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Home » Retail Banking 2020 Insights » Morning Briefing: Deutsche profits rise... banks chastised...

Morning Briefing: Deutsche profits rise... banks chastised...

Deutsche Bank's second-quarter net profit rose to €796 million ($873.52 million) from €237 million for the same period in 2014 on the back of revenue gains and lower taxes.

Revenue increased to €9.2 billion from €7.86 billion, ahead of analysts' expectations that net profit would be around €721 million on €8.7 billion in revenue. These earnings reflect the last quarter under the leadership of co-chief executives Anshu Jain and Jürgen Fitschen. Jain was replaced by former UBS finance chief John Cryan, while Fitschen is due to step down in May 2016.

Banks must improve risk management or face increased capital buffers — BoE

UK banks have to improve their risk management or face having to build up bigger capital reserves, the Bank of England has said.

The required increase in capital buffers could be as high as 40 percent of the existing requirement.

"The PRA expects a firm's risk appetite to be integral to its strategy and the foundation of its risk management framework, so that the whole firm operates within this appetite. This requires a robust risk management framework and its effective and consistent implementation throughout the organisation," the Prudential Regulation Authority said.

Funding Circle to float fund

UK P2P lender Funding Circle is looking to raise £150 million for the launch of an investment trust later this year, so becoming the first P2P platform to float its own fund.

The Funding Circle SME Income fund is expected to invest in small business loans emanating through the lender's platforms in the UK and US and any other markets the company enters.

Libor-style scandals could happen again as banks fail to reform — FCA

Banks and brokerages have not taken enough steps to monitor their staff, leaving the door open for Libor-style scandals to happen again, according to the Financial Conduct Authority,

Despite huge fines and intervention from the EU and US, banks have not reformed their internal controls adequately, it added.

RBS posts rise in profit

RBS posted a second-quarter net profit rise to £293 million), compared with £230 million for the same period in 2014. Revenue fell to £4.3 billion from £4.9 billion.

The banks said it is still on course to shrink its investment bank and sell down its interest in US-based Citizens Bank, as it continues to retrench and focus on the UK retail sector.

Spain's Santander achieves 18 percent rise in net profit

Meanwhile, the biggest bank in the eurozone, Santander, reported an 18 percent rise in second-quarter net profit, helped by rising revenues in Britain and the US.

The profit of €1.71 billion euros ($1.88 billion) was slightly below forecasts for €1.77 billion.

US investigates ex-UBS employee in Puerto Rico

UBS has confirmed that the US Department of Justice is conducting a criminal investigation focusing on a former employee in Puerto Rico. It also disclosed that regulators were conducting two related investigations.

The unidentified former employee has been the target of civil claims that he advised clients to take UBS loans to buy funds from the bank that were underpinned by Puerto Rico debt securities which subsequently lost value. This was despite the fact that the terms of the loans did not allow them to be used for purchasing securities.

MasterCard's revenue misses estimates

MasterCard reported lower-than-expected quarterly revenue as the card network offered more rebates and incentives to win new business and renew existing deals.

MasterCard shares fell by about three percent in pre-market trading on Wednesday. It revealed that it had paid $940 million in rebates and incentives in the second quarter, up 21 percent on the same period in 2014.

Uber makes entry into financial services

Uber Technologies has launched its own auto-leasing subsidiary in a pilot project that sees it enter the financial services sector directly for the first time. This follows the ending of its partnership with Banco Santander earlier this year.

Barclays likely to look overseas for new boss

Barclays executive chairman John McFarlane has said that the bank is likely to seek a new chief executive from outside the UK, while also admitting that several internal candidates were in the frame to replace ousted chief executive Antony Jenkins.

Irish banking system 'entirely of and for itself', banking inquiry hears

A former non-executive director of the EBS Building Society has told the Irish banking inquiry that the decision to issue a blanket bank guarantee in September 2008 was "indefensible".

Ethna Tinney said: "My personal view as a citizen of the Republic of Ireland, perhaps to some extent influenced by hindsight, is that it was indefensible for the government in September 2008 to in effect yield the sovereignty of this country in order to shore up a banking system that is entirely of and for itself and will never change."

Merchants file challenge to settlement with Visa, MasterCard

Legal representatives of about 100 merchants have formally notified MasterCard and Visa that they believe a $6 billion class-action antitrust settlement should be thrown out because of a discovery that opposing lawyers in the case exchanged confidential information.

The action could potentially scupper the pact that was approved by a federal judge in 2013.


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