News & numbers “The world of large-scale populations returning to a tall skyscraper building, to come


in and do their emails in the office, doesn’t make any sense.” David Duffy, CEO of Virgin Money


HSBC looks to offload unprofitable


French retail bank HSBC is in talks to sell its unprofitable


French retail bank to a New York private equity firm, the bank has told employees. The multinational – which once enjoyed the moniker of the ‘world’s local bank’ – is now looking to scale back its European and North American operations and pivot towards Asia. Cerberus, the would-be buyer of HSBC France, for its part hopes to combine it with My Money Group, another French lender it acquired in 2017. Yet any sale wouldn’t necessarily boost HSBC’s accounts. It has long struggled to off-load its 270 French retail branches, with buyers worried about costs and tough talks with local regulators. In fact, reports suggest that HSBC may ultimately have to spend some €500m (£433m) to finance the necessary restructuring.


Low interest rates mean German banks turn customers away


Though their counterparts south of the Alps have struggled over the past decade, German banks long enjoyed a reputation as the place to keep your money – with Germans themselves among Europe’s most enthusiastic savers.


But with the European Central Bank (ECB) imposing negative interests since 2014, institutions across the Federal Republic are finally telling customers to move their money elsewhere. Though banks were long able to pass these additional costs on to customers in other ways, for instance by charging higher fees, many have run out of options.


The pandemic has hastened these changes along, with Deutsche Bank and Commerzbank both charging customers a 0.5% annual rate to keep large sums with them since last year. Others have even developed online tools to help customers take their deposits elsewhere. When it comes to German business customers, however, the situation seems slightly brighter. Working with Raisin, a Berlin start-up, the European business account Qonto offers a way out of the negative interest doldrums. Would-be business depositors can enjoy interest rates up to a balmy 1.25%.


Banks experimenting with WFH as lockdown eases


UK bank fraud


hits record high Spurred on by the coronavirus, 2020 was the worst year yet for bank fraud in the UK. According to a new report by UK Finance, impersonation scam cases – where criminals convince victims to hand over money by pretending to represent a bank or other institution – almost doubled to 39,364 last year. In particular, fraudsters exploited worries about the pandemic to fool their victims, sending fake emails pretending to offer financial support or text messages demanding payments for non-existent vaccine appointments.


Authorised Push Payment (APP) fraud cases, where customers are tricked into authorising a payment to a criminal account, also rose – with total losses amounting to £479m. Not that it’s all bad news. According to Katy Worobec, managing director of economic crime at UK Finance, the banking industry successfully stopped £1.6bn of fraud in 2020.


Though the UK’s vaccination programme is continuing apace – and the pubs have finally reopened – many banks still expect to mix in-person with remote work going forward. A case in point is Barclays, where CEO Jes Staley expects staff to return to the office this year – but adds that the packed skyscrapers common before the pandemic might be “a thing of the past”. He should know – at one point, 75% of his bank’s 80,000 employees were working from home.


Other banks have taken a similar position, with HSBC, Standard Chartered and Santander also promising more flexible working models going forward. At Citigroup, staff are even banned from taking internal video calls on Fridays and are being encouraged to take time off. Not that everyone is so laid-back. At Goldman Sachs, CEO David Solomon said in February that remote work was “an aberration that we are going to correct as quickly as possible”.


Global giants push ahead with sustainability


Banks are enthusiastically embracing sustainability, despite economic pressures and the challenges of the pandemic. According to a report by Mazars, the crises of 2020 may have pushed these changes along. As Mazars partner Leila Kamdem-Fotso put it: “The financial world can no longer separate its future from the environment and climate change.”


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Standard Chartered recently unveiled new sustainable trade offerings, while CaixaBank signed a €750m (£650m) deal with REWE Group.


Mazars reports, only 68% of British and French banks have integrated climate risk into their risk management frameworks – a figure that slumps to just 61% across the rest of Europe.


Future Banking / www.nsbanking.com


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