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Tag: bank

  • DBS India to Save Troubled Lakshmi Vilas Bank

    DBS India to Save Troubled Lakshmi Vilas Bank

    The Chennai-based bank, which has a 94-year history in India, with established retail and SME customer base, and a strong presence in South India, has undergone a steady decline with the bank incurring continuous losses over the last three years, eroding its net-worth.

    India’s banking regulator imposed a 30-day moratorium Tuesday on struggling Lakshmi Vilas Bank (LVB), superseded its board of directors and announced a draft scheme for the amalgamation of the bank with DBS Bank’s India subsidiary.

    The financial position of Lakshmi Vilas Bank has undergone a steady decline with the bank incurring continuous losses over the last three years, eroding its net-worth. In the absence of any viable strategic plan, declining advances and mounting non-performing assets (NPAs), the losses are expected to continue,» the Reserve Bank of India (RBI) said.

    To support the amalgamation, DBS will inject INR 2,500 crore ($345 million) into DBIL if the scheme is approved. This will be fully funded from DBS’ existing resources, the bank said.

    The proposed amalgamation will provide stability and better prospects to Lakshmi Vilas Bank’s depositors, customers, and employees following a time of uncertainty. At the same time, the proposed amalgamation will allow DBIL to scale its customer base and network, particularly in South India, which has longstanding and close business ties with Singapore, DBS said in a statement on Wednesday.

    DBS has been in India since 1994. To expand the franchise and build greater scale, DBS converted its India operations to a wholly-owned subsidiary in 2019, DBIL. The bank is now present in 24 cities across 13 states.

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  • StanChart Streamlines Business in Global Restructuring

    StanChart Streamlines Business in Global Restructuring

    Standard Chartered announces a reorganization into fewer but larger units and also confirms the exit of its global wealth head.

    Effective January 1 next year, Standard Chartered will combine the private banking business with retail banking and wealth management in a new consumer, private and business banking (CPBB) unit, according to a statement. The current regional chief executive of ASEAN and South Asia, Judy Hsu, will lead the CPBB unit.

    This combined business will grow the group’s affluent client base, further develop innovative digital banking solutions for mass-market and small businesses, and deliver further efficiencies, the bank said in a statement.

    The bank also confirmed the exit of former private banking head Didier von Daeniken, whose role will be overseen by Hsu in the interim until a new permanent appointment has been made.

    Under on Daeniken’s leadership the private bank returned to profitability in 2019 and was the bank’s fastest-growing segment, the statement said.

    With substantially upgraded digital products and services and improved productivity, we have strong foundations and good momentum. We will bring together our private bank with our priority banking business under Hsu’s leadership, while retaining their separate brands and propositions, to accelerate growth and create an affluent client continuum to better serve our clients.

    The CPBB unit will be organized around two client groups and two regions. In addition to Hsu’s temporary role as the head of private and priority banking, Vishu Ramachandran will lead personal and business banking. Wealth Management will continue to be led by the newly appointed ex-Bank of Singapore executive Marc Van de Walle.

    Regionally, Samir Subberwal will lead CPBB for Asia while Kariuki Ngari will lead CPBB for Africa, the Middle East and Europe, in addition to his Kenya and East Africa CEO responsibilities, also until a permanent appointment has been made.

    In addition, Rosalind Ng will lead client experience and strategic business enablement.

    In Asia, the bank is also combining its three regional units – ASEAN, South Asia alongside Greater China and North Asia (GCNA) – into a single one led by Ben Hung, currently GCNA chief. The unit is made of cluster CEOs who will be joining the Asia management team alongside Samir Subberwal, GCNA retail banking head; Paul Skelton, global head, client coverage, commercial, corporate and institutional banking; and John Tan, global head, financial markets regions.

    In north Asia, cluster CEOs include Jerry Zhang for China and Japan; Mary Huen for Hong Kong, Taiwan and Macau; Park Jong Bok for Korea; and Anthony Lin for the Greater Bay Area.

    And in the south and southeast Asia region, the bank named as cluster CEOs Zarin Daruwala for India and South Asia Markets (Bangladesh, Nepal and Sri Lanka); Andrew Chia for Indonesia and ASEAN Markets (Australia, Brunei and the Philippines); and Patrick Lee for Singapore and ASEAN Markets (Malaysia, Vietnam, Thailand).

    CEO of Europe and Americas, Torry Bernsten, has also been named as chief of the former market and the U.K.

    Steve Cranwell will succeed Bernsten as CEO of the Americas and report to him.

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  • Singapore to Raise Standards for Issue Managers

    Singapore to Raise Standards for Issue Managers

    The Association of Banks in Singapore has announced revised due diligence guidelines for companies planning to list on the Singapore Exchange, with immediate effect.

    Last revised in 2016, the new set of guidelines set out expectations and recommendations on due diligence work that issue managers and full sponsors carry out during the initial public offer (IPO) / reverse takeover (RTO) and listing process.

    They were developed in close collaboration with the Singapore Exchange Regulation (SGX RegCo).

    Key updates include: An increased focus on the assessment of the adequacy and effectiveness of the issuer’s internal controls to meet its business needs and challenges as a listed company; the assessment of the sustainability and viability of the issuer’s business; and targeted guidelines for due diligence on issuers operating in specialized, restricted or niche industries, and/or in higher-risk jurisdictions.

    Ong-Ang Ai Boon, director at the Association of Banks in Singapore (ABS), said the revised guidelines are necessary to ensure they are relevant to the constantly changing economic climate.

    With the increase in issuers from more nascent sectors such as technology that are seeking equity capital, it becomes especially important for issue managers, full sponsors and their professionals to adapt due diligence practices that address the particular needs of

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  • UOB to Allow Partial Remote Work Post-Covid

    UOB to Allow Partial Remote Work Post-Covid

    The bank plans to give the majority of its 26,000-strong workforce the choice to work remotely two days a week once COVID-19 restrictions are lifted.

    UOB made the announcement on Friday, following a six-month review of work patterns, workspaces and workforce technology tools, which revealed that 65 percent of the bank’s roles, all of which are non-customer facing, were suited to remote work.

    The bank also cited broader community sentiment where 80 percent of people across ASEAN said they wanted some form of flexible work arrangement from their employer.

    At the same time, UOB will accelerate its infrastructure improvement plan across the region, which enables more agile team-based work and deeper collaboration across different functions.

    Two days of remote working per week ensures «the right balance between professional fulfillment of the individual and their mental well-being, as employees need to maintain a sense of connection with colleagues and the company, UOB said in the announcement.

    We believe that the future of the workplace is a hybrid one where employees choose how to manage their work commitments based on the space and place they can be most effective. Working from home during COVID-19 has been instructive due to the speed and intensity of the change but we must look beyond the present and define a future of work that is more sustainable,»  Dean Tong, UOB’s head of group human resources, said.

    Last week, we reported that Standard Chartered is planning to permanently offer flexible work options to around 90 percent of its 85,000-strong staff by 2023, as well as near-home workspaces for staff – in addition to offices, and work-from-home arrangements

  • UBS Private Equity Head Joins Fintech

    UBS Private Equity Head Joins Fintech

    The head of private equity at the wealth management of UBS is joining a Berlin-based investment platform.

    The CVs of the staff at Moonfare, a German private-equity-investment platform, include some serious heavy-weight experience: KKR, Apax Partners, J.P. Morgan, Blackrock, Amazon, Microsoft, Angellist, N26, and Google.

    Since this November, Swiss bank UBS is also part of the list of former employers of the Moonfare staff. The German startup has hired Winson Ng as its chief investment officer.

    He will work with managing director Magnus Grufman to develop the fund offering of Moonfare. The company is busy expanding the offering from private equity to new asset classes, according to a statement released on Wednesday.

    Ng will remain based in London and join the investment committee of Moonfare. He will play a key role in the positioning of the firm in digital private markets investing and growing its presence in the U.K.

    Experience From UBS and GIC

    Ng was head of the wealth management private equity team of UBS. At UBS and in senior roles at GIC, the Singapore state fund, Ng oversaw large allocations to growth, middle-market, and large-cap buyout funds as well as investments in funds focused on mezzanine capital, credit, infrastructure, and venture capital.

    A native of Hong Kong and Malaysia, Ng has an MBA from INSEAD and graduated with a medical degree from the University of London.

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  • Non-performing loans surge due to pandemic

    Non-performing loans surge due to pandemic

    Most banks have seen non-performing loans rise by at least 30 percent in the first nine months as the Covid-19 pandemic hit businesses and individuals. Of 15 commercial banks that have published their third-quarter results, 14 reported a surge in non-performing loans by 30 percent or more.

    State-owned VietinBank posted the highest rise of 66 percent to VND17.95 trillion ($779.36 million), followed by TPBank at 60 percent and MB Bank, 39 percent.

    BIDV, the largest bank in Vietnam by an asset, saw non-performing loans rising 16 percent to VND22.5 trillion, the highest among all lenders.

    Bank leaders say that the rising number of low-quality debt is unavoidable amid the Covid-19 pandemic when many businesses went into financial difficulties due to social distancing measures and dwindling demand for goods and services.

    Nguyen Dinh Tung, CEO of Orient Commercial Bank (OCB), said although the value of non-performing loans has surged, the ratio of it over total debt is still under control.

    But economists say that these figures will continue to worsen next year.

    Economist Nguyen Tri Hieu said that a circular issued by the State Bank of Vietnam in March has allowed banks to lower or cut interest rates on loans to support borrowers amid the pandemic and allow them to delay their payback time.

    Although this circular has given businesses more time to recover from Covid-19 impacts, the loans they had acquired will eventually have to be paid and those unpayable will be turned into bad debts for banks, he said.

    “Banks cannot escape from losing some of their loans in the future.”

    As the global situation of Covid-19 is still intense globally, Vietnamese businesses will still have financial difficulties in this and next year, and therefore the central bank should prolong its low-interest credit program to support local companies, Hieu said.

    Banks, meanwhile, should increase their provisions for doubtful and bad debt to protect themselves from unavoidable risks in the future, he added.

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  • StanChart to Rollout Flexible Working Option

    StanChart to Rollout Flexible Working Option

    Standard Chartered is reportedly planning to permanently offer flexible work options to around 90 percent of its 85,000-strong staff by 2023.

    Some form of hybrid work arrangement will be made available to around half of its staff from early 2021 and the program will extend to 75,000 works in 55 markets by 2023.

    While we have been thinking through the issues around the future workplace for some time, it’s inevitable that recent events provided a catalyst,» said Standard Chartered’s human resources head Tanuj Kapilashrami, according to a «Bloomberg» report citing an internal memo.

    In addition to flexible work options, the bank will also provide «near-home» workspaces for staff – in addition to offices, and work-from-home arrangements – with an unnamed third party workspace provider.

    According to Standard Chartered, hybrid work is something that has gained widespread acceptance across the bank with about two-thirds of Singapore staff favoring the option. The figures rises with respondents in western locations including 76 percent in the U.K. and 79 percent in the U.S.

    It is anticipated most employees will fall into a hybrid pattern, ie some days in the office and some days working from home, the bank said.

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  • HSBC Sues Hin Leong Owners

    HSBC Sues Hin Leong Owners

    The bank, which is owed some $600 million by embattled oil trading firm Hin Leong, is the firm’s largest creditor and first to take legal action to recover losses.

    HSBC is suing Hin Leong owner Lim Oon Kuin and his two children to recover $85.3 million (S$115.8 million) of the $111.7 million they received using fake invoices and documents, according to a report last Friday.

    The bank, which is also suing Serene Seng Hui Choo, a manager of the corporate affairs department at Hin Leong, filed the suit in the High Court on October 21, a report said.

    Some 23 banks reportedly lent a total of $3.85 billion to the troubled oil trader, with HSBC reportedly believed to have the largest exposure. The oil trader overstated the value of assets by at least $3 billion by transferring money between bank accounts to create a false impression that accounts receivables were collected when no payments was actually received, according to a report.

    In September, the firm’s judicial manager PwC took action against Lim, his son Evan Lim Chee Meng and his daughter Lim Huey Ching, who are both executive directors at the company, accusing them of fraudulent trading and breaching their fiduciary duties as directors.

    According to the suit, the outstanding amount of $3.5 billion are Hin Leong’s debts, which the Lim family are personally responsible for, without limitation of liability

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  • OCBC Earnings Drop Significantly

    OCBC Earnings Drop Significantly

    While the bank’s net interest income was impacted by lower market rates, its banking and wealth management businesses saw strong quarter-on-quarter fee-based growth, and its insurance franchise reported strong sales and new business growth.

    OCBC’s net profit for the third quarter of 2020 was S$1.03 billion ($760 million), up 41 percent from the previous quarter’s S$730 million and 12 percent lower compared to a year ago, according to financial results published by the bank on Thursday.

    The growth in profit was largely a result of a fall in allowances, OCBC said. The bank set aside S$350 million in allowances during the quarter, which included a management overlay of S$150 million, compared to S$750 million in the previous quarter.

    Net interest income declined 4 percent from last quarter’s S$1.42 billion from lower rates – an 11 percent decline from the same period in 2019. At the same time, non-interest income rose 6 percent to S$1.12 billion, led by higher trading income and insurance profit.

    The bank reported growth in wealth management fees of 24 percent on-quarter and 4 percent year-on-year to S$252 million.

    Assets under management at Bank of Singapore, OCBC’s private banking subsidiary, grew 3 percent from the previous quarter and 5 percent year-on-year to $116 billion (S$159 billion), underpinned by net new money inflows and better market valuations.

    At Great Eastern, OCBC’s insurance arm, total weighted new sales rose 51 percent quarter-on-quarter to S$433 million, supported by improved sales both in Singapore and Malaysia, while New Business Embedded Value was 47 percent higher at S$160 million, while the NBEV margin was 37 percent.

    OCBC said the full extent of the lagging economic impact of the crisis will only likely have more visibility next year. However, it said it is well-positioned for recovery and is focused on driving long-term sustainable value.

    With the outlook still uncertain, it is most important that we continue to strengthen our capital and balance sheet. This will position us well for the crisis and enable us to emerge well-prepared for new opportunities when the market recovers,» Samuel Tsien, OCBC group CEO, said in a statement.

    Singapore’s two other listed banks already reported their quarterly earnings – DBS saw its profits fall by 20 percent from the same period last year to S$1.3 billion, while UOB reported a 40 percent decline to S$668 million.

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  • UOB Tie-Up to Nurture ESG Mindset Among Employees

    UOB Tie-Up to Nurture ESG Mindset Among Employees

    UOB will work with Dutch investment company Robeco to tap its expertise in environmental, social, and governance (ESG) matters and integrate sustainable thinking across its business and investment processes.

    The bank’s asset management arm is launching its Sustainability Academy in the fourth quarter of 2020, which offers development programs to deepen its employees’ understanding of sustainability principles and nurture an ESG mindset, UOB announced on Friday.

    The Robeco program comprises two modules, namely Sustainable Investing and Sustainable Development Goals (SDGs) Investing, and will cover key topics such as ESG integration, active ownership, and measuring the contribution of companies to the UN SDGs. Over 400 staff in both investment and non-investment roles across the region are expected to benefit from the training.

    The academy will launch a second training program in November 2020, to be offered by KPMG and supported by the Institute of Banking and Finance Singapore, covering topics such as sustainability reporting and regulatory expectations on ESG matters.

    The global emphasis on sustainable investing has grown tremendously in recent years, with ESG considerations now core to the investment philosophy of major asset managers around the world, Thio Boon Kiat, CEO of UOB Asset Management, said in the announcement.

    Earlier this week, UOB announced that it would integrate ESG considerations into its full suite of retail investment solutions as part of the bank’s commitment to driving growth sustainably.

    UOBAM previously worked with Robeco to launch the first bond fund focused on the UN SDGs – the United Sustainable Credit Income Fund (USCIF) – for retail investors in Singapore in March 2020. The two sides also jointly launched a

  • DBS Mulls Crypto Exchange Launch

    DBS Mulls Crypto Exchange Launch

    DBS’ plans for a digital exchange are still work in process, and have not received regulatory approvals. Until such time as approvals are in place, no further announcements will be made. DBS is planning to launch a crypto exchange that will allow four digital currencies – Bitcoin, Bitcoin Cash, Etheerum, and Ripple – to trade against the Singapore dollar, Hong Kong dollar, Japanese yen or U.S. dollar, according to a report by digital asset media firm The Block. 

    Dubbed DBS Digital Exchange, the initiative was first unveiled through a website seen by The Block which cached the now removed website.

    Regulated by the Monetary Authority of Singapore, the crypt exchange will be made accessible to institutional investors, including financial institutions and market makers. Retail investors will have access via DBS entities like their securities or private banking arm.

    While most exchanges can execute orders at any time and any day, DBS will similarly follow the same trading hours as stock exchanges, allowing for less than seven hours per day, according to the report.

    In addition to standard trading, the bank will also provide institutional-grade custody solutions for safekeeping digital assets and, in due time, conduct security token offerings to help small and medium-sized firms raise funds.

    Digital assets are poised to be the future of tomorrow’s digital economy, the website originally read.

    With DBS Digital Exchange, a bank-backed digital exchange, companies, and investors can now leverage an integrated ecosystem of solutions to tap the vast potential of private markets and digital currencies.

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  • Revolut Ramps Up Growth Efforts in Singapore

    Revolut Ramps Up Growth Efforts in Singapore

    The fintech hopes to build on the momentum it has gained amid the social and economic challenges brought about by the pandemic.

    Revolut Singapore has made a number of additions to its growing team in Singapore bring onboard digital strategist Sam Chui as marketing manager and media specialist Deborah Tan-Pink as communications manager.

    Chui joins from local marketing agency GoodStuph, while Tan-Pink resigns from her role as CEO of an edtech startup to join the company. She previously spent more than 10 years in lifestyle publishing, including a stint as editor-in-chief of Cosmopolitan Singapore. The pair will report to Pam Chuang, Revolut Singapore’s head of growth.

    Our hiring strategy is to attract top talents in the region with great expertise in specific fields. Both Deborah and Sam have on-ground knowledge of the Singapore market when it comes to our target customers, Chuang said about the new hires.

    The total number of e-commerce transactions among Revolut customers more than doubled during Singapore’s «circuit breaker» period earlier this year. Contactless payments also grew by 30 percent, and now comprises 90 percent of its transactions, Tan-Pink said.

    Revolut is currently seeing a recovery in in-store spending, particularly for restaurant dining, with close to 3x growth in total transactions. Year to date, our daily active people figure is close to pre-Covid levels and we are poised to grow this number further this quarter and into 2021, she said.

    The company said it has enjoyed «very positive momentum» since its launch one year ago, with over 70,000 customers, of which 65 percent are Singaporeans. The average age of the Revolut customer in Singapore is 35 and some three-quarters of its active customers use the Revolut card for e-commerce purchases, it noted.

    The company is preparing to bring Revolut Junior to the market in the last quarter of 2020, and expects a full roll-out of Revolut Business at end of the first quarter next year.

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  • HSBC Restructures Further and Faster

    HSBC Restructures Further and Faster

    HSBC will accelerate and expand restructure, despite beating analyst forecast with $3.1 billion of profit before tax in the third quarter. Profits were down $1.8 billion (37 percent) compared to the same period last year, according to the latest earnings release, supported by reducing risky credit and continued cost management. Year-to-date, the London-headquartered bank generated $9.9 billion in profit before tax.

    These were promising results against a backdrop of the continuing impacts of COVID-19 on the global economy, said group chief executive Noel Quinn.

    I’m pleased with the significantly lower credit losses in the quarter, and we are moving at pace to adapt our business model to a protracted low-interest-rate environment.

    Moving forward, the bank will focus on three main strategic priorities: growth acceleration in Asia continued digitalization, and further restructuring.

    On the latter area, the bank is looking to speed up and expand the initiative after saving $600 million in costs this year and shedding 10,000 jobs since the third quarter last year. U.S. and Europe are also restructuring and are also on pace to meet their 2022 targets. We are accelerating the transformation of the Group, moving our focus from interest-rate sensitive business lines towards fee-generating businesses, and further reducing our operating costs, Quinn said. We also intend to increase our rate of investment in Asia, particularly in wealth, the Greater Bay Area, south Asia, trade finance, and sustainable finance.

    According to Quinn, ECL charge for 2020 is trending lower towards the $8-13 billion range but he notes that current guidance makes the assumption that further significant economic deterioration is unlikely.

    In addition, he also highlighted geopolitical risks including U.S.-China tensions as well as uncertainties linked to Brexit.

    We expect lower global interest rates to continue to put pressure on net interest income, Quinn said. Based on current interest rates, we expect further modest net interest income headwinds in 4Q20, with some stabilization as we move into 2021.

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  • Fintech Launches Low-Cost Customizable Portfolio

    Fintech Launches Low-Cost Customizable Portfolio

    Digital wealth manager Endowus’ new product allows investors to build customizable portfolios with direct access to a selection of low-cost funds.

    The Fund Smart platform, launched Thursday, allows investors to directly access institutional share-class and trailer-free funds using cash, CPF, and Supplementary Retirement Scheme (SRS) funds.

    The platform’s curated model portfolios include an ultra-defensive fixed income portfolio that prioritizes capital preservation, flexible cash management solutions, as well as thematic and sector-focused portfolios such as ESG environment, social, governance (ESG) or socially responsible investing (SRI) funds, Shariah-compliant funds, and thematic funds.

    People struggle with too many options – a growing array of platforms, and far too many funds to choose from with confusing fee structures,» Samuel Rhee, Endowus chairman and chief investment officer, explained in the announcement.

    According to the company, Fund Smart was developed based on a survey of more than 700 investors that focused on their preferences and behavior patterns. Some 71.6 percent of respondents indicated a desire to customize their investment portfolios, with lower incurred costs (84 percent) and the flexibility to choose funds from specific geographies or sectors (74.5 percent) as key considerations.

    We want our clients to experience the same quality of advice we have provided with our core portfolio products, but now with greater flexibility, Rhee said.

    Fund Smart has no sales fees, no transaction fees, no lock-ups, and full trailer fee rebates, along with automated rebalancing and regular savings plans capabilities.

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  • Banks maintain profit growth but bad debts rise

    Banks maintain profit growth but bad debts rise

    Most banks reported profit growth in the first nine months, but bad debts posted a double-digit rise due to the impacts of the Covid-19 pandemic. VPBank saw its pre-tax profits surge by nearly 30 percent year-on-year to VND9.4 trillion ($402.75 million) as it managed to cut operating costs by nearly 6 percent. But its bad and doubtful debts rose by 15 percent to over VND10 trillion.

    Military Bank’s profits rose by nearly 7 percent to VND8.13 trillion while its bad and doubtful debts rose by 39 percent.

    ACB’s profits were up nearly 15 percent at VND6.41 trillion while bad and doubtful debts rose by 71 percent.

    But some banks also reported declines in profits.

    Vietcombank continued to be the most profitable, but its pre-tax profit fell by over 17 percent to VND15.96 trillion as revenues remained flat or declined but it had to hike provisions for bad debt by 25 percent.

    Bad and doubtful debts were up 15 percent to nearly VND7.9 trillion.

    Sacombank’s profits fell by nearly 7 percent to VND2.33 trillion as provisions for bad debts rose by nearly 70 percent.

    Financial data provider FiinGroup had said in a report in July that the financial health of businesses and their ability to repay debts have declined and people’s incomes have dropped, and these factors could affect the quality of credit in the near future.

    As lenders gradually have to increase provisions for doubtful debts, their profits in the coming quarters could slump, it added.

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