Category: Finance

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  • UBS’ Insourcing Revolution Shakes Cognizant

    UBS’ Insourcing Revolution Shakes Cognizant

    Outsourcing giant Cognizant has had to let dozens of staff in Switzerland go as UBS continues its policy under CEO Ralph Hamers of bringing entire IT departments back in-house. Both the major Swiss banks, UBS and Credit Suisse are long-standing Cognizant customers. UBS used to pay Cognizant up to $330 million a year for IT services and business process outsourcing. Credit Suisse spends around $220 million a year with Cognizant Services, $100 million of it in Switzerland.

    The major IT consultancy and outsourcing companies make immense amounts of money from the financial sector, and U.S.-based Cognizant, one of the sector’s top companies globally, has sales of $5.6 billion to the finance sector, a good third of its total turnover.

    However, the relationship between UBS and Cognizant has been turning frosty in recent years, and in Switzerland there has been a falling out. UBS last year elected not to renew a service contract, with effect from the end of April. This meant that at a stroke Cognizant lost half of its business with UBS – around $60 million worth.

    As a result, Cognizant faced making 70 to 80 consultants working for UBS redundant. The company had had up to 200 staff under contract to UBS. The bank took on around a third of them and another third were taken on by other IT services companies such as Epam and Infosys.

    Neither Cognizant nor UBS would comment on the termination of the contract.

    Two separate said there were two reasons for UBS dropping Cognizant. In May 2020 the U.S. company was the victim of a ransomware attack that wrecked its efforts to provide IT services from home offices.

    UBS then canceled its global contract for several years of IT services early, with effect from the end of April this year, on security concerns. The second reason is UBS’s tendency over the last few years to take IT services back in-house.

    In 2018, the bank unilaterally canceled its long-standing partnership with Cognizant in India. UBS sold its «India Service Center» with around 200 staff to Cognizant in 2009 and at the same time signed a contract for several years of services, which was first of all not extended and then canceled entirely.

    Competition between outsourcing vendors is extremely fierce and the pressure on prices is enormous. UBS constantly beat Cognizant and other IT service providers down on price.

    Mike Dargan, who became UBS’s chief information officer in 2016, reversed the bank’s strategy of outsourcing. The massive acceleration in innovation and digitalization in the financial sector forced Dargan to the conclusion that IT development and services should be dealt with by in-house departments in order to keep up.

    Chris Gelvin, a UBS veteran who has been head of group operations since 2018 and was in January this year also appointed chief transformation officer, is responsible for implementing this strategy.

    In the meantime, Dargan has risen within the ranks of top management to become COO as well as chief digital and information officer. The step-by-step ending of the vendor contracts and the in-housing strategy are completely in line with Hamers’ thinking.

  • Deloitte Hands Over 1MDB Settlement to Malaysia

    Deloitte Hands Over 1MDB Settlement to Malaysia

    The latest chapter of the Malaysian government’s asset recovery efforts follows effective settlements recently achieved.

    The Malaysian government has received a remittance from Deloitte totaling RM336 million ($80 million) in relation to 1Malaysia Development (1MDB) matters, the country’s finance ministry said on Thursday.

    The auditor, the first to face penalties related to the scandal-ridden fund, was fined in 2019 for breaches related to a bond issuance by 1MDB.

    To date, the country has received RM16.386 billion of seized and repatriated 1MDB funds into its Trust Account, which is used primarily to repay and service 1MDB and subsidiary SRC’s remaining debts, the statement said.

    It is currently awaiting RM2.83 billion from local lender Ambank, and is currently in settlement negotiations with another auditor, KPMG.

    Last month, the Malaysian government filed civil suits against multiple domestic and global entities including J.P. Morgan, Deutsche Bank and Coutts, with the aim of recovering about RM96.6 billion ($23 billion) that the government says are linked to the fund.

  • HSBC Names Top Investment Banker in Hong Kong

    HSBC Names Top Investment Banker in Hong Kong

    The bank has landed a permanent replacement for Peter Enns, its former co-head of advisory and investment banking and advisory.

    HSBC is hiring veteran banker Matthew Ginsburg as global co-head of its advisory and investment banking business, based in Hong Kong, according to a report on Friday, citing people familiar with the matter

    Ginsburg, who was most recently Asia Pacific chairman for Fitch Ratings, is no stranger to the region, having been based in Hong Kong since 1992. He spent stints at Morgan Stanley and Barclays, where he led the British lender’s investment banking expansion across the region.

    Ginsburg will work closely with co-head Adam Bagshaw in the role. Enns relocated with HSBC to Hong Kong in 2020, but left soon after for Chubb, where he is chief financial officer.

  • Chinese E-Brokerages Unveil Crypto Trading Plans

    Chinese E-Brokerages Unveil Crypto Trading Plans

    Two Chinese online brokerages backed by major tech titans shared plans about expanding into crypto trading in the midst of a domestic crackdown.

    Tencent-backed Futu and Xiaomi-backed Tiger Brokers both unveiled crypto trading plans in their latest quarterly earnings call.

    Tiger Brokers said it was in the process of applying for relevant licenses for crypto trading without naming any markets.

    Futu senior vice president Robin Li Xu said the firm was applying for crypto-related licenses in the U.S., Singapore and Hong Kong.

    Since China’s most recent announcement to crack down on crypto, related firms are increasingly shifting operations abroad including miners who are seeking alternatives such as North America.

    According to Futu and Tiger Brokers, their crypto offering will only target customers not based in mainland China.

  • DBS Expands Digital Exchange Offering

    DBS Expands Digital Exchange Offering

    DBS expands the offering on its digital exchange with its first-ever bond issuance via security token offering.

    DBS has issued a S$15 million ($11.35 million) bond through a security token offering (STO) on its digital exchange, according to a statement.

    The bond has a six-month tenor with a coupon rate of 0.60 percent per annum.

    The issuance was executed via private placement and DBS was the sole bookrunner for the transaction.

    According to the bank, asset tokenization enabled the digital bond can be traded at a significantly smaller minimum of S$10,000 per board lot, further driving liquidity and lowering barriers for investor access.

    While most bond tokenization exercises announced in Asia to date tend to be repackaged forms of a conventional bond issue, the current transaction directly combines existing legal and tax infrastructure requirements with a direct issuance on the digital exchange in smaller lot sizes, said DBS’ global head of fixed income Clifford Lee.

    This bond token structure was only made possible because of the progressive development of Singapore’s legal and tax infrastructure, which can facilitate more STO issuances to broaden and deepen our capital markets.

    According to DBS’ group head of capital markets Eng-Kwok Seat Moey, the bank expects more issuers to leverage asset tokenization for fundraising.

    Our maiden STO listing on the DBS Digital Exchange is a significant milestone, as it highlights the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors, he said.

    We expect asset tokenization to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fundraising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia.

    DBS’ digital exchange – DDEx – launched in December 2020 with an initial offering that covered cryptocurrency trading.

    Daily trading volumes have increased 10-fold compared to the initial week of the launch, the bank said, with over 120 participants on the exchange and S$80 million of digital assets in custody.

    Earlier this month, the bank launched a crypto trust offering that combined wealth planning services with emerging digital currencies.

  • Saxo Markets Appoints Hong Kong CEO

    Saxo Markets Appoints Hong Kong CEO

    Copenhagen-headquartered Saxo Markets has internally promoted a new chief executive for Hong Kong.

    Richard Douglas has been named Hong Kong CEO for Saxo Markets, effective immediately, according to a statement, reporting to APAC CEO Adam Reynolds.

    Douglas was most recently chief operating officer and chief information officer for Greater China and the role will be succeeded by Patrick Chung who will be responsible for all tech staff, platforms, and deliverables in the region while reporting to Saxo Bank chief information officer Ashok Kalyanswamy.

    Douglas has 18 years of experience, including six years in Hong Kong, having previously worked at the investment banking units of Macquarie, Nomura, Citi and UBS in London, Sydney, and Hong Kong.

    As part of the reshuffle, Greater China CEO Fan Xu will shift to a new role of CEO for Chongqing-based Saxo FinTech, a joint venture with Chinese automobile giant and majority shareholder Geely.

    China country head Echo Zhao will be leaving Saxo Group.

    «We believe that scaling and growing our Hong Kong business is critical to achieving our broader ambitions in the region, including building a strong partnership business,» said Saxo Bank CEO and founder Kim Fournais.

  • Tencent Ordered to Restructure Financial Units

    Tencent Ordered to Restructure Financial Units

    Similar to rival Ant Group, Tencent has also been ordered to set up a holding company to contain its finance-related businesses.

    Regulators told Tencent to place its finance-related businesses into a new financial holdings company for better supervision, according to a Caixin report citing unnamed sources.

    This follows a report last month that said top financial regulators summoned 13 tech giants – including Tencent – to discuss tighter restrictions across various areas including payments linked to financial products, customer data collection, and credit scoring services.

    Tencent and its peers are following a similar path to that of Ant Group which was first to face restructuring to become a financial holding company after it was ordered to do so by China’s central bank.

  • Morgan Stanley Increases Ownership in China JVs

    Morgan Stanley Increases Ownership in China JVs

    Morgan Stanley is the latest global bank to add exposure to mainland China’s financial sector with increased ownership in two joint ventures.

    Morgan Stanley will buy stakes in its securities and mutual fund joint ventures, according to a company filing with the Shanghai Stock Exchange.

    We are excited by opportunities to significantly expand our onshore securities and asset management businesses, which further strengthen our position to provide the best advice and services to our clients, according to a spokesperson for the bank.

    China Fortune Securities is the planned seller of a 39 percent stake in Morgan Stanely Huaxin Securities and its entire 36 percent stake in Morgan Stanley Huaxin Fund Management Company to the American lender for 958.6 million yuan (US$150 million), according to the filing.

    If the sale succeeds, Morgan Stanley would effectively own 90 percent of the securities joint venture, with China Fortune retaining the remaining 10 percent stake, and 85 percent of the fund joint venture.

    Global banks continue to take advantage of the opening up of China’s financial sector with Goldman Sachs, most recently, receiving preliminary approval to establish a wealth management joint venture with ICBC.

  • Hong Kong Launches Banker Bubble

    Hong Kong Launches Banker Bubble

    Top executives of financial firms in Hong Kong will be granted exemptions from quarantine in the city, according to the local regulator, giving the sector a first-mover advantage to reopening.

    Hong Kong authorities launched new rules, effective as of last week, that will enable alliterative traveling options specifically for senior executives in the financial sector with regional or global roles.

    The Chief Secretary for Administration of the Hong Kong Special Administrative Region Government (Matthew Cheung Kin-Chung) has designated certain categories of persons in the financial services sector to be exempted from the compulsory quarantine arrangements in Hong Kong, according to a circular released last Friday night by the Securities and Futures Commission (SFC).

    Senior executives of licensed corporations or their overseas affiliates who are fully vaccinated and meet the eligibility criteria may apply for exemption from the compulsory quarantine arrangements when they return or travel to Hong Kong, according to a circular released last Friday night by the Securities and Futures Commission (SFC).

    In addition a senior position at a licensed firm, financial professionals seeking exemption from the otherwise compulsory 21-day quarantine must submit an application with a detailed itinerary for the proposed trip to be electronically approved by the Financial Services and the Treasury Bureau (FSTB).

    The applying senior executive will only be allowed to leave their designated accommodation for approved activities set out in the itinerary alongside other requirements such as coronavirus tests, point-to-point transport, self-isolation, and medical surveillance.

    Licensed financial firms will be provided with four exemptions per month with two for visitors and two for returning executives, according to the circular.

    Breaching self-isolation requirements from designated accommodation will result in compulsory 21-day quarantine and failure to observe other exemption rules could result in a HK$5,000 ($644) fine and six months of imprisonment.

    The new rules were announced one day after the Hong Kong-Singapore travel bubble was supposed to launch but were suspended for the second time due to an infection spike in the latter city-state.

  • Chubb Makes APAC Leadership Appointments

    Chubb Makes APAC Leadership Appointments

    The property and casualty insurer is making several senior management changes at its business in Asia Pacific, effective July 1, while launching a new division, it announced on Friday.

    Country president for Chubb’s general insurance business in Korea, Edward Ler, will take on a new role as head of Southeast Asia, responsible for the general management and business results in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

    Ler joined Chubb in 2013. His 18-year career in the insurance industry spans a variety of managerial roles covering the Asia Pacific, the Middle East and European markets. He will relocate to Singapore for his new role and continue to report to Paul McNamee, Chubb’s regional president for Asia Pacific.

    Ler replaces Glen Browne, who was appointed division president of consumer lines, Asia Pacific, a newly created role to oversee the accident and health and personal lines businesses in the region.

    Browne, who brings 25 years of industry experience, will also have oversight for direct marketing, consumer partnerships, and digital distribution for both the company’s general and life insurance divisions in Asia Pacific. He reports to McNamee and will work closely with Brad Bennett, Chubb Life’s chief operating officer.

    McNamee said the new division is «a response to the evolving customer and growing partnership dynamics of [Chubb’s] business, which will necessitate the sharing of data, technology, and talent to deliver superior customer and partnership outcomes.»

    Taking over Ler in Korea is Edward Kopp, who is currently the firm’s regional head for accident and health since 2019. He continues to report to McNamee in his new capacity.

    Kopp has more than 25 years of experience in the financial services industry, including distribution, product development, underwriting, channel management, and has a deep understanding of the Korean market. Prior to joining Chubb in 2012, he held several leadership roles at leading banking and insurance firms.

    Kopp’s deputy, Ben Howell will replace him as regional head of accident and health, Asia Pacific. Howell will continue to be based in Singapore and report to Browne, in the latter’s new role as Division President – Consumer Lines, Asia Pacific.

    Mr. Howell has deep experience across both commercial and consumer insurance, with underwriting, product development, partnership and distribution management expertise spanning diverse product classes. He began his career with the company in Australia, then known as ACE, in 2002 before re-joining in 2016.

  • UBS Director’s Luxury Hong Kong Hideaway

    UBS Director’s Luxury Hong Kong Hideaway

    A board job at the Swiss wealth giant is a lucrative gig, but probably not lead to ultra-high net worth riches. Or at least not rich enough to purchase one of Hong Kong’s priciest manses, as Fred Hu just did.

    Hu plopped down HK$428 million ($55 million) for a 4,755-square foot home on Tai Tam Road in Hong Kong, according to Land Registry Records. This is just shy of an anonymous Chinese buyer who set a record when putting down HK$459 million in February for a home in the territory.

    Hu is a heavyweight who left Goldman Sachs, where he was a partner and oversaw the U.S. investment bank’s activities in China, to launch his own private equity firm, Primavera, in 2010. Primavera has $2.9 billion in assets under management, according to «Bloomberg».

    In 2018, Swiss wealth manager UBS snagged Hu as a director, where he is part of succession planning as a member of a governance and nominations committee, as well as part of risk oversight.

    Hu also sits on the boards of Ant Group, Hong Kong’s stock exchange, and ICBC, a Chinese lender which is the world’s largest by assets. A fund managed by Hu’s Primavera was spotlighted last year for allegedly selling heavily discounted Ant Group shares to Hu’s siblings – underscoring the perils of rapid wealth growth in Asia.

    As for Hu’s pay at UBS: he takes home 600,000 Swiss francs ($670,000) annually, 50 percent of which is in shares of the Swiss bank.

  • Singapore Fintech Partners BNP for Impact Investment

    Singapore Fintech Partners BNP for Impact Investment

    AI-driven fintech GreenArc Capital and BNP Paribas have been awarded a proof of concept grant by the Monetary Authority of Singapore’s Financial Sector Development Fund.

    The partners will collaborate on impact measurement and audit project, which will be led by Rony J Palathinkal, COO of GreenArc Capital, according to an announcement.

    The POC is an extension of their previous work to develop the GreenArc platform – an impact investment solution with an embedded impact measurement module that connects investors with impact opportunities focused on financial inclusion and climate action.

    GreenArc uses advanced machine learning techniques to provide assurance of the stated impact objectives of financial products, as well as facilitate investor capital towards true sustainable investments to avoid impact washing. It has been deployed successfully by financial institutions to measure their debt portfolio’s impact.

    We aim to bring transparency to investors and liquidity to select last-mile lenders and microfinance lenders, Joris Dierckx, BNP Paribas regional head of Southeast Asia and CEO, Singapore, said, noting the growing interest among institutional and retail investors to have a positive impact climate change and economic inequality.

  • Apple’s job search hints at a possible involvement with cryptocurrency

    Apple’s job search hints at a possible involvement with cryptocurrency

    Will you eventually be able to pay for a new Apple iPhone with Bitcoin? That is one of the conclusions that you might come to following a peak at the “Jobs at Apple” website where Apple posted a listing for a Business Development Manager for Alternative Payments. The job posting says that the Apple Wallets, Payments, and Commerce (WPC) team is looking for someone to hold up Apple’s end in Alternative Payments Partnerships.

    The new employee will be working at Apple’s headquarters in Cupertino, California and will be given the task of negotiating with potential partners, signing and executing commercial contracts, and developing new programs. The person that Apple is looking for should have five or more years working for an alternative payment provider with expertise in digital wallets, BNPL (buy now, pay later), fast payments, and cryptocurrency.

    Apple CEO Tim Cook has talked about a future in which all payments are made digitally, and the iPhone, iPod touch and the Apple Watch have a digital Wallet app that comes with the devices. Apple says that with the app “you can keep your credit, debit, and prepaid cards, store cards, boarding passes, movie tickets, coupons, rewards cards, student ID cards, and more in one place.” And through the Messages app, Apple device owners can make peer-to-peer payments.

    Some analysts have suggested that Apple invest some of its cash in cryptocurrency following in the footsteps of Tesla. A couple of years ago, an Apple Pay executive said that the company saw “long-term potential” in cryptocurrency technology, but has no plans to use it at the moment. Back in February, RBC Capital Markets Analyst Mitch Steves suggested that Apple create a crypto-exchange and invest in alternative currencies.

    Steves’ analysis said that if Apple were to get heavily involved in cryptocurrency, it will help the U.S. become the technological leader in this market for as long as 10-20 years. The analyst also forecast that if Apple were to develop a wallet-based crypto exchange, it could generate as much as $40 billion in revenue for Apple.

  • Australia’s Zip looks to drive deeper in Asia, may consider US listing

    Australia’s Zip looks to drive deeper in Asia, may consider US listing

    Australia’s second-biggest buy now, pay later (BNPL) firm Zip Co Ltd is exploring a bigger push into Asia and a potential U.S. listing, the company told Reuters on Tuesday.

    After gaining a toehold in Southeast Asia last month through a stake in Philippine firm TendoPay, Zip Chief Executive Larry Diamond said the company is now “actively looking at Singapore, Malaysia, Thailand, Philippines and India”.

    Zip’s big focus remains the United States, the biggest market in BNPL space where its unit Quadpay is driving the growth.

    As their home turf matures and race heats up in a sector where customers pay in installments without any interest for their online purchases, Zip and its Australia-listed rivals Afterpay and Sezzle are rushing to tap new growth markets and add investors.

    “The consideration to list on the Nasdaq or have some form of dual listing makes sense and ticks quite a few boxes,” a Zip spokesperson said. However, the idea is “only at a very early stage” and there are “no hard or firm plans”.

    Rivals Afterpay and Sezzle too have been keen on a U.S. debut. Swedish rival and Europe’s most valuable startup Klarna, which has also expanded beyond the continent, is also rumored to be eyeing the US equity market.

    The rapid growth of these loss-making companies in a largely unregulated market has also attracted traditional financial firms, with PayPal Holdings launching its BNPL service last year and Australia’s largest bank set to enter this summer.

    While the business is an attractive alternative to credit cards, concerns have been raised by consumer protection groups and some investors over the lack of regulation with many BNPLs opting for “soft” credit checks.

    BNPLs in Australia, where adoption is high, are not bound by consumer lending laws since they do not charge interest in most cases. Britain is currently forming a framework around BNPL.

    Zip’s plan to expand in Asia follows its decision on Monday to take full ownership of a BNPL firm each in Europe and the Middle East.

  • Hanoi Stock Exchange earns record profit in 2020

    Hanoi Stock Exchange earns record profit in 2020

    The Hanoi Stock Exchange (HNX) posted VND399 billion ($17.3 million) in 2020 post-tax profit, a year-on-year increase of 28 percent.

    Its revenue rose 32 percent year-on-year to VND733 billion, 87 percent of which was from transaction charges.

    The exchange attributes its highest-ever revenue and post-tax profit earnings to the rise in corporate bonds issuance.

    According to HNX data, 2,408 corporate bond issues were registered last year, 92.5 percent of them successful. The value of bonds successfully issued by corporates in 2020 jumped 36 percent year-on-year to VND403.4 trillion.

    The exchange’s total assets were valued at VND1.35 trillion at end of 2020, up 6 percent year-on-year.