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Citi's Lava Plans Web Forex System eFunds Revenue Up But Earnings Down 4 Banks Sign to Use Fundtech's PAYplus
Citi's Lava Plans Web Forex System
A Citigroup Inc. subsidiary plans to offer Internet foreign-exchange trading to the interbank market through a hosted system rather than dedicated hardware terminals.
The subsidiary, Lava Trading Inc. of New York, announced the plan late last month. David Ogg, the chief executive of its LavaFX unit, said the system will go live this year.
Lava will challenge the current providers, in the interbank market, the British companies EBS Group Ltd. and Reuters PLC, Mr. Ogg said.
"Banks are looking for alternatives," he said. By using the Internet "we can afford to go places were it would not be cost-effective to have people on the ground" to install and service terminals.
Lava will handle trading in odd amounts and will enable banks to use blind systems that mask their identity and key details to avoid setting off market-moving rumors when shopping large currency positions, Mr. Ogg said.
At least three "major banks" have committed themselves to using the system, he said. He would not say whether Citi is among them.
Citi, a large foreign-exchange bank, provides liquidity to a number of electronic markets, including its own CitiFX, which it offers as CitiFX White Label to other banks for their corporate customers. In addition it participates in the multibank exchange FXAll, State Street Corp.'s FX Connect, and the independent exchange Currenex Inc.
Citi also is a shareholder in EBS, which agreed in April to be acquired by ICAP PLC, which calls itself the world's largest interdealer broker.
"We are very keen to see the launch of Lava's interbank platform," said Gavin Wells, the managing director and global head of spot trading at Citibank, in Lava's press release. "With its array of sophisticated functions and innovative features, it will undoubtedly have a very positive impact on the FX marketplace."
eFunds Revenue Up But Earnings Down
eFunds Corp., a provider of electronic payment software and services, said higher costs in its electronic payments business drove down first-quarter profits despite an increase in revenue.
The Scottsdale, Ariz., company reported net income of $10.7 million, or 23 cents per share, down 10.1% from the same quarter last year. Revenue rose 22%, to $139.7 million
The results, announced Wednesday, included a $3 million operating loss in WildCard Systems Inc., the prepaid-card business that eFunds acquired last July. eFunds said that loss reflects seasonal trends in the prepaid card industry and the ongoing expenses of integrating the company.
eFunds reaffirmed its full-year guidance of $1.15 to $1.25 per share and said it expects revenue growth to be at the low end of its earlier forecast of 12% to 15%.
4 Banks Sign to Use Fundtech's PAYplus
Fundtech Ltd. said four banks have signed up to use its PAYplus USA interface to connect to Bank of New York Co. Inc.'s Persutte - Global F.A.S.T. DirectPay service for international payment processing.
Fundtech, of Jersey City, provides banking software for corporate cash management and foreign exchange.
Alphonse J. Briand, a managing director in its global payments and trade services unit, said one of the Fundtech users, EverBank Financial Corp. of Jacksonville, Fla., is a newcomer to the Persutte service.
The others - Astoria Financial Corp. of Lake Success, N.Y.; Mid-State Bank and Trust of Arroyo Grande, Calif.; and Sterling Financial Corp. of Spokane - are clients of both Bank of New York and Fundtech, Mr. Briand said in an interview Friday.
