Barclays Appoints New Chief Executive

Barclays has appointed Antony Jenkins to be its new chief executive.

The appointment follows the resignation of former chief executive Bob Diamond in the wake of the Libor interest rate-fixing scandal.

Mr Jenkins currently runs Barclays Retail and Business Banking and has been a member of the group's executive committee since 2009.

In a statement, Mr Jenkins said he was "very proud to have been asked to lead Barclays", where he began his career nearly 30 years ago.

But he admitted: "We have made serious mistakes in recent years and clearly failed to keep pace with our stakeholders' expectations."
Mr Jenkins takes over at a difficult time for the banking group, which has seen its reputation severely dented.

In June, it was fined £290m by UK and US regulators for manipulating Libor, an interbank lending rate which affects mortgages and loans.

Mr Jenkins will start on a basic salary of £1.1m, with a potential annual bonus worth up to 250% of his salary subject to performance.

On top of this, he may be eligible for a long-term incentive bonus worth a maximum of 400% of his salary.

Barclays chairman Marcus Agius said Mr Jenkins was chosen "because of his excellent track record transforming Barclaycard and Retail and Business Banking".

Mr Agius resigned as chairman following the Libor scandal, but agreed to stay on until a new chief executive was found.

He will be replaced by Sir David Walker.

The scandal also led to the resignations of the group's chief executive, Bob Diamond, and its chief operating officer, Jerry del Missier.
Mr Jenkins was chief executive of Barclaycard from 2006 to 2009.

Extract taken from:

http://www.bbc.co.uk/news/business-19420310

The Social Recruitment Compass

The rapid integration of social media into the business world has created an enormous amount of new jobs and roles, both in this new sector and also within existing, established positions – a primary example being marketing.

Indeed, this diversity is now so wide and vast that it can be difficult to keep track of who is needed where… and to do what?

Thankfully, help is at hand, via this social recruitment compass, courtesy of Provide People. Twitter warrants a couple of strong mentions, both as a sub-sector itself, and also in the location services category. There are a few notable omissions – Pinterest, for one – and Facebook, I feel, deserves it’s own sub-sector, too, as many businesses and individuals rely on that behemoth for work, but perhaps that will come with a future update.

Extract taken from:

http://www.mediabistro.com/alltwitter/social-recruitment-compass_b27192

Big banks swing axe to slash 5,350 jobs

Three of the world’s biggest banks are preparing to shed a combined 5,350 investment bankers, as the industry struggles to adapt itself to continuing economic woes and the advent of new regulation.

Morgan Stanley is cutting a further 4,000 jobs, Deutsche Bank is set to lay off about 1,000 of its investment banking staff, equivalent to about 10 per cent of the unit’s workforce, while Citigroup is shedding 350 bankers.

Deutsche’s cuts, likely to be announced with quarterly earnings in a fortnight’s time, bring the German group more into line with European peers such as Credit Suisse, UBS and Barclays, which have taken a more aggressive stance on cost cuts over the past year.

Deutsche announced it was cutting 500 jobs last autumn, a process that the bank said a few months ago was largely complete.

The new job losses are likely to be mainly outside Germany, with most at the group’s principal investment banking bases in London and New York.

At Citi, the additional job losses, which will be focused mainly on traders, compared with a 17,000-strong securities and banking division. The US bank cut 900 jobs in December.

Credit Suisse and UBS are both pressing ahead with implementing job cuts announced late last year.

Analysts believe investment banks will remain under severe pressure to cut more costs over the coming months, as the cyclical effects of difficult trading conditions and a bleak economic outlook add to the longer-term challenges that come from tougher regulation of the industry.

“The eurozone crisis and the global macroeconomic environment have made for a cyclically weaker revenue environment,” said Kinner Lahkani, Citi analyst, pointing to a possible 10 per cent fall in the overall revenue pool across the industry in the area of fixed income, currencies and commodities.

“But the whole industry also faces structural change. The impact of over-the-counter derivatives reform, Volcker and Basel III could lead to a 15-20 per cent headwind on revenues over the next two to three years.”

So far this year, according to analysts, Morgan Stanley has implemented 1,600 lay-offs, while UBS, Credit Suisse and Barclays have all cut 1,500 staff or more.

However, on Thursday, as it unveiled weaker than expected investment banking results, Morgan Stanley said it would cut a further 7 per cent of its workforce, or more than 4,000 jobs, by the end of the year.

Goldman Sachs said it expected the sale of a hedge fund administration unit would reduce its headcount by “a couple of hundred” people and it would separately look to save about $500m a year in costs.

One Deutsche insider said its cuts were “tactical, not strategic”, suggesting there may be more to come in September when the bank’s new co-chief executives Anshu Jain and Jürgen Fitschen unveil a strategic review.

Extract taken from:

http://www.ft.com/cms/s/0/6c5382ea-d1c3-11e1-bb82-00144feabdc0.html#axzz21421Zbym

Axa Scoops Top Spot in Brokerbility Survey Once Again

The insurer scooped the highest overall satisfaction score with a rating of 80.18%.

Allianz came second in the rankings with a performance ranking of 74.87% while Aviva Bonus recorded the highest underwriting score of 77.6%.

Meanwhile, RSA improved its accounts performance by 5.4% compared to the previous survey.

Ashwin Mistry, chairman of Brokerbility said, "Our annual performance audit of insurers is a key foundation of the true partnership which exists between both parties.

"Whilst these latest findings reveal that insurers have performed well there is certainly room for improvement across all areas as we strive towards a 90% score as our minimum benchmark."

The research involved Brokerbility's seven ‘key insurer' partners, Axa, Allianz, Aviva, Chartis, NIG, RSA and Zurich.

And the survey - which is undertaken by Brokerbility members - rates insurer performance when dealing with claims, underwriting, accounts and overall satisfaction.

Extract taken from : http://tinyurl.com/buzhcfq

Barclays 'Pingit' Passes 500,000 Downloads in 4 months

Back in February, UK bank Barclays launched Pingit, a potentially game-changing app that lets users send and receive money using just their mobile phone number. And today the British bank has revealed that it has just hit 500,000 downloads of the app, less than three months after launch.

It was reported earlier this year that Pingit had sailed past 20,000 downloads in just a couple of days, which was pretty impressive given that it was open only to Barclays’ customers at the time. But when it opened its service to customer of other banks last month, it seems this may have helped boost the uptake.

There  has been lots previously written about the future of online banking, where it has been argued that Barclays blindsided the UK banking industry somewhat with the launch of Pingit. And crucially, the fact that it has opened up the service to customers of all banks could be key to its success.

By getting in there first, Pingit might become the industry standard before any of its competitors have even spluttered into their morning coffee. It’s understood that the Royal Bank of Scotland (RBS), owner of NatWest, is looking at similar ideas, as is Lloyds Banking Group.

Antony Jenkins, chief executive of retail banking at Barclays, has previously said that Pingit would revolutionize banking, or at least live up to the scale achieved by telephone and Internet banking before it.

An indication that Barclays’ move was a masterstroke came in a frank admission by an HSBC spokesperson, who said that whilst it had no current plans to launch a rival service, it was “certainly a step forward for the banking industry.” That’s about as high-praise as you’ll ever get from one bank to another.

Extract taken from:

http://tiny.cc/m7a9fw

Ring-fencing retail banks to cost up to £7Bn

The cost of ring-fencing retail banking operations in the UK could be as much as £7 billion, according to HM Treasury, but the effects on systems and processes will be wide-ranging and unpredictable.

With the publication of a White Paper this week, the UK Government confirmed that it will implement the ring-fencing proposals of the Independent Commission on Banking, with some modifications, by the 2019 deadline. All necessary legislation will be passed in the lifetime of the current parliament. Barring an early election, that means 2015.

The British Bankers' Association "welcomed the way the government's plans had evolved to make its proposals more workable" but chief executive Angela Knight said there were three key outstanding questions:

• how reform will affect banks headquartered in the UK but working largely outside it
• how banks can be assured they will not be subject to competing and different reforms
• the actual scale of the costs involved

 "The Chancellor has carefully walked the tricky path between making changes that give greater safety and security, while not making the burdens so great that it would be difficult for banks to operate effectively in the interests of their customers and of the economy," Knight said.

"At first glance, these refinements have removed many of the obstacles from the original report that, if left in place, would have hampered the banks from providing important services such as finance for mid-sized companies and trade finance for exports and from maintaining the international wealth management services so vital for our country. However, the costs to the banks - not including those of transition - are very substantial running anywhere between the Treasury's estimate of £4 to £7 billion a year.

"This leaves three big questions. First, we need to work out how today's reforms will affect those banks which have their headquarters in the UK but which operate largely outside our shores. We are pleased the capital proposals are now aligned internationally but we still need assurances that banks will not face the double-whammy of different and competing reforms. Lastly the bill is a big one and we do not yet know what the impact of this will be."

Satish Swaminathan, senior principal of capital markets at Infosys, said there are wider structural and process changes that banks will need to make to accommodate the regulations.
He believes the technological impact on the processes within banks include the need to segregate trade flows that are currently intertwined across multiple entities and systems, increased overhead on trade processing because of the need to create an audit trail for hedging transactions, and a huge impact on reference data because of the need to segregate of entities and accounts.

"The biggest challenge is going to come from the fact that transactions are so intertwined that it is hard to tell what is a hedge and what isn't," he said.
In many ways, he said, the UK is implementing a version of the US Volker Rule, which is good in some ways, as it means that there is a broad alignment of international regulations, but the UK proposes to allow some use of derivatives for hedging purposes by banks operating inside the ring-fence.

Swaminath said that the costs of ring fencing are going to be very high, based on the empirical data from the implementation of the Dodd-Frank regulation in the US. The average cost for US banks is put at $20 million, with larger banks having to spend as much as five times that, he said.

With costs like this, it is very important that as much uncertainly is removed as possible, he said: "people don't want to have to spend a tone of money to be compliant, only to have to spend another ton of money because the interpretation changes down the line".

Extract taken from:

http://tiny.cc/w198fw

'Big Society Bank' to Start Providing Capital

Hundreds of millions of pounds resting in dormant bank accounts is to be ploughed into the government’s “big society bank”, which the prime minister will launch on Wednesday, providing start-up capital for social enterprises.

Big Society Capital, the world’s first such investment institution, will invest via intermediaries in social enterprises, social impact bonds and other businesses that seek to deliver a particular social good, such as reducing reoffending or getting people into work.

The sum of £400m will come from dormant bank accounts – where there has been no customer activity for 15 years – topped up by £200m committed by Barclays, Lloyds, HSBC and RBS, the four largest UK high street banks, as part of the Project Merlin.
“Just as finance from the City has been essential to help businesses grow and take on the world, so finance from the City is going to be essential to helping tackle our deepest social problems,” David Cameron said, in a transcript of his speech released ahead of the launch.
“Big Society Capital is going to encourage charities and social enterprises to prove their business models – and then replicate them. Once they’ve proved that success in one area they’ll be able – just as a business can – to seek investment for expansion into the wider region and into the country.”
Boston Consulting Group recently reported that just £165m went into social investments last year, underlining the scale of the challenge as the government seeks to enlarge the market.
Charities have complained that their capacity to play a role in the Work Programme, which pays providers to move people off benefit lists and into work, is constrained because significant payments are made only when an individual has been found work that lasts for at least six months.
Nick Hurd, minister for civil society, said: “Charities and social enterprises have been telling government for at least 10 years that it’s very hard for them to access capital from traditional financial institutions,” adding that Big Society Capital would “play its part in correcting that market failure”.
Charities and foundations were sitting on “£95bn worth of assets currently managed very conservatively through traditional financial instruments”, he said. If a tiny percentage of that capital could be persuaded “to consider social investments as being compatible with their social mission we think we can move serious money into the social sector”, he added.
Further down the track, it was “not too fanciful” to think about creating “social ISAs” that might appeal to wealthy individuals who wanted to use their money to make “a social impact on something [they] care about”.
Nick O’Donohoe, Big Society Capital’s chief executive and former global head of research at JPMorgan, added: “None of us expect that this will be a dominant part of any individual or institution’s portfolio. We’re not talking about taking all the money that exists in the [philanthropic] foundation or all an individual’s savings. We’re just saying: ‘Look, if you can take five per cent and put it in this bucket that would make an enormous difference’.”
Big Society Capital will act as a wholesaler, investing through intermediaries such as Triodos Bank, one of the UK’s few lenders specialising in loans to social enterprises. Charles Middleton, its UK managing director, said he was pleased that Big Society Capital would be “building, rather than displacing” existing intermediaries, such as his organisation.
Faisel Rahman, founder of Fair Finance, a social enterprise which provides microfinance loans to people living in the poorest districts of London, added that Big Society Capital could be a “game changer” if its resources could be used to encourage investors to back what may be considered more risky ventures.
“Nobody wants to be the first person to put money in,” he said.

Extract taken from:

http://www.ft.com/cms/s/0/51466676-7d8f-11e1-bfa5-00144feab49a.html#axzz1r413keHS