

London has, for many years, been one of the world’s major financial centers. Some would even argue that it is the world’s financial center. Banks from all over the globe have offices there, many of which take advantage of the EU’s passporting system to sell their services across the Union.  However, as the threat of a rough (or no) trade deal for the UK becomes an increasingly likely prospect, many banks are looking to move their  European headquarters out of the City or at least relocate large numbers of staff… Read more

Ezetap Quest to democratize India’s digital payments industry

MarketLine

India has recently been going through a digitalization of almost everything, and this revolution has now reached the traditional banking and finance sectors. As even large banks have realized that using time tested technology means always staying a generation behind, there is now much acceptance and demand in terms of implementing financial startup products and services in the country. Additionally, the recent and largest ever government demonetization caused a cash-crunch, hitting the remote, rural areas most, and left citizens with no choice but to go digital. With nearly 1 billion… Read more

Car Loan Debt: Consumer debt getting out of control and risky betting on subprime loans

MarketLine

There are worries of a financial bubble forming in the car finance industry. Both in the UK and USA there has been a growing prevalence for dealers and manufacturers to offer PCP finance deals and this has led to a culture of consumers viewing vehicle ownership as direct debit agreements. This has rapidly increased new car registrations and thereby the amount of consumer credit and house debt that buyers are taking on because the amount of new vehicle sales that are funded by finance options is above 80%. Worryingly many… Read more

Another headache for RBS as European Commission probes plan to abandon Williams & Glyn sale

MarketLine

It seems like an eternity since the European Commission (EC) told RBS that it needed to divest of some of its banking operations as a result of receiving state aid in the form of a bailout. The EC argued that it would be unfair to enjoy such a position of power in the UK banking market (particularly in the SME segment) having needed such an injection of government cash. Almost nine years on from receiving that funding, the bank is no closer to any such divestment, having seen three separate… Read more

The Digital Age: A Hackers delight

MarketLine

Online storage is a huge leap forward in technology, allowing files to be accessed from anywhere without the need to send them via email. Files can be shared in a much simpler fashion and can be locked to ensure that any changes made are present in a single file as opposed to numerous versions of the file. This online system serves as a backup for companies and customers. A network of banking telecommunications (SWIFT) has been the target of numerous hacking and data leaks over recent years, serving to reduce… Read more

Brexit – the meaning of a messy divorce for the Euro area.

MarketLine

The lending channel between many industries and banks in the Euro area has been far from normal since 2008. This factor puts Britain in a better position to negotiate Brexit next year. The Euro area will embark on a period of further unprecedented slowdown by detaching itself from the world’s fourth largest economy. Credit to industries coming from the banking sector is key for the region to grow as the single currency area has a bank-based model as opposed to a capital market model. Debt financing to companies is largely… Read more

Trump’s win is good news for US economy

MarketLine

Donald Trump’s whole mantra during his campaign (as evidenced by his rather natty headwear) has been to ‘Make America Great Again.’ In order to do this, he knows he must make the US competitive on the global stage. He has pledged to reduce taxes heavily for low and middle income Americans and also to make sure that the wealthy (including corporations) do not pay too much as that undermines jobs. This should help boost the currently questionable level of job creation and to increase spending power, which should in turn… Read more

An inconvenient truth about the euro area

MarketLine

The creation of the euro area was a mistake. Top ranks of business and political classes in Europe were expecting an explosion in trade and economic activity following the creation of the single currency area in 2002. The euro would lubricate the integration of the newly formed euro area. It would be possible to achieve higher levels of growth and long-term prosperity. Unfortunately, the real GDP of the euro area increased only by 1.8% per year between 2001 and 2006 and by merely 0.2% per year within the 2007 -2015… Read more

Uncertainty over political events trumps fundamentals as markets fall

MarketLine

On Thursday June 23, 2016 the UK went to the polls to decide on its future as a member of the European Union (EU). By a small margin, the country opted to leave and despite the fact that no steps to enact Article 50 have yet been taken by Theresa May and her government, speculation about an imminent implosion of the British economy has been rife, damaging the value of the Pound and serving as a rather convenient scapegoat for everything from companies’ poor performance to increased prices, to political… Read more

China’s banking industry: BIS scaremongering unwarranted but warning signs must be heeded

MarketLine

China’s economic growth has been slowing for a while now and while it remains healthy, there are concerns over the state of the country’s banking industry. Non-performing loan (NPL) rates have been increasing, with some of the country’s biggest banks seeing a surge in that particular metric. Bank of China and ICBC saw noticeable increases in their NPL rates during 2015, necessitating greater allowances for credit losses, while Agricultural Bank saw something of a surge from 1.54% to 2.39%, with the retail and wholesale industry the main cause for concern…. Read more

Williams & Glyn: RBS abandons spin-off IPO plan

MarketLine

To comply with European Commission State Aid requirements, RBS agreed in 2009 to a series of restructuring measures that were to be implemented over a four year period. One of these measures was the divestment of the RBS branch network in England and Wales and the NatWest branches in Scotland. This was scheduled to be completed by 2013, but an extension was granted after the original bidder, Santander, pulled out. A consortium known as Corsair stepped into the breach and invested, facilitating a later sale or, more likely, an IPO…. Read more

Block Chain Tech The DAO becomes the largest crowd funding campaign in history

MarketLine

Block Chain technology is seen as the key breakthrough which allowed the development of Bitcoin, the enormously successful cryptocurrency. The Block Chain stands as proof of all the transactions on the network and the block is the live part of a Block Chain which records all of the recent transactions. When completed the individual block goes into the Block Chain as permanent database or ledger. Each block is arranged properly in chronological order and connected to the block next to it. Looking at the banking system for instance, this would… Read more

Williams & Glyn: Future of RBS spin-off in doubt as launch delayed

MarketLine

Overly ambitious growth strategies initially brought great success for RBS and the company was seen as the darling of the stock market, consistently delivering double digit growth. However, the company swelled to such a size that its assets were twice the size of the UK economy and a woefully ill-advised acquisition of ABN Amro in 2007 as part of a consortium tipped the bank over the edge as it took ownership of a large amount of toxic assets. The weakness was ruthlessly exposed during the global crash of 2008/2009 and… Read more

UK Economy – held back by euro area Treaty

MarketLine

The Maastricht Treaty has been slowly asphyxiating any possibility of sustained economic recovery in Britain. It has been partially responsible for the erratic recovery of manufacturing, production and construction industries. The Gross Domestic Product (GDP) of Britain peaked back at pre-crisis level in the second quarter of 2013 driven mainly by the growth of the services industry. This industry is 13 per cent larger in value compared to 2009 (figure below). Production, construction and manufacturing industries are on average 7% smaller than their pre-crisis levels. The majority of UK industries… Read more