David Beckham Signs with Bank of America as Global Banking Shifts Continue

Beckham signs for Bank of America

The other type of football is gaining popularity in the United States. US president Donald Trump welcomed Cristiano Ronaldo to the White House as part of a Saudi-US dinner. (Ronaldo plays for Saudi team Al Nassr, and FIFA president Gianino Infantino was also present: Saudi Arabia hopes to host the World Cup in 2034.) Mr Trump told guests that he had earned more respect from his son Barron after introducing Ronaldo at the White House. So what’s the banking angle here? Well, Reuters reports that Bank of America has signed a multi-year sponsorship deal with David Beckham, former England international and co-owner of Inter Miami, where Lionel Messi plays. “The World Cup begins in June and is sponsored by BofA,” says Reuters. “The deals with FIFA and Beckham fit with the second-largest U.S. bank's investment in global sports events and programs as a way to burnish its brand, market services and engage with local communities, said David Tyrie, its president of global marketing and digital. ‘It'll be an access point for clients and prospects across the board, but what this really does for us is it opens Bank of America's branding to go far beyond traditional financial categories, and hopefully create emotional connections that are going to drive loyalty.’” Beckham was knighted by King Charles earlier this month.

Nationwide goes against branch closure trend

In the UK, a bank not closing branches becomes news. Nationwide, the only UK bank with branches to regularly feature in the top five in the UK’s customer satisfaction surveys, says it will keep its 676 branches open for the next five years at minimum. “The new pledge will protect all Nationwide and Virgin Money branches, extending its previous ‘branch promise’ by two years,” reports the FT. “Bosses hope it will win them greater custom from rival banks, which are cutting costs by closing branches as the shift to online banking intensifies. Over the past decade, the UK has lost 66 per cent of its bank branches, according to research by consumer group Which?, with more than 6,500 closing for good. In high streets where rivals have announced closures, Nationwide branches feature prominent window displays featuring slogans such as: ‘Halifax might be leaving — why don’t you leave Halifax?’” In the 133 locations where Nationwide and Virgin are the last remaining banks in town, they’ve seen current account openings rise by 29 per cent year-on-year.

Revolut applies for first African licence

Revolut says it has formally applied for a banking licence in South Africa. “The company confirmed in a media statement that it has submitted its Section 12 application under the Banks Act – the first regulatory step required to establish a licensed bank in the country,” says MoneyWeb. The bank has appointed Dr Gaby Magomola as its chair. Dr Magomola is a former chief executive of African Bank. Revolut South Africa chief executive Jacques Meyer said that Dr Magomola’s strategic navigates the regulatory environment. If successful it will join digital competitors such as TymeBank, Discovery and the new OM Bank from Old Mutual.

UBS ponders USA

Reports today say UBS chair Colm Kelleher held talks with US Treasury Secretary Scott Bessent about moving the bank to the United States. It’s widely seen however as a tactic to pressure the Swiss government and central bank into loosening new capital requirements. The Swiss have pushed through the new Basel III requirements while other international banks – with tacit government approval – are holding out for a better deal. That could mean UBS operating at a 19 per cent tier one core equity ratio versus its peers at 11 per cent. “UBS has argued that the new requirements go further than those required of global peers and would reduce its ability to compete internationally,” the FT reports. Under pressure from the US, Swiss banking has dropped many of its fabled bank secrecy services and an agreement earlier this year gives US regulators visibility over US accounts at Swiss banks. With the scenario of Swiss taxpayers being on the hook for a bailout of Credit Suisse, UBS agreed to step in and acquire the bank, so UBS feels harshly treated after holding up its side of the bargain. “Activist investor Cevian Capital, which has a sizeable stake in UBS, said in September that the proposed Swiss capital changes would make it ‘not viable’ to run a large international bank from the country. It added that UBS would have ‘no other realistic option’ but to leave Switzerland if the proposals were not watered down.”

Bob Diamond sees big opportunities in consolidation

Banker and investor Bob Diamond sees big opportunities for consolidation in the famously diverse US banking market, which has upwards of 4,500 banks. Diamond believes that regulators are embracing consolidation under the Trump administration. “Diamond’s Atlas Capital, which raised a fund to invest in US regional banks earlier this year, is already working on a number of tie-ups among the 4,500 banks across the country, he said in an interview with Bloomberg Television. He declined to name the lenders his fund is working with. ‘With the support of the Treasury and the SEC in terms of approvals of these — and the OCC — we think that there’s going to be consolidation that takes that number of 4,500 to something closer to 1,000 or 1,500 literally over the next two to three years,’ said Diamond, who ran Barclays until 2012 before founding his investment firm.” He sees activity happening between banks with $10 to $50 billion in assets. “You think about the cost of technology, that comes right out because almost all these banks are on the same technology platform; the cost of regulatory relations, you’ve got duplicate departments, that comes right out,” he said. There’s an opportunity “to get really, really good returns just from the cost synergies, to say nothing about the revenue synergies.”

Bitcoin heads south

It’s a small amount in the general scheme of things, but Czech Republic’s central bank says it spent a million dollars last week to acquire bitcoin and some other cryptocurrencies and stablecoins. The coins are for a two- to three-year project to evaluate the utility of digital assets. Think of it as a fully-stocked sandbox. “Governor Ales Michl, who originally floated the idea of looking at bitcoin in January, said new ways of making payments and investments were emerging, and the bank wanted to be ready,” reports Reuters. “‘It is realistic to expect that, in the future, it will be easy to use the crown to buy tokenised Czech bonds and more besides – with one tap an espresso; with another an investment such as a bond or another asset that used to be the preserve of larger investors,’ Michl said in the statement. ‘As a central bank, we want to test this path.’ The bank will be doing transactions with the portfolio for purposes of the experiment. The portfolio's value may change over time due to price fluctuations and composition may change by the bank testing purchases of other digital assets.” Bitcoin’s volatility will be one early lesson for the central bank, as the original cryptocurrency dropped 10 percent since last week as part of a close to 30 per cent drop since early October. One analyst observed that the broader crypto market is now broadly flat for the year despite new regulations much more favourable to crypto.

Zenith plans expansion into Kenya

In other news from Kenya, Nigerian-headquartered Zenith Bank is set to acquire Paramount Bank: Nigeria’s bank recapitalisation is putting it head of Kenya’s Bank recapitalisation. The bank awaits approval of the central banks in both countries. “Paramount Bank, a mid-tier lender with core capital of Sh2.67 billion (N29.79 billion) and a network of eight branches, is among institutions facing pressure to recapitalize. Options include retained earnings, fresh equity, or strategic partnerships – making Zenith Bank’s offer timely and potentially transformative,” reports Nairametrics. “If approved, Zenith Bank would become the fourth Nigerian lender to operate in Kenya, joining United Bank for Africa (UBA), Guaranty Trust Bank (GTBank), and Access Bank. The deal also coincides with the lifting of a decade-long moratorium on new banking licenses in Kenya, further opening the door for regional integration. This East African push follows Zenith Bank’s recent announcement of plans to expand into Côte d’Ivoire and eight other Francophone African countries. The expansion is backed by a robust N614.65 billion hybrid capital raise, which increased the bank’s capital base by 160%.”