FinTech Futures: Top five news stories of the week – 9 February 2024
Here’s our pick of five of the top news stories from the world of finance and tech this week, featuring Worldline, Barclays, Deutsche Bank, and more.
Deutsche Bank to cut 3,500 roles over two years amid €2.5bn savings drive
Frankfurt-headquartered Deutsche Bank expects to cut approximately 3,500 roles over the next two years as part of its ongoing €2.5 billion operational efficiency programme.
The cuts are expected to be applied to the bank’s “non-client-facing areas” as it looks to streamline its business in Germany and lower its annual total operating cost to €20 billion by 2025.
With this, it’s also set to decommission certain applications and install “simplified workflows and automation” and a “front-to-back process redesign” as part of wider efforts to optimise its infrastructure and technology.
The bank reported a pre-tax profit of €698 million in Q4 2023 – down 10% on Q4 2022.
Old Mutual signs for 10x Banking core, igniting vendor’s African expansion
Core banking solution provider 10x Banking has successfully landed its first client in Africa – Old Mutual, the continent’s second-largest financial institution.
The vendor says Old Mutual, which is headquartered in Sandton, South Africa, will leverage its Software-as-a-Service (SaaS) core banking system to “serve those who have bank accounts but are severely underserved, with their day-to-day money management needs not met by what’s currently available”.
The group currently offers a broad range of financial services, including retail and corporate banking, asset management and insurance services, and operates across 14 markets across Africa and Asia.
For 10x Banking, the agreement boosts its continued efforts to grow beyond its native UK market following its expansion into Australia and New Zealand in July last year.
Barclays acquires Tesco Bank for £600m
Barclays Bank has announced a deal to acquire the retail banking business of UK supermarket giant Tesco for £600 million.
The deal will see Barclays take over Tesco’s banking operations in loans, credit cards and customer savings and deposits. The bank has also entered into an exclusive long-term partnership to offer Tesco-branded credit cards, personal loans and deposits.
Around 2,800 Tesco Bank employees, including its senior management, will also move to Barclays.
Commenting on the deal, Ken Murphy, Tesco Group chief executive, says that the transaction will “significantly reduce our financial liabilities, in turn strengthening our balance sheet and allowing us to focus on continuing to grow our core retail business”.
Chase plans to open more than 500 new branches and hire 3,500 staff by 2027
US banking heavyweight Chase has announced that it plans to open more than 500 new branches and renovate more than 1,700 existing locations across the country by 2027 as part of a “multi-billion dollar commitment” to provide greater access to banking.
Chase, the consumer and commercial banking enterprise of JP Morgan Chase, predicts the move will create more than 3,500 jobs and will boost “local economic growth through construction, ongoing community investments and local hiring”.
It hopes the creation of new branches will open up new markets for the bank, with a particular focus on servicing areas of “low-to-moderate income and rural communities with little access to traditional banking services”. Chase currently claims to serve nearly 80 million customers.
Worldline to cut workforce by 8% with €200m cost-saving initiative Power24
Paris-listed payments firm Worldline is to cut its global workforce by “approximately 8% maximum” in an effort to realise €200 million in run-rate cost savings.
The cuts are expected to result in the termination of around 1,400 positions and form part of the group’s “post-integration transformation ambition” named Power24, which launched this week.
The initiative has also resulted in the termination of “specific merchants’ relationships whose associated costs and potential risks did not match our revised requirements”, Worldline says.
Speaking on the formation of Power24 last October, Gilles Grapinet, CEO of Worldline, said the group is “ready to enter into a new phase of our company journey ready to unleash the power of our combined assets, and to make Worldline more agile to boost its growth potential”.