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Home » Daily Briefing » Daily briefing - 01 April 2019

Daily briefing - 01 April 2019

Dubai: is the vision over?

What does the change of strategy mean at N26? The banking app start-up embodies the new business model of banking: with costs going to zero, scale can produce profitability in a transactional world and who needs to engage in risky lending anyhow? Well, banks. And for N26 to scale, it needs to keep its offering light. "In a change of strategy, N26 has decided not to offer its clients a wide range of other banking products for now, preferring to build up its international customer base first," reports Bloomberg. "Regional expansion will take precedence over product expansion," said Markus Gunter, chief executive officer of N26's banking arm, in an interview. "Some people claim you can't make money from 20-year-olds, but you can if your costs are low." No doubt N26 customers will be thrilled to be thought of like this.

Dubai's ruler last week welcomed the sale of ridehailing service Careem to Uber, assigning the story status alongside the near-billion-dollar sale of to Amazon in 2017. But behind the scenes, emergency flares are being prepped. The FT sticks its head above the parapet to suggest that Dubai's 'build it and they will come' business model is waning. "I am going to China, this place is dead," a senior executive at a Dubai-based family group told the FT. "It's OK if you want to retire here, but I have another decade ahead of me." This is obvious to regular visitors: the putative Dubai Creek Tower meant to be ready for its 2020 debut as the world's tallest building is still a hole in the ground. Even the local expat-directed Gulf News this weekend floated the possibility of de-pegging the dirham from the dollar. Dubai's rulers must be alarmed to see President Xi showing up in Italy with a fistful of yuan.

Is there trouble ahead for Citi? Chief executive Mike Corbat has been doing the rounds touting the coming efficiencies that machine learning will bring to the back office. But all is far from rosy at the giant consumer bank. "When Citi reported fourth-quarter earnings, the company's outgoing chief financial officer John Gerspach was peppered with questions from analysts on an earnings conference call about why improvements in the consumer unit are still ongoing at Citi," writes "The CFO said, according to the FT: "Most of the work still has to get done in the consumer business. We need to improve the efficiency in our retail business" while increasing revenue growth. Citigroup contends that the lackluster results last year were due to a weak mortgage market, a tough going in Asia and partnership deals with retailers that hurt revenue in the card business."

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