financial services

The ideal financial customer is not who you think. First, she lives on about two dollars a day. Second, she lives in rural Africa, the Middle East, South Asia or Latin America. Finally, she’s never owned a financial account of her own.

What’s ideal about all that? Growth. And digital technology is the key to driving it. Read more

Raghuram Rajan, the governor of India’s central bank, is keen on financial inclusion, an area where the country fares particular badly with around half the population without a bank account.

Perhaps one way of getting more Indian people and businesses into the financial system is to create basic banks that have no credit risk, but just take payments and deposits. Could it work? Read more

Having a heavy exposure to emerging markets can be a mixed blessing. For proof, just ask Standard Chartered.

Just a day after HSBC reported a sharp drop in profits in many of its emerging markets, it was the UK bank’s turn on Tuesday to be stung by its exposure to emerging markets.

StanChart, which generates 90 per cent of its operating profits from emerging markets, reported a 15 per cent decline in first-half pre-tax profit to $3.33bn – largely as a result of a $1bn writedown it had to make on its South Korean business. Read more

Need a bank account?

In the last 20 years, the Reserve Bank of India (RBI), the central bank, has licensed just a dozen new private sector banks. Now, the RBI has invited applications for a new round of permits and Monday was the deadline.

It’s anybody’s guess what will set the succesful applicants apart. But one thing is for sure – the government is out to improve financial inclusion. And a new index developed by Crisil, the ratings agency, uncovers the problems across India. Read more

Two years on from the start of its cleanup operation for Nigeria’s banking crisis, the Asset Management Corporation of Nigeria (AMCON) – the country’s ‘bad bank’ – is courting foreign investors.

Since its establishment in 2010, Amcon has issued five series of zero-coupon bonds with a combined face value of just under N5.7tn – that’s almost $36bn – which it has used to buy non-performing loans and recapitalise struggling banks. The first series – face value N1.7tn ($11bn) – matures in December 2013, and with African sovereign debt in high demand, Amcon is considering turning to international markets for refinancing. Read more

Or he could take it to the bank

In the last few years Nigeria’s banks have been to the bottom and back again, with the 2009 crisis, bailouts, mergers and the creation of a bad bank, Amcon. So is 2013 the year when they get a chance to shine?

According to a report from rating agency Standard & Poors, The Nigerian Banking Sector Outlook 2013: At The Start Of A New Cycle, the mixture of strong economic growth in Nigeria and political stability should underpin a year of expansion. Could anything go wrong? Read more

Another foreign bank is looking to exit at least part of its business in Latin America – this time Citi with its Brazil credit card division.

Brazilian newspaper Valor Econômico reports that the local branch of Santander and domestic institution Bradesco are interested in the division, called Credicard. The group is said to be looking to sell the card unit and its consumer finance division, Credicard Financiamentos, for R$1bn and R$1.5bn in time to clock the sale in its first quarter results. Read more

Football bosses are not normally ones to mince their words, but Brazil’s new coach really surpassed himself on Thursday. Luiz Felipe Scolari, or Felipão (Big Phil) as he’s known, has only been in the job a few hours but he’s already managed to spark a national scandal, it seems.

At a press conference to announce his appointment, the former Chelsea manager was asked about the pressure the Brazilian team would be under to win the World Cup on their home turf in 2014. Read more

Whoops, looks like some Indian brokerages got a bit ahead of themselves in trying to attract US investors.

On Tuesday, the US Securities and Exchange Commission charged four financial services firms in India for providing brokerage services to US institutional investors without being registered. Read more

The Hungarian government of Viktor Orban puts great stress on the country’s history and culture: hence the lead story on the government website on Monday was of a squadron of hussars – light cavalry – parading in a show of pomp and colour around Buda’s Castle District on Saturday.

Good for local pride, perhaps, but buried six stories below (and only in Hungarian), was an item from late Friday that might have more bearing on the local pocket – the official riposte to Standard & Poor’s downgrading Hungary from BB+ to BB, with the outlook changing from negative to stable. Read more

By Elizabeth Buse of Visa Inc

After years of international isolation, the government of Myanmar has a golden opportunity to create a fully-inclusive financial system. It should take it. Read more

It may be one of the sturdiest in the world, but Brazil’s banking system can still be a rather unpleasant place for investors.

After three months of looking for a buyer for the mid-sized bankrupt lender, Banco Cruzeiro do Sul, the central bank gave up on Friday and announced it would liquidate the bank. It also shut down Banco Prosper, which Cruzeiro do Sul had been in the process of buying. Read more

The ballyhoo sparked by the peace talks between the FARC and the Colombian government dominated headlines last week, shadowing a banking milestone: Bancolombia borrowed a record $1.15bn in international debt markets. It also added $50m more during Asian market hours, bringing it to a total of $1.2bn. Read more

Could Banco Santander’s partial float of its local subsidiary on Mexico’s stock market be the start of a trend? This week, the Spanish-based bank launched a listing of its Mexican arm, which at the top end of its pricing range, would value the Mexican operation at more than US$17bn.

The plan is to list about 25 per cent of the subsidiary – 20 per cent of that on the Mexican stock exchange and the remaining 80 per cent in New York via American Depositary Receipts (ADRs). Read more

Hugo Chávez is not dearly loved by Venezuela’s business community, who have to negotiate a web of regulations and controls, not to mention put up with the constant threat of expropriation hanging over them.

But things are going all right for Banesco, Venezuela’s second biggest bank which on Thursday confirmed that it will set up operations in Colombia after getting the green light from regulators in the neighbouring country. Read more

India’s Bharti Airtel – the world’s fifth largest telecoms company by customer base – on Tuesday announced a tie-up with South African financial services group Sanlam to distribute insurance and healthcare funding products.

The agreement will see Sanlam selling its life, general and health insurance products through Airtel’s network in seven countries: Kenya, Ghana, Tanzania, Zambia, Uganda, Malawi and Nigeria. Analysts said that while it might not boost profits at Airtel’s still struggling African operations, it is a sound move in a competitive market. Read more

The collapse of Amber Gold, an unregulated Polish lender and investment firm which on Monday announced it was liquidating itself, is denting the perception of both the common sense of Polish investors as well as the effectiveness of Poland’s financial markets regulators.

On the investor side, the hunt for above-market earnings in a low interest rate environment is common around the world, but when a firm offers 16.5 per cent “guaranteed” returns for investments in gold and other precious metals, even the greediest investor should approach with caution. Read more

Brazil bulls. They do exist. Beyondbrics has found one in the form of Caixa Economico, the Brazilian bank wholly owned by the government.

The country’s largest mortgage lender on Thursday said it planned to increase its loan book by a whopping 42 per cent this year as it looks to take advantage of its private sector rivals’ retrenchment. Read more

The average Czech’s financial conservatism is legendary – and Tuesday’s first-half results from Erste Group Bank perfectly illustrate this.

The Austrian bank, which together with Raiffeisen Bank International and UniCredit Group, make up the triumvirate of emerging Europe’s largest lenders, reported first-half operating profit down 11 per cent to €1.75bn as the bank was unable to cut costs at a fast enough rate to make up for the 6.7 per cent decline in revenue. Read more

By Linda Yueh, economics editor, Bloomberg TV

China has done it again – The People’s Bank of China surprised the markets on Thursday by cutting its main one-year lending rate for the second time in a month.

It’s not just the rate cut but what came with it: China again widened the amount that banks can deviate from the benchmark lending rate, and it made asymmetric cuts to the lending and deposit rates. Both portend a significant set of financial reforms that is quietly emerging behind the headlines of further monetary stimulus. Read more