The National Bank of Fujairah will leverage RippleNet’s network to serve its Indian customer base and facilitate remittance payments to India through Indus Ind Bank. RippleNet’s network allows the bank to provide its customers with a seamless payment experience.

Now, the National Bank of Fujairah‘s customers will be able to carry out secure and real-time cross border payments.

With regard to the partnership with Ripple, Vince Cook, chief executive at the National Bank of Fujairah told the media, “RippleNet will enable us to stimulate an enhanced payment experience that will allow our corporate clients to manage their finances in a more efficient way. We will always look for the next best thing for our customers as part of our commitment of being the best financial partner for their business and personal needs.”

“In a fast-moving environment, banks have to act with agility and constantly look for new and improved ways to service their clients. Digitisation remains a key catalyst for change and as a customer-first bank, we understand the importance of leveraging blockchain technology to deliver seamless and frictionless experiences to our clients.”

The National Bank of Fujairah was also one of the first banks in the UAE to join the SWIFT Global Payment Innovation (GPI) network. The Swift network helps banks using its network to leverage transparency on fees and end-to-end traceability on payments conducted on behalf of clients.

Last year, the bank also joined the trade finance blockchain network Marco Polo. The network has 22 members including heavyweights such as Mastercard, BNP Paribas, ING and Standard Chartered.

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Investors who took part in the funding round for Tonik include venture capital firm Insignia Ventures Partners and Credence Partners. Regional angel investors also participated in the funding round.

With regard to the fresh funding round, Greg Krasnov, founder and chief executive at TONIK told the media, “We are honored to have secured the backing of such prominent regional investors as Insignia and Credence. Over 70 percent of the adult population in the Philippines remains unbanked, and market research indicates that over 50 percent of existing bank clients would be keen to switch their deposits to a pure-play digital contender. We look forward to working with our new investors to improve financial inclusion in the country.”

Earlier this year, Tonik Financial announced that its subsidiary Tonik Digital Bank received approval from the Bangko Sentral ng Pilipinas (BSP), to provide digital banking services in the country.

Tonik is expected to go online in the Philippines this year. It claims to be the first fully digital bank in the region and one of the very few globally to be operating on the basis of its own bank licence.

To launch its digital bank in the Philippines, Tonik is partnering with Finastra to use its cloud platform to power its end-to-end core banking capabilities. Global neobanks such as Gravity and Revverbank also use Finastra’s cloud platform.

Traditional banks such as CIMB, ING and MayBank have also launched their own digital banking unit in the Philippines.

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According to Bert Colijin, senior economist, Eurozone, ING, the Italian referendum and subsequent concern about the Italian banking sector has not impacted confidence in the Eurozone and it caused a mere stagnation in sentiment in Italy itself. “Improving order books, strong employment expectations and strengthening assessments of production in recent months outweigh increased political volatility for the moment,” says Colijin.

Inflation is currently trending upwards as the oil price effect has run out, but core price pressures are building. Businesses are indicating that they are now passing on higher input prices to the consumer. The trend remains positive for both industry and services though. If this continues, core inflation could increase somewhat quicker over the coming months, although there is a lag between this survey indicator and price developments. It is therefore more likely to impact core inflation at the end of 2017, coincidentally the time when the current QE program is supposed to end.

Retail sales declined by 0.4% MoM in November but the trend in sales growth remains positive as annual growth is 2.3%. October growth was so strong that a small monthly decline was expected.

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IFM Correspondent

October 4, 2016: Dutch bank ING, the country’s biggest lender, announced plans to shed 7,000 jobs, mainly in Belgium and The Netherlands. The plan is part of cost cutting measure for the company, which will help it save $1.01 billion by 2021. The rise of online banking competitors is forcing the bank to reshape its digital banking strategy.

ING presented the job losses in Belgium and the Netherlands as being part of its ‘Think Forward’ strategy aimed at digitising more of the group’s operations.

Rik Vandenberghe, chief executive of the bank’s Belgian arm, said on Monday that the decision was “a shock for a lot of people … it was not an easy decision, I have not slept well these last days.”

Ralph Hamers, chief executive of ING Group, said, “You have to announce these programmes and these intentions at a time when you can afford them. We’re strong right now, we have good results, we are growing and then you have to do the repairs, and not when you don’t have any choice anymore.”

He also highlighted that ING had been hit — like other European banks — by low interest rates in the eurozone and tough regulation.

Belgian and Dutch unions reacted angrily, but analysts said the job losses were the result of the online transformation of the banking industry.

The move is the third financial sector restructuring announced in Belgium in recent weeks. Earlier, Axa Belgium and P&V also announced planned job cuts.

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August 18, 2014: According to Eurostat’s flash estimate, Eurozone GDP showed 0.0% growth in the second quarter, down from 0.2% in the first quarter. The figure was even worse than the already downbeat consensus expectation. Year-on-year GDP growth moderated to 0.7% from 0.9% in the first quarter. On a country basis, the biggest countries didn’t perform well. Germany saw a disappointing 0.2 % contraction, undershooting Eurozone growth for the first time since 2009, while France suffered the second consecutive quarter of stagnation. As already reported, Italian GDP shrank by 0.2%, while Spain managed to grow by 0.6%. The Netherlands saw 0.5% growth, though this was merely a bounce back from the very weak first quarter (affected by a drop in natural gas production).

The weak GDP figures are at odds with sentiment indicators, which had been pointing to somewhat stronger 2Q GDP growth. However, one has to take into account a few elements that might have distorted second quarter growth. In a number of countries production has been hurt by two bridge holidays in May. At the same time, there was some pay-back in construction after the mild winter boosted building output in the first quarter.

On the other hand, consumer demand has probably contributed positively to 2Q growth with retail sales growing 0.4% on the quarter, while car sales also expanded. This was confirmed by positive consumption growth figures in both Germany and France. This has likely been compensated by a negative inventory contribution.

Does this mean that growth is bound to accelerate again in the second half of the year? That would have been our expectation if it weren’t for the geopolitical tensions that have injected uncertainty into the outlook. That may likely lead to a further fall in sentiment, hurting the budding domestic recovery. These figures show that the upturn remains too weak to withstand external shocks, meaning that GDP growth will probably remain stuck in stop-and-go mode. It now looks very likely that GDP growth for the whole of 2014 will remain below 1.0%.

The bottom line is that the ECB will have to maintain an extremely accommodative monetary policy, even as the US starts to tighten policy in 2015. The bank will likely be pressured to undertake additional action if some of the downside risks materialise. We believe, however, that decision makers in Frankfurt are likely to continue to highlight the importance of the measures already taken and stand pat for the remainder of the year. Big decisions on more unconventional policy measures will have to await 2015.

Eurozone: Inflation remains too low

Eurozone inflation was confirmed at 0.4% in July, with little to suggest that the ECB’s target will be reached anytime soon. But even then, we don’t believe that deflation fears have increased in Frankfurt.

HICP inflation for July was confirmed at 0.4% year-on-year, while core inflation stabilised at 0.8%. Higher food commodity prices will probably end the negative food inflation in the second half of the year, but energy prices remain at a level consistent with a year-on-year negative contribution to headline inflation. As the economic recovery remains rather fragile, there is little to suggest underlying upward price pressures. Headline inflation is therefore likely to remain below 1% for the remainder of this year. The ECB’s 3Q Survey of Professional Forecasters showed a lowering of expected inflation for 2014 from 0.9% to 0.7% and from 1.3% to 1.2% for 2015.

Even though headline inflation has fallen back to the lowest level in 5 years, the breadth of the deflationary trend has actually narrowed somewhat over the last two months. In July, 28% of goods and services in the consumer basket had a negative inflation, down from 31% in June and 33% in May. Of course, a fall-back into recession could easily reverse this trend again, but for the time being, the ECB is probably not more alarmed about the spectre of deflation than before. That also explains why we believe that the ECB will stand pat until the end of this year, awaiting more data to evaluate the impact of its already announced measures.

Source: ING

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August 13, 2014: Many countries have been under pressure to reduce their debt burden since the global financial crisis. But results are mixed and have serious implications for the recovery, says ING senior economist Teunis Brosens.

Brosens tells how there are different ways to deleverage. First, there is the hard way of paying down debt and second, a less painful way is growing income. This also reduces the burden of debt, as a smaller part of income is needed to service debts.

A way to measure the debt burden for countries is to look at debt as a percentage of GDP. “US households and businesses reduced their debt-to-GDP ratio by 18% pointssince the peak. But the debt in dollars actually increased. It was income growth that reduced the debt ratio,” Brosens said, indicating the US, UK and core parts of the Eurozone are on the “less painful” track.

Parts of Europe are struggling, but in debt-troubled Eurozone countries of Spain, Italy, Greece and Portugal, the debt ratio decreased only due to actual debt reduction. “It is like these countries have to get by on the same meagre salary, while putting aside additional money to pay off debt. An uncomfortable position,” said Brosens.

“It is difficult to determine how much further debt ratios will fall,” said Brosens. “But what we do know, is that a return to growth in southern Europe would greatly help in easing the debt burden.”

Upbeat on US

The latest National Federation of Independent Businesses Survey on small business sentiment showed a modest rise to 95.7 in July from 95.0 in June. This was a touch lower than the consensus forecast of 96.0 and is below the recent peak of 96.6 seen in May. This is disappointing when viewed in context of the strength in the ISM reports. Both the manufacturing and the non-manufacturing ISM have recovered to pre-crisis norms, yet the NFIB survey remains well down.

In the past, we have attributed this to the fact that larger corporates didn’t have the same credit constraints as small firms since they could access international capital markets while they also tended to export more of their output, which offered alternative markets to sell to. However, with the Federal Reserve Senior Loan Officers’ survey showing that credit conditions are being relaxed and with the dollar having strengthened and the external growth story, particularly in Europe, looking a little shakier then the playing field looks a little leveller.

Consequently, we are seeing the difference between the ISM and NFIB series narrow to some extent and we believe that this situation will continue in the months ahead. With half of all US employment down to the small business sector, this is a very important story to watch.

In terms of the key story for today, it is what is happening to retail sales. We assume that with employment continuing to increase and consumer confidence rising to the highest level in seven years that spending will have increased at a decent rate. That said, auto sales were a bit lower on the month so that is likely to moderate the headline rate of growth to 0.4% while we look for ex-autos sales to rise 0.6%. Moreover, the strength seen in the ISM non-manufacturing report, of which retail is one of the major components, offers support to our view of a strong outcome.

With the US economy showing renewed strength after the 1Q14 weather-relatedweakness, it is clear that the amount of slack in the economy is shrinking. This should also be evident in Friday’s industrial production numbers with output likely to rise byaround 1% MoM, given ISM strength and capacity utilisation moving to a six-year high.

As such, we feel that inflation pressures will build and will become more of an issue for the Federal Reserve, hence our early call on Fed tightening for April next year, which in turn supports our strong dollar view – EUR/USD at 1.28 for end-2014.

Nervous on Japan

Japanese 2Q14 GDP growth has come in at -1.7%QoQ, or -6.8% on an annualised basis. This is the first contraction in two quarters and is the worst reading since the 1.8% drop in 1Q11 caused by the devastation and disruption from the earthquake/tsunami on March 11.

The weakness was led by the consumer spending component (-5.2%QoQ)following the hike in the consumption tax in April from 5%to 8%. This was the first increase in the tax rate for 17 years and was part of the government’s efforts at reforming the economy and narrowing the budget deficit. It is likely that the depth of the weakness in consumer spending led to an involuntary build-up in inventories while also prompting a drop in imports. The previous rise in the consumption tax in 1997, from 3% to 5%, promptly saw a 3.5% drop in consumer spending in 2Q97.

While we had been fairly hopeful of a recovery in 2H14 GDP growth, the most recent evidence, however, hasn’t been particularly convincing. The June Tankan and the latest PMI readings for manufacturing have been fairly mixed while retail sales and export numbers have been disappointing. Rising consumer confidence is somewhat encouraging though. This takes on added importance since it will be the overall strength of the economy that determines whether the consumption tax is hiked further to 10% in December.

Moreover, if the inflation data over the summer fail to pick up as the BoJ expects, we could see them starting to consider expanding the JPY60-70tr QQE (qualitative and quantitative easing) programme. At present, the underlying (ex-consumption tax hike) core CPI measure stands at 1.4%. The BoJ expects inflation to decline to about 1.0% over the summer before picking up again, and moving back in the direction of 2.0% by 2015. We think that this target will be missed, and an expansion in QQE is therefore more likely to be in early 2015, as it becomes more likely that inflation is on an undershooting trajectory.

Source: ING

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July 25, 2014: UK 2Q14 GDP growth has come in at 0.8%QoQ or 3.1% YoY, in line with market expectations. This is the fastest rate of annual GDP growth since 4Q 2007 and means that the UK economy has finally regained all of the lost output from the recession.

At this stage we just get an industry led breakdown, which shows that service sector output drove growth in 2Q, rising 1%QoQ. In contrast, manufacturing output rose only 0.2%QoQ, total production industry rose 0.4% and construction output fell 0.5%.

However, we believe that it is just temporary softness in these indicators with business surveys, such as the purchasing managers’ indices, suggesting activity and order books remain very firm.

Indeed, the Bank of England believe on their measures that the economy grew 0.9% in 2Q and expect Q1 GDP to be eventually revised up to 0.9% from the 0.8% currently reported. Furthermore, there are going to be significant revisions to the UK GDP statistics this September with a briefing paper released in June suggesting that the recession may have been shallower than originally thought — to the tune of around 1% of GDP.

These revisions will bring the UK in line with international conventions and will likely show that the UK actually got back to its pre-crisis size at the turn of the year. The revisions will also show that the level of UK activity is around 5% greater than currently published as coverage is expanded to include more categories such as research & development and weapons production for the first time.

The key outcome from all this will be to suggest that the UK has less spare capacity than previously thought and so inflation pressures could start to build earlier than currently forecast by the BoE. As such, it is likely to support our view that the BoE will end up tightening monetary policy sooner rather than later with November being our favoured date for the first rate hike.

Source: ING

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July 16, 2014: While the World Cup trophy just landed in Berlin, the German ZEW index sends more signs of caution. The ZEW index, which measures investors’ confidence, continued its recent downward trend and decreased in July for the seventh month in a row and now 27.1, from 29.8 in June. This is the lowest level since December 2012. At the same time, the current assessment component dropped for the first time since November 2013.

Latest data releases have increased concerns about a stagnation of the German economy in the second quarter. Weak industrial production, a sharp correction in the construction sector and the reversal of the positive weather effect from Q1 do not bode well for second quarter growth. This is not only bad news for Germany but for the entire Euro zone. At present, it seems as if only a return of strong net exports and/or a real consumption boom can avoid a stand-still of the economy in the second quarter.

Only die-hard optimists and soccer fanatics would argue that the German victory at the World Cup would be sufficient to boost private consumption. Contrary to the German Summer Fairy Tale of 2006, soccer enthusiasm is very unlikely to ignite economic confidence. Back in 2006, both the national soccer team and the economy had been written off and successes came as huge positive surprise. Combined with a very special atmosphere, a new national self-confidence and, most importantly, earlier implemented reforms, the summer of 2006 brought confidence back. Even if any macro-economic impact  from soccer successes cannot be supported by statistics, the magic of 2006 remains (for some, there was a correlation. For others, it was only coincidence).

This time around, however, even the unexplainable magical interaction between soccer and the economy should be very limited. The German economy is already doing well, consumer confidence is at a 7 ½-year high and private consumption has become an important growth driver. Despite all euphoria, the World Cup title did not come as a real surprise. It was more the final stage of continuous work and improvement over a longer time period.

As much as we would like to see it, hopes that the 2006 magic between soccer and economics can be repeated are based on wishful thinking rather than on facts. Even if cheering masses in front of the Brandenburg Gate could give rise to different ideas, soccer is what has always been: the most wonderful pastime in the world.

Carsten Brzeski, ING

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July 9: The UK manufacturing output numbers for May are remarkably soft. Rather than rise 0.4%MoM as expected by the market, which seemed fully justified on the basis of the CBI industrial trends numbers and the manufacturing purchasing managers’ indices, it actually fell 1.3%MoM. This is the biggest drop since January 2013 and was broad based with 10 out of 13 sub-sectors reporting falls in output.

Utilities output rose 3.8% while mineral extraction rose 0.8% giving a total industrial production figure of -0.7% versus a 0.3% increase consensus forecast. Coincidentally, it follows on from a big downside miss on the German industrial production numbers yesterday so this could hint at a wider spell of softness in manufacturing.

Given that production industries account for 15.2% of the output approach to calculating GDP, this suggests that we may not necessarily see a pick-up in 2Q GDP growth to 1.0%QoQ as we expect, from 0.8% in 1Q14.

However, we have our doubts on today’s number given the strength in hiring within the sector and the fact manufacturing confidence is up at 40-year highs and, according to key surveys, business order books are at such high levels. Consequently, we wouldn’t be surprised to see revisions and/or a strong bounceback in June.

James Knightley, ING

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