UAE’s first independent digital banking platform launches

DUBAI – The first independent digital banking platform in the United Arab Emirates launched on Sunday, a neobank hoping to become a leader in the Middle East, Africa and South Asia.

Dubai-based YAP does not have a banking licence itself but has partnered with RAK Bank which provides international bank account numbers for YAP users and secures their funds under its own banking licence.

YAP, like other neobanks which do not have physical branches, does not offer traditional banking services like loans and mortgages, but offers spending and budgeting analytics, peer-to-peer payments and remittances services and bill payments.

YAP is in the process of partnering with banks in other countries, head of product Katral-Nada Hassan said, including a bank in Saudi, in Pakistan and in Ghana.

Global leaders in digital banking, such as Revolut, one of the world’s fastest-growing apps, do not have a UAE presence.

Some UAE banks have in recent years launched their own digital banking offerings targeted at digitally-savvy and younger users, such as LIV by Emirates NBD and Mashreq Neo by Mashreq Bank.

Abu Dhabi state-owned holding company ADQ last year said it plans to set up an as-yet unnamed neobank using a banking licence of the country’s biggest lender, First Abu Dhabi Bank (FAB).

“The fintech revolution has become very popular in other parts of the world and we saw a gap and unique need for this service in the Middle East,” said YAP CEO and founder Marwan Hachem

Hassan said there are challenges for fintechs looking to expand to the UAE.

“There are a lot of fintechs right now looking at partnering with banks, but that requires a lot of discussion, relationship building … It is not an easy thing to do,” she said, adding YAP’s founders had an existing relationship with RAK Bank.

YAP is at seed funding stage, funded by founders, a private equity firm and private investors, Hassan said, adding that more than 20,000 customers have pre-registered and accounts will gradually go live in coming weeks.

Credit Suisse winding down Greensill-linked funds

ZURICH (Reuters) – Credit Suisse is winding down its supply chain finance funds which held most of their roughly $10 billion in notes backed by beleaguered Greensill Capital, it said on Friday.

“The fund boards have now decided to terminate the funds. Credit Suisse Asset Management’s priority is to ensure a balance between a timely liquidation of the funds and maximizing value for the investors,” it said in a statement.

It had suspended the funds on Monday.

Source: Reuters

JPMorgan looks to cut office space in Manhattan – Bloomberg News

JPMorgan Chase & Co is looking to sublet big blocks of office space in Manhattan, Bloomberg News reported on Tuesday, citing people with knowledge of the matter.

The bank is looking to sublet just under 700,000 square feet at 4 New York Plaza in the Financial District and more than 100,000 square feet at 5 Manhattan West in the Hudson Yards area, the report said. (

Due to COVID-19 pandemic-led lockdowns and stay-at-home orders, fewer people have been going to office, which has prompted companies to reassess the need for real estate.

“It is too early to comment on specifics as we continue to learn and adapt to this current situation and how it impacts our commercial real estate needs. We are committed to New York and are planning for the next 50 years with our new headquarters here,” a spokesperson for the bank said.

Real estate broker Jone Lang LaSalle is marketing JPMorgan’s space, the report said.

In October, JPMorgan Chief Executive Officer Jamie Dimon said JPMorgan would press ahead with its plans to build a large headquarter in New York that is scheduled to open in 2024. (

Analysis: Central banks will happily ignore inflation-mongers

After a decade of underestimating inflation, central bankers in the United States, Europe and Japan have every reason keep money taps open and policymakers are even rewriting their own rules so they can let price growth overshoot their targets.

If anything, central banks are more likely to nudge up stimulus, particularly in the euro zone, keeping borrowing costs depressed and ignoring the inflation hawks at least until growth is back to pre-pandemic levels — and not just fleetingly.

The Reserve Bank of Australia already launched a surprise bond buying operation while the European Central Bank has repeatedly warned investors not to push yields too high, unless they want to fight its 1 trillion euro war chest.

The argument behind the inflation warning is that once economies reopen, massive government stimulus will combine with pent up consumer demand, unleashing spending-fuelled price pressures unseen for decades.

Although top economists are weighing in on both sides of the debate, the voices that really count all seem to be downplaying the threat.

“Inflation dynamics do change over time but they don’t change on a dime,” Federal Reserve Chair Jerome Powell said.

“We don’t really see how a burst of fiscal support or spending … that doesn’t last for many years, would actually change those inflation dynamics.”

Even if inflation accelerates, a big if given that big central banks are all undershooting their 2% goal, tightening policy too hastily is seen as a bigger evil than moving too slowly.

First off, much of the inflation rise is temporary, driven by the rebound in oil, one-off stimulus measures and the base effect of tanking prices a year ago. So this is not the sort of sustained inflation policymakers are looking for.

Tighter policy could also choke off growth – a costly blunder with tens of millions still out of work after the biggest peacetime economic crisis in a century. In the worst case, higher borrowing costs would even raise debt sustainability concerns, particularly in heavily indebted southern Europe and across emerging markets.

And lastly, the Fed and European Central Bank both tightened policy too quickly in the past decade, forcing them into the type of credibility-damaging reversal they are now keen to avoid.


The message from the Fed has been uniform and emphatic: its $120 billion monthly bond purchases will not change until the economy has more fully recovered, and any actual interest rate increase is even further into the future.

The Bank of Japan and the ECB are making similar noises: there will be no reversal of stimulus for a long time, possibly years.

Their central concern is employment.

There is still a 10-million-job hole in the U.S. economy while the euro zone unemployment rate is kept artificially low by government subsidies, pointing to huge spare capacity.

The Fed is already putting greater emphasis on job creation, particularly for low income families, and made an explicit commitment last year to let inflation overshoot its target after periods of excessively low price growth.

While the ECB and the Bank of Japan do not have employment mandates, policy framework reviews now underway could raise the emphasis on social considerations, particularly jobs.

The ECB is already debating the merits of letting inflation overshoot, a hint that overheating in the jobs market will not on its own trigger policy action.

“Labour markets tend to lag real activity by as much as six months, and we may yet see a wave of mergers, bankruptcies, and layoffs,” said Tamara Basic Vasiljev of Oxford Economics.


While the rise in yields has caused a ruckus in markets, the moves are not excessive and may simply be a reversal of excessively low yields.

U.S. 10-year Treasury yields are up 56 basis points this year – to roughly their pre-pandemic record low – while Japanese yields are just 14 basis points higher. A 10-year German bond still yields a negative 25 basis points.

“We see a return of bond yields from ultra-low to still low levels as a consequence of, rather than an obstacle to, a strong economic rebound and solid gains in corporate earnings in most of the world,” Berenberg economist Holger Schmieding said.

Policymakers have also played down the moves.

Atlanta Fed President Raphael Bostic argued that the increase in yields was of no concern and did not warrant any Fed response.

ECB policymakers have meanwhile said some rise in yields was a reflection of better fundamentals and they would not target any yield level.

“I don’t think the BOJ is too worried about the recent rise in yields,” Tomoyuki Shimoda, a former BOJ executive and Hitotsubashi University professor said. “The BOJ has plenty of scope to ramp up buying as needed. It can stem unwelcome yield rises 100%.”

By: Balazs Koranyi, Howard Schneider, Leika Kihara

Citigroup revises earnings lower after losing Revlon case

Citigroup Inc said on Friday it recorded an additional $390 million in operating expenses in the 2020 fourth quarter after a federal judge ruled that it was not entitled to recoup the money it mistakenly wired to lenders of Revlon Inc last year.

As a result, Citigroup revised its fourth-quarter earnings to $1.92 per share down from $2.08, according to a filing.

Bank of America to give U.S. staff paid time off to get vaccinated – Bloomberg News

Bank of America Corp will offer its employees in the United States paid time off when they become eligible to get the COVID-19 vaccine, Bloomberg News reported on Friday, citing a memo.

Staff will have the option to use two half days, for up to four hours each, for vaccination appointments this year, according to the report. (

The policy is designed to accommodate the two-dose regimen current vaccines require, Bloomberg News said.

Bank of America did not immediately respond to a Reuters request for comment.

ECB’s Stournaras calls for increasing bond buying to calm markets

Greece’s Yannis Stournaras became the first European Central Bank policymaker on Friday to openly call for increasing the pace of ECB bond purchases to stem a rise in borrowing costs.

With euro zone bond yields set for their biggest monthly rise in three years, the ECB is under some pressure to make good on its promise to keep borrowing costs easy for the coronavirus-stricken bloc through its Pandemic Emergency Purchase Programme (PEPP).

“In my view, there is an unwarranted tightening of bond yields, so it would perhaps be desirable for the ECB to accelerate the pace of PEPP purchases to ensure favourable financing conditions during the pandemic,” Stournaras told Reuters in an interview.

“In my view there’s fundamental justification for a tightening of nominal bond yields in the long end,” the Greek central bank governor said.

Stournaras said ECB policymakers should instruct the Executive Board, which runs day-to-day business including bond purchases, to intervene accordingly when they meet on March 11.

He added that they may also alter the ECB’s policy message “slightly”, although he said no material change was needed as the central bank still had almost 1 trillion euros left to spend in its PEPP arsenal.

Germany’s 10-year yield, the region’s benchmark, fell to its lowest for the day at -0.287% after Stournaras’ comments. It was still set for its biggest monthly gain since January 2018, however, with a 24 basis-point rise.

Earlier on Friday, ECB board members Philip Lane and Isabel Schnabel had said bond yields warranted monitoring but stopped short of calling for more purchases.

“At this stage, an excessive tightening in yields would be inconsistent with fighting the pandemic shock to the inflation path,” Lane said in an interview with Spanish newspaper Expansión.

“But at the same time, it is crystal clear that we are not engaged in yield curve control, in the sense that we want to keep a particular yield constant”.

Schnabel was even more cautious, saying that a gradual rise in bond yields would even be welcome if it reflected higher inflation expectations, showing that the ECB’s stimulus is working.

“Even gradual increases in real yields may not necessarily be a cause of concern if they reflect improving growth prospects,” Schnabel added.

BBVA weighs cutting around 3,000 jobs in Spain – Expansion says

(Reuters) – Spain’s BBVA is considering cutting around 3,000 jobs in its home market, or around 10% of its staff there, to adapt to the rise in online banking, newspaper Expansion reported on Wednesday, citing sources with knowledge of the matter.

BBVA declined to comment.

Last month, the bank’s chief executive officer Onur Genc told analysts the lender was looking into cost-cutting plans for low growth geographies, “including a fast restructuring programme (in Spain)” in the first half of 2021.

Spanish and European lenders are pursuing different alternatives to cut costs, either through tie-ups or on a standalone basis, as they grapple with the effects from the COVID-19 pandemic and ultra low interest rates.

BBVA’s net profit in Spain fell 48% in the fourth quarter against the same quarter of 2019.

A spokeswoman for Comisiones Obreras, the biggest union at BBVA, said on Wednesday negotiations or meetings with the bank on potential job cuts had not started yet.

BBVA has around 29,300 employees in Spain out of around 123,000 globally.

The cuts would be roughly in line with similar measures taken by other Spanish lenders.

BBVA’s main competitor in Spain, Santander, last year announced it would lay off nearly 3,600 employees and cut around 30% of branches in the country.

U.S. bank software provider Alkami plans IPO at $3 billion valuation – sources

(Reuters) – Alkami Technology has chosen Goldman Sachs Group Inc to lead preparations for a planned initial public offering of the U.S. banking software provider later this year that may value it at $3 billion, people familiar with the matter said on Monday.

Backed by investors including General Atlantic, D1 Capital Partners and Fidelity Management and Research Company, the Plano, Texas-based firm supplies cloud-based platforms that banks and credit unions can use to set up digital offerings for their retail and business customers.

The IPO plans come as the COVID-19 pandemic has highlighted how financial services companies need secure and effective digital platforms. Smaller banks typically do not have the resources to invest in developing such systems internally, and instead turn to third-party providers such as Alkami.

Around 160 financial institutions are using their services, according to Alkami’s website.

The sources requested anonymity as the IPO plans are private. Alkami did not respond to a request for comment, and Goldman Sachs declined to comment.

Alkami last raised capital from private investors in September, taking $140 million at an undisclosed valuation. The company said at the time it had $130 million of annual recurring revenue.

Thoma Bravo-backed MeridianLink, another U.S. banking software provider, has hired banks for a public listing, Reuters reported earlier this month.

Investor interest in software companies, and the buoyant market for IPOs in general, is likely to be beneficial for both Alkami and MeridianLink.

Banking software provider nCino Inc listed in July after pricing its IPO above an already-increased price range, and continues to trade at more-than 150% above its IPO price.

Canadian banks set for earnings decline but investors optimistic about recovery

Canadian banks are set to post their fourth straight year-on-year quarterly profit drop when they report results next week, the longest decline streak since the financial crisis, on margin compression and declining commercial lending, but flattening loan loss provisions signal a turning point, investors said.

Banks’ profit margins are also expected to get a boost from rising 10-year bond yields in Canada and the United States in future quarters as short-term rates remain near zero. Banks often fund their lending with short-term borrowing or bank deposits.

Analysts estimate the nation’s six biggest lenders – Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia (Scotiabank), Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada – will post an average decline of 4.3% in first-quarter profit from the previous three months and 12% from a year earlier, according to Refinitiv data.

BMO and Scotiabank start reporting results for the three months through January on Tuesday.

Bank CEOs have turned optimistic about 2021, driven by the deployment of coronavirus vaccines, although Canada has seen a slower rollout than some other developed nations.

“Regardless of short-term issues, it’s comforting that we have multiple vaccines,” said Manulife Investment Management Senior Portfolio Manager Steve Belisle. “They’ve good reason to be optimistic versus the worst case scenarios last year.”

First-quarter profit declines will be driven by margin pressure and modest loan growth, Canaccord Genuity Analyst Scott Chan said in a note on Thursday. But profits are set to benefit from strong mortgage growth driven by booming housing demand, and gains in capital markets and wealth and asset management units, Chan said.

Chan said he’s revised earnings estimates up 3%, “supported by our assumption of better credit conditions and continued tailwinds from market sensitive businesses.”

Record provisions for loan losses (PCLs) taken in 2020 mean a significant increase in capital set aside is unlikely during the quarter, said Anthony Visano, managing director of Kingwest & Company, which holds shares in TD, Scotiabank and CIBC.

However, unlike U.S. banks that have already begun releasing some of their reserves back into earnings, Canadian lenders are likely to wait until later in the year to do so, he said.

“As the year unfolds, we should see the vaccine’s assist in terms of the loan growth books … sequentially, we should see improvements, especially when it comes to provisions normalizing,” Visano said.

($1 = 1.2716 Canadian dollars)