Page 1

BANKING NEWS FLASH January 31, 2014

Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 7 Technology .......................................................................................................................... 11 Strategy .............................................................................................................................. 15

2|Sutherland Insights Banking News Flash Jan 31, 2014

Sales & Marketing Sterling Capital Funds unveils new long/short equity fund January 30, 2014 | BBR Sterling Capital Funds has rolled out its new Long/Short Equity Fund, designed to focus on long-term capital appreciation by allocating capital to external long/short equity managers. Managed by Joshua Wein, and James C Willis, the new fund will provide Class A, C and institutional shares, according to the company. Wein, co-portfolio manager based in Raleigh, North Carolina, said, “We believe there are a variety of advantages offered to clients with this fund. “The liquid exposure to long/short equity, a multi-manager approach and the ability of Sterling Capital Management, as investment adviser, to monitor underlying portfolio exposures are among the advantages offered.” The fund, which allows capital to be allocated/re-allocated and rebalanced as per the requirements, will target four investment management firms that will each sub-advise an allocated percentage of the fund with all assets custodied centrally. The company said that the fund primarily focuses on sector-specific managers; although, the team will also selectively allocate to managers with multi-sector approaches. Sterling Capital Funds Long/Short Equity Fund co-manager Willis commented, “This multi-manager approach draws upon the resources and manager search-and-selection expertise of Sterling Capital’s Advisory Solutions team. “Through an extensive investment and operational due diligence process, we are seeking skilled managers with clearly differentiated approaches to equity research, risk management and portfolio construction.” Sterling Capital has appointed Cummings Bay Capital Management, Gator Capital Management, Lucas Capital Management in Red Bank, and Sanborn Kilcollin Partners, as the sub-advisors of the fund.

3|Sutherland Insights Banking News Flash Jan 31, 2014

Citibank rolls out new ATMs with smart feature in US January 27, 2014 | BBR Citibank has rolled out its new ATMs for the US that has been designed to “remember” customer preferences and decrease the time customers spend to check balances, make deposits and withdraw cash. Citi US consumer and commercial banking president Cece Stewart said that based on extensive feedback from customers, we have reimagined the ATM experience to make it simpler and faster. “Citibank ATMs will now present information based on customer preferences automatically and they will enable customers to check their balances at any point without having to navigate through multiple screens. No matter how we interact with customers - at an ATM, in a branch, on a mobile device, over the phone or online - we want to deliver the best experience possible,” Stewart added. Featuring simplified screen flows and a cleaner, streamlined design, the new ATMs provides quicktouch balance peeks, meaning customers can be able to reviewing account balances without leaving the screen they are on, eliminating the time consuming multi-screen navigation that creates confusion. Furthermore, the new ATMs will allow customers to set preferences that will make future visits faster and easier. While making cash withdrawal, customers can set their “Fast Cash” option for quicker withdrawals in the future. The customers can select a language other than English such as Chinese, Greek, Polish, Spanish, or Hangul (Korean), and that language will appear automatically going forward. The bank has eliminated redundant screens, submenus and “Are You Sure?” prompts, while intuitive shortcuts have been added. It is equipped with new on-page scrolling, which enables faster access to more information without requiring navigation to additional screens. The new ATM functionality will be launched across the US by late February.

Deutsche Asset & Wealth Management launches three currency-hedged ETFs January 24, 2014 | BBR

4|Sutherland Insights Banking News Flash Jan 31, 2014

Deutsche Asset & Wealth Management has unveiled a set of three new currency-hedged equity exchange-traded funds (ETFs) on its db X-trackers platform. Listed for trading on the NYSE Arca, the three new ETFs include All World ex US Hedged Equity Fund, South Korea Hedged Equity Fund and Mexico Hedged Equity Fund. The new funds, which will track currency-hedged equity indexes from MSCI, will expand the db Xtrackers suite of currency-hedged equity ETFs to a total of eleven ETFs. The wealth management company said that every db X-trackers currency-hedged equity ETFs offers exposure to one or more key international equity markets, while seeking to shield against fluctuations in the value of the US dollar and foreign currencies. Deutsche Asset & Wealth Management Americas passive asset management head Martin Kremenstein said that investors are looking for products to help them manage exposure to currency risk in their international investments in the current market environment. “For this reason, we continue to expand our hedged equity platform to include countries and regions where the management of currency risk can strengthen a global equity portfolio,” Kremenstein added. The DBAW is suitable for those investors who are looking to gain broad exposure to international equity markets, while managing the currency risk from those markets, claims the asset management firm. Deutsche Asset & Wealth Management’s US exchange-traded products (ETP) platform, which was launched in 2006, currently manages $12bn in assets under management.

Xoom launches money transfer service to Vietnam January 20, 2014 | BBR Xoom Corporation (XOOM), a digital money transfer provider, has announced the launch of its money transfer service to Vietnam. This bank deposit service allows Vietnamese Americans to conveniently send money online to any Vietnamese Dong checking account in Vietnam. With the addition of Vietnam, Xoom’s money transfer services now reach 31 countries worldwide. “We are thrilled to announce that Xoom is now offering Vietnamese immigrants a very convenient option for sending money to their loved ones in Vietnam,” said John Kunze, President and CEO for Xoom.

5|Sutherland Insights Banking News Flash Jan 31, 2014

“The Vietnamese market is relatively underserved in terms of online money transfer service, while many Vietnamese Americans are online and using mobile. With Xoom, Vietnamese Americans can experience safe, convenient and cost-effective digital money transfers, with 24/7 customer service. No waiting in lines or filling out forms.” Xoom makes it secure and convenient for Vietnamese immigrants to send money from their computer, tablet or mobile phone directly to any checking account in Vietnam. When paying with a bank account, customers can send up to $2,999 for just $2.99. Recipients can access their Vietnamese Dong from their bank accounts without risk of keeping money at home or carrying it in the street

RBC Global Asset Management unveils four new ETFs January 17, 2014 | BBR RBC Global Asset Management (RBC GAM) has introduced four new Exchange Traded Funds (ETFs), designed to fulfill investors’ demand for investments generating regular monthly income. The four ETFs include RBC Quant Canadian Dividend Leaders ETF, Quant US Dividend Leaders ETF, Quant US Dividend Leaders ETF - US$, Quant EAFE Dividend Leaders ETF and Quant EAFE Dividend Leaders ETF - US$. RBC Global Asset Management president Doug Coulter said, “These new ETFs address those needs, offering superior construction and very competitive management fees.” Each RBC Quant Dividend Leaders ETF will be managed by Bill Tilford head of Quantitative Investments, RBC GAM and his team of portfolio managers and analysts. Leveraging a rigorous, rules-based investment approach, the investment recognise companies with higher than average dividend yields, strong balance sheets, positive market sentiment and potential for future dividend growth. RBC ETFs head Mark Neill commented, “We believe that these new dividend ETFs provide a superior level of portfolio diversification, quality and value with access to some of the most attractive dividend growth opportunities available in the market.” Offering a diversified portfolio of individual Canadian investment grade corporate bonds, the RBC 15 Year Laddered Corporate Bond ETF delivers the potential for a steady stream of income.

6|Sutherland Insights Banking News Flash Jan 31, 2014

Finance ICBC to acquire 60% of Standard Bank’s unit for $770m January 30, 2014 | BBR Industrial & Commercial Bank of China (ICBC) has entered into an agreement to acquire nearly 60% stake of Standard Bank Group’s (SBK) SB Plc unit for approximately $770m, to strengthen its commodities and currency trading business. With an active global markets business in commodities trading including, foreign exchange, interest rates, credit and equity trading, SB Plc operates as a bank wholly owned by SBK through SB London Holdings Limited (SBLH). Prior to completion of the transaction, SB Plc will create all businesses not related to the global markets business, based on the terms of the agreement. After the completion of the creation and re-organization, SB Plc will become a bank dedicated to the global markets business, offering services to clients through its affiliates and operations in the London, New York, Singapore, Hong Kong, Dubai, Tokyo and Shanghai. Johannesburg-based Standard Bank has granted ICBC a five-year option to acquire an additional 20% stake in the London-based business. That option will begin two years after the deal is completed and if ICBC takes up the right, Standard Bank can require the Chinese lender to buy the remaining shares in SB Plc. ICBC chairman Jianqing Jiang said “By leveraging SB Plc’s global markets business platform, mature business model, and industrial expertise, this transaction will elevate ICBC’s global markets capabilities in business development, risk management, operations, and innovation in order to better serve our clients’ needs.” The transaction is expected to conclude following the approval of relevant regulatory authorities within and outside of China.

RBS likely to incur £8bn loss for full year 2013 January 28, 2014 | BBR

7|Sutherland Insights Banking News Flash Jan 31, 2014

Royal Bank of Scotland Group (RBS) is likely to sustain approximately £8bn loss for the full year of 2013, after the bank revealed that it required another £3.1bn for claims. The lender, which has incurred over £40bn of losses since its bailout in 2008, will face the loss during the current fiscal due to £2.9bn in conduct and mis-selling issues and £4.5bn from the creation of a mini-bad bank inside RBS. Commenting on the projected loss, RBS CEO Ross McEwan said, “The scale of the bad decisions during that period [the financial crisis] means that some problems are still just emerging. “Billions of pounds have been spent to resolve conduct and litigation issues in recent years. Costs on this scale were not predicted by anyone when RBS was rescued in 2008.” The bank said that it will allocate nearly £1.9bn to pay for fines and damages relating to mis-selling mortgage bonds in the US, and other penalties relating to market manipulation, further £650m of losses for mis-selling payment protection insurance (PPI). Additionally the UK lender will sustain £500m of losses for recompensing small businesses who were incorrectly sold interest rate hedging products and about £4.5bn of further losses on bad loans and investments, BBC reported. RBS chairman Philip Hampton commented, “RBS did suffer more than most banks in the crisis and these charges today represent an extra clearing-up of the mess that was created in the bank in the run-up to the financial crisis of 2008.” In 2008, the UK government bailed out RBS, and currently manages more than 80% of the bank.

Deutsche Boerse’s Clearstream to pay $152m over Iran sanctions violations January 24, 2014 | BBR Deutsche Boerse unit Clearstream Banking has agreed to pay $152m to the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) to resolve charges that the bank violated US financial sanctions on Iran. Luxembourg-based Clearstream was accused by the treasury department providing the Government of Iran with access to the US financial system. Clearstream allowed Central Bank of Iran to hold securities valued at approximately $2.81bn in a New York bank account, thereby violated the US sanctions against Iran, the Treasury said. OFAC Director Adam Szubin said, “Clearstream provided the Government of Iran with substantial and unauthorized access to the U.S. financial system.”

8|Sutherland Insights Banking News Flash Jan 31, 2014

“Today’s action should serve as a clear alert to firms operating in the securities industry that they need to be vigilant with respect to dealings with sanctioned parties, and that omnibus and custody accounts require scrutiny to ensure compliance with relevant sanctions laws.” During the investigation, the regulators found that Clearstream owned an account at a US financial institution in New York through which the CBI maintained a beneficial ownership interest in 26 securities during December 2007 through June 2008. Acting as an intermediary, Clearstream served as the channel through which the CBI held interests in these securities and transferred those interests later. Although Clearstream agreed to terminate its business with Iranian clients after meetings with OFAC officials in late 2007 and early 2008, it did not follow through with the decision. Instead, Clearstream transferred the above-mentioned securities entitlements free-of-payment (FOP) from the CBI’s account at Clearstream to a European bank’s newly opened custody account at Clearstream, which enabled the CBI to continue holding its interests in the securities through Clearstream’s omnibus account in the US. As per the terms of the settlement agreement, Clearstream is required to maintain policies and procedures that prohibit the recurrence of similar incidents in the future.

Morgan Stanley 2013 revenues increased to $32.4bn January 20, 2014 | BBR US-based investment bank Morgan Stanley has reported net revenues of $32.4bn for the full year of 2013, compared to $26.1bn during the comparable period earlier year. For the year ended on 31 December 2013, income from continuing operations applicable to Morgan Stanley stood at $3.1bn, or $1.43 per diluted share, against income of $138m, or $0.02 per diluted share last year. Institutional Securities reported pre-tax income from continuing operations of $1bn, versus a pretax loss of $1.7bn during the same a year ago, while net revenues for the current year stood at $15.4bn compared to $11bn a year ago. For the full year, the wealth management reported pre-tax income from continuing operations of $2.6bn compared to $1.6bn a year ago. Net revenues for the current year were $14.2bn against $13bn a year ago. Investment Management reported pre-tax income from continuing operations of $984m compared to $590m a year ago, while net revenues of $3bn rose $2.2bn a year ago, mainly backed by gains on investments in the merchant banking and real estate investing businesses.

9|Sutherland Insights Banking News Flash Jan 31, 2014

Morgan Stanley’s Tier 1 capital ratio under Basel I was approximately 15.7% and Tier 1 common ratio was nearly 12.8% at 31 December 2013.

JPMorgan Chase reports Q4 2013 net income of $5.3bn January 17, 2014 | BBR JPMorgan Chase & Co has reported net income of $5.3bn, for the fourth quarter of 2013, compared to net income of $5.7bn during the same period last fiscal. For the quarter period ended on 31 December, its revenue stood at $24.1bn, down by 1% compared with the prior year. Net income for full-year 2013 was $17.9bn, against $21.3bn during the corresponding period a year ago, while revenue for 2013 stood at $99.8bn. JPMorgan Chase & Co chairman and CEO Jamie Dimon said, “We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter. “We remained focused on building our four leading franchises, which all continued to deliver strong underlying performance, for the quarter and the year.” Consumer & Community Banking (CCB) net income was $2.4bn, up by 19%, compared with the prior year, due to lower provision for credit losses and lower noninterest expense, largely offset by lower net revenue. Corporate & Investment Bank (CIB) net income stood at $858m, down 57% compared with the prior year due to lower revenue and a lower benefit from the provision for credit losses, partially offset by slightly lower noninterest expense. Commercial Banking (CB) posted net income of $693m, flat compared with the prior year, reflecting an increase in noninterest expense and a higher provision for credit losses, offset by higher net revenue. Asset Management (AM) segment net income rose by 18% to $568m from the prior year, reflecting higher net revenue, largely offset by higher noninterest expense.

10 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

Technology Merchants Bank to deploy Jack Henry Banking’s core processing platform January 30, 2014 | BBR Merchants Bank has chosen Jack Henry Banking’s SilverLake System core processing platform for enterprise-wide automation. The mid-tier lender, which has over $1.7bn in assets, will deploy SilverLake through Jack Henry Banking’s outsourced offering, JHA OutLink Processing Services. Merchants Bank senior operations officer Zoe Edrman said that the bank needed more sophisticated core capabilities, access to more fully integrated complementary solutions, and a true technology and business partner rather than a vendor. Merchants Bank COO Geoff Hesslink said, “Considering the inherent and growing challenges of inhouse processing, we also decided our conversion to a new core system was the ideal time to move to an outsourced processing environment. “Outsourcing our information and transaction processing to Jack Henry Banking will enable us to strategically focus on serving our customers and growing our business rather than managing a complex datacenter and dynamic technology.” Jack Henry Banking offers integrated computer systems for banks and currently serves more than 1,300 banks as a single source for integrated, enterprise-wide automation.

Bank of Scotland delivers a secure ‘three click’ mobile banking login January 27, 2014 | BBR Bank of Scotland has delivered an innovative ‘three click’ Mobile Banking login that allows customers to securely access Mobile Banking on the go, without the need to remember a set of lengthy login credentials. Its new next generation app - launched today for customers who use their iPhone and Android phones for mobile banking - will provide a faster and more secure mobile service to customers designed for busy people on the go.

11 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

The first time customers use the new app, they will ‘register’ their device. This registration process links the customer with the app and their phone. This means that only that customer on that particular handset can login. Because of this extra level of security, customers will only need to enter three random characters from their Memorable Information (MI) to log in. While some other banks use a five or six digit PIN, Bank of Scotland customers don’t need to create or remember anything new, as they can use their existing MI to log in. Bank of Scotland’s threecharacter express login is so secure that each time a customer logs in, they will be asked for a different combination of characters from their MI. With this additional security, Bank of Scotland customers can make payments to anyone, including companies, with the same transaction limits as in Internet Banking. Due to the increasing number of customers now accessing mobile banking, it’s important that Bank of Scotland continues to expand the range of banking services its customers can access on their mobile device, so they can bank on the go. Available through the Apple App Store and Google Play Store, the next generation app will provide: Three click secure login - quick access to balance and transaction history Full transaction history - ability to swipe and view all transactions Enhanced design - improved look and feel and straightforward navigation to key features Payments - hassle free payments to anyone with full transaction limits. Branch and cash machine finder - find your nearest cash machine, including directions Robin Bulloch, Managing Director, Bank of Scotland Community Bank said, “At Bank of Scotland we continue to invest to make sure we can serve our customers’ everyday needs. Our branches and network of mobile branch services are vital in our supporting of communities across Scotland, however as the use of smartphones increases, more customers now have the option to bank on the go. “We’ve listened to what our customers want from their mobile banking experience and are delighted to introduce the ‘three click’ login. Using this new next generation app, customers will find mobile banking faster, easier and very secure.”

Nedbank to deploy Oracle FLEXCUBE to improve customer experience January 24, 2014 | BBR Nedbank Limited, a banking group based in South Africa, is planning to migrate on Oracle FLEXCUBE to modernize its infrastructure, consolidate business operations and boost operating efficiency as well as to customer service delivery.

12 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

Nedbank Limited chief information officer Fred Swanepoel said, “We will be consolidating our operations across the region by leveraging the capabilities of Oracle FLEXCUBE and experience the team has in delivering the projects in Africa.” “When we are complete with the migration from our existing application to FLEXCUBE we will have a common operating platform in the 35 countries of EcoBank Nedbank alliance, the largest banking network in Africa.” Oracle FLEXCUBE will be implemented to create a single operating platform for its multi-country operations across five South African countries, including Lesotho, Malawi, Swaziland, Namibia and Zimbabwe. Nedbank Limited, as a member of Africa’s largest banking network, planned to better align its infrastructure with the alliances’ 1,500 branches across 35 nations, which already use the Oracle FLEXCUBE, thereby forming a common business platform to better serve customers across Africa. Oracle Financial Services.CEO and MD Chet Kamat commented, “Oracle FLEXCUBE enables NedBank to achieve its goals for consolidation to the bank and also enables NedBank to design products, test the same before launching them across the countries from its facility in South Africa.” Nedbank with more than $70bn in assets provides an array of financial services, including wholesale and retail banking, insurance, and asset management.

Aequitas to build new stock exchange and private securities platform in Canada January 20, 2014 | BBR Aequitas Innovations is planning to establish a new Canadian stock exchange, as well as a centralized platform for private securities that will concentrate on capital raising and liquidity for small and midsized issuers. The exchange application will be based on the features Aequitas published in 2013, such as various amendments that resulted from an extensive dialogue and a comment process initiated by the Ontario Securities Commission (OSC). Aequitas Innovations CEO Jos Schmitt said that the company is very enthusiastic to begin building its new solutions for Canada’s capital market, as it believes they will be true game changers. “We are very thankful to the industry and the regulators for all their feedback,” Schmitt added. “Their engagement led us to a series of amendments which will allow us to even more effectively deliver on our mandate to build innovative solutions, create meaningful choice and competition, enhance market fairness by curbing predatory high frequency trading, and address capital raising issues.”

13 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

All founding shareholders of Aequitas, which includes Barclays, BCE, CI Investments, IGM Financial, ITG Canada, OMERS Capital Markets, PSP Public Markets and RBC Dominion Securities, have approved the Aequitas business plan and the decision to proceed with the amended offering. After filing of the Aequitas Exchange Application with the OSC during the first quarter of 2014, the stock exchange plans to launch its services over the first half of 2015.

Wirecard adds BLE technology into its mobile wallet platform January 17, 2014 | BBR Wirecard, a Munich-based e-commerce technology provider, has added Bluetooth Low Energy (BLE) technology into its mobile wallet for wireless payments. The new Bluetooth BLE Smart Payment technology is the third contactless payment standard to be supported by Wirecard’s mobile solutions, while the other two contactless payment standards include NFC and QR code. Offering location-based services using micro transmitters (“beacons”), BLE can be used to transfer data at distances of up to 10m. The new technology is compatible with Apple, Google and Windows smartphone operating systems, claims the technology firm. Leveraging BLE, the Wirecard Mobile Wallet directly communicates with the point-of-sale (POS) system, which allows it to provide various types of services that add value for customers in the fields of loyalty, vouchers and personalised offers. Wirecard CEO Markus Braun said, “Wirecard has become a leader in Europe for mobile payment because it reacts quickly and flexibly to new technologies.” “Bluetooth low energy will set a new standard for vouchers, loyalty and payment.”

14 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

Strategy RBC plans to divest Jamaican banking operations January 30, 2014 | BBR Royal Bank of Canada (RBC) has reached an agreement to divest RBC Royal Bank (Jamaica) and RBTT Securities Jamaica (collectively “RBC Jamaica”) to Sagicor Group Jamaica. RBC Caribbean CEO Suresh Sookoo said that the bank strategy of being a competitive leader in the markets, it determined that the best decision for the long-term future success of RBC Jamaica was to sell it to Sagicor. “Sagicor is a well established financial franchise in Jamaica with the size, scale and complementary capabilities that RBC Jamaica does not currently possess,” Sookoo added. RBC personal & commercial banking group head Dave McKay said, “This transaction will allow us to successfully reposition our Caribbean business for the future and focus on regions where we have significant market share.” The transaction, whose financial terms remained undisclosed, is subject to customary closing conditions, including regulatory approvals and is likely to be finalized in the coming months. The purchase price for RBC Jamaica was roughly the book value of the assets and the Canadian lender expects to lose C$60m ($54m) from the transaction, partly because of a goodwill writedown. With approximately 79,000 employees, RBC serves over 15 million personal, business, public sector and institutional clients through offices in Canada, the US and 44 other nations across the globe.

Global Payments agrees to acquire PayPros January 27, 2014 | BBR Global Payments (GPN), a payment technology provider, has reached an agreement to buy California-ba Payment Processing (PayPros), in a $420m cash transaction. PayPros, as a fully integrated payment solutions provider, delivers its products and services through a network of over 1,000 technology-based enterprise software partners, for 58,000 small-to-medium sized merchants across the US.

15 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

Global Payments president and CEO Jeffrey S Sloan said, “Our acquisition of PayPros will expand our direct distribution, add new vertical markets, accelerate growth in our largest geography and further enhance our existing integrated solutions business with the addition of PayPros’ talented team.” PayPros president Eddie Myers commented, “The strength of Global Payments’ distribution combined with our differentiated service offering will accelerate value delivery to our partners and provide opportunities for growth over the long-term.” The transaction is expected to conclude by the end of Global Payments’ 2014 fiscal year, subject to regulatory approvals and customary closing conditions. Global Payments offers payment-processing services for merchants, value added resellers, financial institutions, government agencies, multi-national corporations and independent sales organizations in North America, South America, Europe and the Asia-Pacific region.

EVO and ReD sign strategic partnership to provide international fraud solution January 24, 2014 | BBR EVO Payments International (EVO), a payment service provider, and ReD, a provider of fraud prevention services, have formed a global strategic partnership to deliver a powerful, fully integrated international payments fraud solution to existing and future EVO ecommerce merchants. The partnership will leverage ReD’s expertise in providing fraud solutions for all payment types and channels present in every part of the payments value chain, to deliver real-time fraud prevention capabilities to EVO’s ecommerce merchants across all of EVO’s geographic and vertical markets, including retail, hospitality, gaming, and financial services. ReD’s solution incorporates ReD Shield, a real-time, online fraud prevention solution tailored to the requirements of major ecommerce merchants, reducing payment fraud and the need for costly manual reviews. Prior to entering into this strategic partnership, ReD previously provided fraud prevention tools and services to Deutsche Card Services, a payments provider which EVO acquired in 2013, and ReD continues to support these merchants in Europe. “As a natural outgrowth of our continued international expansion, it is critical for EVO to partner with service providers who are able to deliver leading solutions across EVO’s geographic markets and verticals,” said James Kelly, Chief Executive Officer of EVO Payments International. “As a truly global ecommerce fraud solutions provider, ReD is a perfect fit for our organization and, more importantly, our merchants and partners.” “We are excited about the opportunity to provide a payments and ecommerce fraud solution to EVO’s clients across the globe,” said ReD Chief Executive Officer, Paul Stanley. “Our solution is

16 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

tailored to the unique requirements of individual ecommerce merchants, and our ability to work with merchants and partners of all sizes is crucial to our offering.”

East West Bancorp closes MetroCorp Bancshares acquisition January 20, 2014 | BBR East West Bancorp, parent company of East West Bank, completed the acquisition of MetroCorp Bancshares, parent of MetroBank, and Metro United Bank. MetroCorp operates 18 branches under its two subsidiary banks, MetroBank and Metro United Bank. MetroBank operates 12 branches in Houston and Dallas, and Metro United Bank operates 6 branches in Los Angeles, San Francisco and San Diego. As of December 31, 2013, MetroCorp had total assets of $1.62 billion, total loans of $1.22 billion, total deposits of $1.34 billion and total equity of $179.2 million. The final consideration paid in the acquisition of MetroCorp was $268.0 million, comprised of 5.6 million shares of East West Bancorp common stock and $89.3 million in cash. Under the terms of the merger agreement, announced September 18, 2013, MetroCorp shareholders are receiving two thirds of the merger consideration in East West Bancorp stock and one third in cash. This translates to 0.2985 shares of East West Bancorp stock and $4.78 in cash per MetroCorp shareholder, subject to cash in lieu of fractional shares. “We are pleased to welcome the customers and employees of MetroCorp to the East West family and are excited about the growth opportunities our expanded presence in Texas will provide us,” said Dominic Ng, Chairman and Chief Executive Officer of East West. “We look forward to offering our full range of products and services to our new customers and we anticipate the seamless integration of MetroCorp with East West.” George M. Lee, who had served as Co-Chairman, President and Chief Executive Officer of MetroCorp will now serve in a Senior Advisor role at East West. Lee stated, “We are excited to be part of East West. We believe that the in-depth knowledge we have of the Texas market combined with the strength and scale East West offers will be beneficial to MetroCorp’s employees, customers and shareholders.”

RCS Capital agrees to acquire Cetera Financial Group January 17, 2014 | BBR

17 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

RCS Capital has entered into an agreement to acquire Cetera Financial Group (“Cetera”), a leading independent broker-dealer headquartered in El Segundo, CA, from Lightyear Capital for $1.15 billion in cash, subject to certain customary adjustments. Following this transaction, Cetera and its subsidiaries will become part of RCAP’s retail advice platform, complementing the recently announced acquisitions of Summit Brokerage Services and Investors Capital Holdings. Valerie Brown, President and Chief Executive Officer of Cetera, and her management team, will continue to operate Cetera’s respective brands as part of the RCAP family of companies. Nicholas S. Schorsch, Chairman of RCAP commented, with regard to working with Lightyear Capital on this transaction: “I have great respect for the fantastic work Lightyear and their executive team achieved in building value at Cetera. It has been great working with Don Marron, Chairman, and the management group at Lightyear and we are excited to have the opportunity to build on their success as we craft the next iteration at Cetera.” Mr. Schorsch further commented: “Our partnership with Valerie, her senior management team and all of the financial advisors across the U.S. who have chosen to associate their practices with Cetera, represents for us a truly transformative event. We intend for RCAP to be the most important fullservice financial services and securities distribution company in the industry by joining our financial advice practice, wholesale distribution and capital markets expertise, and continuously executing on these strategies through our transaction management group. Furthermore, it is our plan to rapidly build out our footprint across America in one seamless step with our family of independently operated retail firms, led by Cetera.” William M. Kahane, CEO of RCAP, added: “This transaction immediately affords us the benefits of scale, while setting the quality standard in the industry. It enables us to diversify our revenue streams and position our securities sales business to attract best-of-class third-party sponsors, thus mitigating concentration risk among our retail firms. It adds substantially to our assets under administration, and makes our overall enterprise uniquely attractive to other retail advice firms who believe they could benefit by aligning themselves with a dominant, well capitalized, public firm with a complete understanding of the industry and a demonstrated commitment to excellence.” Formed in 2010 following the sale of three ING broker-dealers, Cetera is a financial services holding company that provides independent broker-dealer services and investment advisory services through four distinct independent broker-dealer platforms: Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions and Cetera Financial Specialists. With approximately 6,660 registered representatives across the United States, Cetera will enable RCAP to grow its retail distribution footprint. In addition, the acquisition of Cetera further demonstrates RCAP’s continuing commitment to building an integrated, best-in-class, full-service platform dedicated to meeting the needs of the retail investor. Cetera’s inclusion within RCAP’s retail advice business line both complements and diversifies RCAP’s revenue stream, which presently is derived from its wholesale distribution business, investment banking and capital markets services, transaction management and transfer agency lines of business.

18 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

Michael Weil, President of RCAP observed: “RCS Capital is both pleased and excited to begin this journey with Valerie Brown, CEO of Cetera Financial Group, and the Cetera family. We are pleased because, under Valerie’s leadership, Cetera has carefully constructed one of the premier financial services firms in the country. We are excited because the combination of Cetera, under Valerie’s continuing stewardship, RCAP Holdings’ First Allied Securities under Adam Antoniades’ leadership and the upcoming additions of Investors Capital Holdings and Summit Financial Services, presents in our view the single greatest opportunity to continue to create positive changes in the independent broker dealer industry, bring meaningful benefits to our nearly 9,000 combined advisors, and provide a better level of service to our 2.5 million investors. Our success across business lines has always been a function of the human capital that drives these businesses. Having Valerie, her senior management team, her broader organization, and Cetera’s advisors join RCS Capital substantially advances and accelerates our announced plan to become the dominant full-service, investment bank and securities sales firm in the industry.”

19 | S u t h e r l a n d I n s i g h t s B a n k i n g N e w s F l a s h J a n 3 1 , 2 0 1 4

Sutherland insights banking news flash jan 31, 2014  
Sutherland insights banking news flash jan 31, 2014