Business

Deutsche Bank used big trades to raise cash in March turmoil: Sources

As banks came under mounting pressure in March, Deutsche Bank used big trades to give its cash buffers a temporary boost, employing a method that European regulators have raised concerns over, two sources familiar with the situation said.

Deutsche swapped billions of euros in securities for cash and government bonds, the sources told Reuters, which count towards its liquidity coverage ratio (LCR). This is meant to determine the extent of a bank’s access to ready cash to fund outflows such as depositor withdrawals.

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While a legitimate banking practice, the move underscored concern at Deutsche over the wider turmoil. Having a large cash pile would have reassured investors and clients after Credit Suisse and a number of US banks suffered deposit runs.

The trades caught the attention of European Central Bank (ECB) supervisors, who questioned Germany’s largest lender about them during routine exchanges, the sources said.

Even without the trades, Deutsche would have far exceeded a 100 percent LCR regulatory requirement and overshot its own target, the sources said, adding that its liquidity is not a concern.

The important thing for the ECB, they said, is to establish how much liquidity a bank has at that given moment, as well as what it plans on having in the following months.

The issue is that liquidity can evaporate if short-term trades are not renewed, clouding the longer-term view.

“These things can shift around very quickly but as a supervisor I would be worried if they were doing this at the end of quarter, just to look nicer, and I would want to look into it,” said Thorsten Beck, Director of the Florence School of Banking and Finance and a co-chair of the Advisory Scientific Committee of the European Systemic Risk Board.

Deutsche’s use of such trades to improve its liquidity position at the height of the recent banking turmoil has not been previously reported and conversations with the regulator are confidential.

The practice is not unusual among big banks, but it was flagged by the ECB in a 2019 stress test as a technique for making a bank look stronger.

Deutsche’s trades allowed it to post an increase in its LCR in March, helping chief executive Christian Sewing praise the bank’s “resilience” and “solid foundation” to analysts when presenting the first-quarter figure in April.

Deutsche “actively manages to a conservative liquidity profile across a number of liquidity metrics,” a spokesperson told Reuters. Its liquidity level reflects “prudent steering in an uncertain market environment” and the late March increase was “mainly driven by seasonal movements,” they added.

An ECB spokesperson declined to comment.

‘Solid foundations’

March was a tense period for banks. Days after Switzerland engineered the rescue of Credit Suisse, Deutsche’s customers began withdrawing deposits, its executives later said, while shares in the bank dropped as much as 15 percent on a single day.

One concern in the market at the time was whether banks had enough cash on hand to meet the demands of depositors. Euro zone banks are required to have an LCR of at least 100 percent, meaning they have enough liquid assets to cover a month’s worth of outflows.

Deutsche’s trades helped it raise its LCR to 143 percent at March 31, its first-quarter earnings report published in April showed.

The figure stood at 137 percent on March 23, it had reported in a filing at the time, in an unusual move meant to calm markets.

The sharp increase came as a surprise, however, after Deutsche said in February that it would steer the LCR ratio lower towards its 130 percent target during the year.

Such short-term fixes, which generate big LCR moves, are likely to raise fresh questions from regulators and analysts about the reliability of requirements introduced after the global financial crisis of 2008.

Credit Suisse said it had an LCR of around 150 percent, calculated using a three-month average, less than a week before being declared non-viable by Swiss authorities and taken over by UBS.

One source said that if there is one thing that the ECB had learned from the rapid demise of Credit Suisse is that the LCR is an unreliable indicator as deposits can disappear overnight.

The 2019 ECB stress test on liquidity found that a number of banks were using “collateral swaps aimed at improving the quantity (or) quality of the LCR buffer.”

One weakness the ECB found then was that a number reported a “pronounced” liquidity drop after day 30, which may result from ‘optimization’ strategies.

It also said that the strategy had become a source of “interconnectedness among banks,” which regulators see as a source of systemic risk for the sector.

Hans-Peter Burghof, a professor of banking and finance at Germany’s University of Hohenheim, said the debate about the usefulness of liquidity metrics has been going on for decades.

“Trust can’t be measured with numbers,” he said. “If I were a regulator, I would hate it,” Burghof added of practices such as banks raising their LCRs using swaps and other trades.

Business

Almarai signs multiple agreements to localize jobs through training and recruitment programs

Almarai signed a cooperation memorandum with the Food Industries Polytechnic, the
Transport General Authority, and the Saudi Logistics Academy to localize jobs in the
food and beverages sector through training and rehabilitation programs ending in
employment. This came within the first international conference on the labor market,
organized by the Ministry of Human Resources and Social Development on 13 – 14
December 2023 at the King Abdulaziz Convention Center in Riyadh.

‘These agreements are part of Almarai’s corporate program for the social responsibility
to achieve localization in the food industry sector, which is one of the top priorities of the
comprehensive strategic plans in Almarai, especially since the company is one of the
largest working environments in the kingdom, with more than 9,000 Saudi employees,
including more than 900 Saudi female employees.”Fahad Aldrees, Chief Human
Resources Officer of Almarai, said.

He added that the agreements signed to train and qualify young people are part of the
integrated initiatives and training and rehabilitation programs for national human
resources in Almarai. He pointed out that the company provided about half a million
employee training hours during 2022, raising its retention rate to 90% during 2022.

It is worth mentioning that Almarai is the world’s largest vertically integrated dairy
company, and the largest food and beverage producer and distributor in the Middle
East. Almarai was ranked among LinkedIn’s top 15 Saudi companies for professional
career development for 2022.

Business

SEBA Bank rebrands to AMINA Bank and continues to write its success story

a fully licensed Swiss crypto bank, announced today its new brand identity: AMINA Bank AG. The group operates
globally from its regulated hubs in Zug, Abu Dhabi and Hong Kong, offering its clients traditional and crypto banking services.
SEBA Bank made history in 2019 by becoming one of the first FINMA-regulated institutions to provide crypto banking services. This rebrand marks a new chapter for the company, which has proudly been in operation for more than four years. AMINA Bank is inspired by the same trailblazing ambition to lead the way for its clients and to write its own future as a Swiss-
regulated crypto bank offering services to its traditional and crypto savvy clients around the globe. The name ‘AMINA’ stems from the term ‘transAMINAtion’, meaning transference of one compound to another. AMINA is a brand driven by perpetual change, bringing together the various ‘compounds’ of traditional, digital, and crypto banking to unlock new potential and
growth for our clients. This vision of change represents the transformation of our clients’ financial future. Franz Bergmueller, CEO of AMINA, said: “We are delighted to introduce the world to our new brand identity. While we say goodbye to the SEBA name, we remain forever proud of the achievements made by the group under the former brand. “Our brand signifies a new era in the company’s growth and strategy; we are a key player in crypto banking and are here to define the future of finance. With our client-focused approach, our years of traversing traditional and crypto finance, we offer a platform for investors to build
wealth safely and under the highest regulatory standards.” “We are grateful to be encouraged by our supportive and committed investors who have been very helpful, supporting the growth of the company. We thank our employees in all the regions
for their dedication and client focus. As we look forward to 2024, our ambition is to accelerate the growth of our strategic hubs in Switzerland, Hong Kong, and Abu Dhabi, and to continue our global expansion, building on all the successes we have laid down over the past years.” Current clients of AMINA Bank (formerly SEBA Bank) will be unaffected by the rebrand other than encountering the new name; all operations will be business as usual across the board. The branch office based in Abu Dhabi and the subsidiaries in Hong Kong and Singapore will subsequently apply for a name change to align with the head office in Zug.

Business

Uptime Appoints Mustapha Louni Chief Business Officer

Uptime Institute is pleased to announce the appointment of Mustapha Louni to the position of Chief Business Officer, a role specifically created to drive strategic leadership and client success. In this new role, Mr. Louni will assume responsibility for the global Uptime sales and marketing organizations and drive overall business value for all Uptime clients. He will retain his existing responsibilities overseeing operations in the Middle East, India, Africa, and the Asia Pacific regions. In this elevated capacity, Mr. Louni is poised to play a pivotal role in driving Uptime’s next phase of global expansion through strategic initiatives to enhance market awareness of the dramatically expanding global service lines and delivery capabilities of Uptime that uniquely support the global data center industry in its pursuit of ever higher performance through elevated availability, resiliency, sustainability, and cyber-security of digital infrastructure. Louni’s appointment renews and expands Uptime

Institute 39;s 30-year commitment to advancing excellence in the data center sector on a global scale. “Today we are experiencing the next phase of the one-time, planetary transformation from analog to digital. This unprecedented, once-in-a-generation growth in data center demand is primarily driven by continuing cloud adoption, the new promise of AI, and the demonstrable fact
that hybrid digital infrastructure is here to stay for the foreseeable future,” said Martin McCarthy, CEO, Uptime Institute. “These complex and nuanced market demands require a visionary talent like Mustapha Louni. He is someone who cannot only deftly manage specific aspects of the business but also remain ahead of accelerating changes and trends. He continues to earn client
trust and respect by timely delivery on demanding commitments while he also inspires and energizes colleagues and clients alike. I am delighted to announce Mr. Louni’s new position and know that he will continue to expand the impact that he has already brought to Uptime since his arrival.” In 2014, Mr. Louni joined the Uptime organization in the United Arab Emirates, leveraging his extensive experience from roles at Panduit and Schneider Electric in Paris and Dubai. As the company’s first commercial resource in the Middle East and Africa region, Mr. Louni played a pivotal role in expanding Uptime’s presence. Within a year, he successfully established what became and remains Uptime’s fastest growing regional office. Under his leadership, Uptime has
extended his impressive trajectory of growth in MEA to the Asia-Pacific regions, augmenting the Uptime workforce with dedicated team members spanning more than a dozen countries across these regions. A new Uptime office has been inaugurated in Riyadh, Kingdom of Saudi Arabia (KSA) this year, further fortifying the company’s ability to meet its commitment to sustained
growth and excellence and serve clients in critical, accelerating markets for digital infrastructure.

Uptime Institute began development of its proprietary and now globally recognized Tier Standards and its Tier Certifications 30 years ago to ensure that the mission critical computing needs of all organizations could be met with confidence and understood by executive management. Since that time, Uptime Tier Certification as well as other Uptime offerings including assessments and awards in digital infrastructure for ensuring business performance in areas of management and operations, risk and resilience, sustainability, and more recently cyber- security have gained global adoption. Uptime’s expanding success is based on delivering a
unique business service that is based upon unparalleled engineering excellence and technical mastery, while remaining vendor independent and technology agnostic.