Tuesday 30th June 2015
NEWS TICKER, MONDAY, JUNE 29TH : The mobile service provider CM Telecom says the company will move into mobile payments and has founded CM Payments, a new payment service provider (PSP) that will operate internationally. CM Payments opens its office in Amsterdam. CM was founded in 1999 in Netherlands and specialises in worldwide mobile messaging and payments. The company declares they already have in-house technology and the platform, which can process a large number of transactions per second utilises this technology for the expanded service. The platform also offers connectivity to multiple payment methods including VISA, MasterCard, Paypal, iDeal, Microincasso and Bancontact (Belgium). CM Payments wants to expand cooperation with a number of existing CM customers by using the capabilities of the payment platform. The group consists of, among others, authorities, fundraising institutions, media, e-commerce and telecom players. After a closed beta period, CM Payments will go public. - Despite offering the first prepaid MasterCard with 14 currencies on a single card at ‘spread free’ exchange rates, Centtrip is urging holidaymakers visiting Greece in the next few days to physically take enough spending money for their entire holiday, because it believes local merchants may impose limits on how much they will accept by card, or reject cards altogether as they fear they will not be able to access funds from their own banks. Centtrip hopes that the level of uncertainty facing Greece will be removed soon, and that it can start recommending people use cards again when visiting the country. Greece has announced that banks will be closed until July 6TH – the day after a referendum on bailout proposals, and there is a €60 euro limit on ATM withdrawals. However, foreign tourists, a key driver of the Greek economy, will be exempt from the restrictions. Brian Jamieson, Co-Founder and Managing Director of Centtrip, said: “Although customers will be able to use our Centtrip card and others at ATMs, they will be faced with long queues to withdraw their money. Local merchants may also impose limits on how much they will accept by card or reject these altogether because they may be concerned about accessing funds from their own bank. During the current situation in Greece and the uncertainty that prevails, we are advising people to take all the spending money they think they will need for their entire holiday in hard physical Euros. As the situation develops, we will provide further recommendations to our clients and to those travelling to Greece.” - Scotiabank's Commodity Price Index climbed by 4.7% month-over-month (m/m) in May -- the second consecutive monthly gain -- though the All Items Index remains -26.5% below a year earlier. "While global economic conditions remain lacklustre, international oil prices have lifted off bottom and supply disruptions in Western Canada's oil patch have pushed up domestic netbacks," says Patricia Mohr, vice president of Economics and Commodity Market Specialist at Scotiabank. "May and June have witnessed an extraordinary narrowing of the discounts on Western Canada's light and heavy crude oil off West Texas Intermediate (WTI) -- the North American benchmark -- a trend which will continue into July. The Forest Product Index edged down in May by -0.2% m/m and is still -11.5% below a year earlier. However, strong US housing permits in May and a growing backlog of sold, but not yet started units, points to stronger residential construction in coming months. The basic supply of shelter in the U.S. is tightening, with apartment vacancy rates at a mere 4.2% - propelling multiple-unit building permits to an annualized 592,000 units in May, the highest level since January 1990. Western Spruce-Pine-Fir 2x4 lumber prices have jumped back to US$300 per thousand board feet from US$262 in April and US$256 in May. After investors bid up LME zinc prices as high as $1.09 per pound in early May, zinc prices have unwound alongside copper to the US$0.92 mark in late June. However, closure of the Century mine in Australia and Lisheen in Ireland in 2015:Q3 will tighten world supplies, sending prices significantly higher by year end. Chinese interest in copper and other mining investments remains strong - a sign that the 'bull run' in base metals is expected to return later in the decade.

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20-20: Can ABN AMRO stake a comeback claim?

Thursday, 15 December 2011
20-20: Can ABN AMRO stake a comeback claim? It was never going to be simple but chief executive officer Gerrit Zalm had been making steady progress in turning round beleaguered ABN AMRO. The year 2011 started out promising with a strong first half but the eurozone crisis has put a question mark over whether it will return to the public markets by 2014. Despite the uncertainty, Zalm is seen as heading in the right direction. Lynn Strongin Dodds reports on the outlook for the bank. http://www.ftseglobalmarkets.com/

It was never going to be simple but chief executive officer Gerrit Zalm had been making steady progress in turning round beleaguered ABN AMRO. The year 2011 started out promising with a strong first half but the eurozone crisis has put a question mark over whether it will return to the public markets by 2014. Despite the uncertainty, Zalm is seen as heading in the right direction. Lynn Strongin Dodds reports on the outlook for the bank.

ABN AMRO’S fall from grace has been well-documented. The bank had become the symbol of the financial hubris of the pre-Lehman days with its fast past growth, high-profile takeovers and subsequent collapse. By 2007, ABN AMRO was the second-largest bank in the Netherlands and the eighth largest bank in Europe by assets. It had operations in 63 countries, with more than 110,000 employees and almost $63.9bn in revenue.  

The moniker was set to disappear when Royal Bank of Scotland, Fortis and Santander split up its international assets between them in a €72bn deal that was ranked as the world’s largest banking takeover. The financial crisis exploded a year later and the Dutch government was forced to step in to rescue not only the domestic assets of ABN AMRO but also Fortis, at a cost of some €27bn.



The two banks were subsequently merged under the ABN AMRO name and Zalm, a former finance minister who earned a reputation as a fiscal hawk, was called in as chief executive in 2009 to oversee the integration.

His task is to get the bank’s income ratio structurally below 60% and to lay the foundation for a public listing in three years’ time. To this end, Zalm has been busy cutting the workforce by about 9%, bolstering key business lines and resurrecting its energy, commodities and transportation (ECT) operations. It had sold its ECT business to Fortis in 1997 and so it is back in the fold.

Integration is still under way and the goals include improving cost efficiency, rebuilding the bank’s franchise in commercial banking and increasing market share lost in the Netherlands. Zalm is also carefully developing an international presence in the bank’s core competencies such as ECT. It has re-established a foothold in the US oil and gas market by opening an office in Dallas, staffed by a six-person team it lured away from UBS. Moscow and Shanghai are also on the list as cities where it would like to re-establish a presence.

Zalm has also returned the brand to the Dutch high street; a move which, says Claudia Nelson, senior director of Fitch, plays to the bank’s strengths. The combined entity is now the third-largest domestic bank behind rivals Robeco and ING with a market share of 15% to 25% depending on the product line, involving some 6.8m customers.

Zalm has also strengthened the private banking franchise via the respected AMRO MeesPierson brand. The bank targets customers with wealth in excess of €1m and holds around €165bn of assets under management split equally between ABN AMRO, MeesPierson and a widely spread international network. The division is also known for its global diamonds and jewellery group, which specialises in providing lending, cash management, merchant banking and transaction banking services to small and medium enterprises in the industry. Zalm is a master of detail, evinced in his product diversification strategy: he has, for instance, introduced a special service for entrepreneurs both as a private individual and as a representative of their enterprise; while ABN AMRO MeesPierson has created a dedicated service advising a wide range of non-profit organisations.

Analysts remain optimistic about the bank’s prospects on the home front, but they are more circumspect about its global ambitions in the energy sector. The general consensus is that ABN AMRO could have difficulty in competing against French banks such as Société Générale and BNP Paribas, which have a lock on the field in Europe. In fact, ABN AMRO’s former energy team ended up at BNP Paribas after it took over part of Fortis during the demerger.  

Analysts though are encouraged that Zalm appears on track to deliver the bank back to the public markets by 2014. The first-half results in 2011 show net profits of €974m compared to €325m in the same period in 2010 while its core tier-one capital ratio was 11.4%. The cost structure had also been whittled down with expenses dropping to 63% from 75% a year ago.

With the eurozone crisis rumbling in the background, the bank’s third-quarter results showed it had taken a battering as profits were almost erased by a €500m writedown on Greek corporate loans. “Uncertainty as a result of the sovereign-debt crisis, and the impact thereof on the European economy, caused us to impair part of the €1bn Greek government-guaranteed corporate exposures,” Zalm noted at the time.

Nelson says: “It is difficult to know what will happen because all banks in the eurozone will be affected. However, there has been some investor appetite for the Netherlands and there is still scope for ABN AMRO to continue to build up its business.”

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