RETAIL BANKING | Staff Reporter, Singapore

Weekly Global News Wrap Up: Deutsche Bank to build $56b bad bank; Big Nordic banks cut compliance jobs

And banks in Nigeria are tapping on a growing youth demographic.

From Reuters:

Deutsche Bank is planning to overhaul its trading operations by creating a so-called bad bank to hold tens of billions of euros of non-core assets, a source close to the matter said on Monday.

The bad bank would house or sell assets valued at up to 50 billion euros ($56 billion)- after adjusting for risk - and comprising mainly long-dated derivatives. The measures are part of a significant restructuring of the investment bank, a major source of revenue for Germany’s largest lender, which has struggled to generate sustainable profits since the 2008 financial crisis.

From Bloomberg:

The two biggest Nordic banks have both recently beefed up their compliance units significantly but both Nordea and Danske say the extra headcount is temporary. Nordea Bank has hundreds of employees who scrutinise billions of transactions in order to catch anything that looks potentially criminal. It’s a costly, inefficient system that Mikael Bjertrup, head of the bank’s financial crime prevention unit, plans to change.

“We’ll be fewer people in the future, but our defense will be better,” Bjertrup said. “We won’t need as many as 1,500 employees in the future, as technology improves.”

From Bloomberg:

Nigerian banks are trying to entice consumers with free access to music on their mobile phones, payday loans, or shopping services to add deposits and lower their funding costs. Another pressure point to change strategy is coming from a slump in crude prices that has weighed on their main customers in the oil and gas industry, and caused a surge in troubled loans.

For now, the country’s biggest lenders, such as Access Bank Plc, Guaranty Trust Bank Plc and Zenith Bank Plc, are focused on opportunities in retail banking, with their investments in new technology platforms already seeing big growth in transactions and the fees that come with it. An improvement in non-performing loans is also giving them a little more courage. 

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