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  • Citi Appoints Investment Banking Head of Australia and New Zealand

    Citi Appoints Investment Banking Head of Australia and New Zealand

    The American lender nabbed an ex-Deutsche Bank investment banker to lead the unit, claiming to anticipate increased fundraising and M&A activity in the second half. Alex Cartel joins, effective July 2020, as the head of investment banking for Citi Australia and New Zealand after most recently being with Deutsche Bank’s Australia unit as its head of investment banking coverage, according to a statement. Cartel, who is also the president of the «Australian Takovers Panel», will report to Tony Osmond, Citi’s head of banking, capital markets and advisory.

    Cartel has over 20 years of experience with involvement in numerous major deals in Australia including, most recently, the A$600 million ($381 million) sales of Kirin’s Lion Drinks and Dairy business to China Mengniu and Saputo.

    In addition, the bank also named Rob Jahrling and Hamish Whitehead as co-heads of Citi Australia and New Zealand’s equity capital markets (ECM), reporting to John McLean capital markets origination head at Citi Australia and New Zealand.

    Whitehead joined Citi in 2015 and now leads ECM origination and execution out of Melbourne, covering the transport and utilities sector. Jahrling joined Citi in 2010 and ECM origination and execution from Sydney, covering the resources sectors.

    In just the past two weeks, Citi has raised $2 billion in equity from regional carpets including NextDC, Auckland International Airport, Shopping Centres Australasia Property Group and Electro Optic Systems. It also raised $8.5 billion from debt capital markets from companies and government agencies such as NSW Treasury Corporation, Queensland Treasury Corporation, South Australia Finance Authority and Treasury Corporation of Victoria.

    We are experiencing a strong increase in fundraising activity and expect this to grow further to include increased M&A activity in the second half and beyond, added Citi’s Osmond in the statement.

  • HSBC’s Pro-Dividend Shareholders Call for Regulator Intervention

    HSBC’s Pro-Dividend Shareholders Call for Regulator Intervention

    Enraged retail investors of HSBC in Hong Kong have invoked the Securities and Futures Commission in the latest development of the HSBC dividend cancellation fiasco. A 500-strong group that claimed to be HSBC shareholders assembled at the offices of the Securities and Futures Commission (SFC), urging the local regulator to intervene and help reverse a decision by the British lender to scrap dividends on Bank of England orders. Leading the group was local politician Christine Fong Kwok-shan.

    The [Prudential Regulation Authority] orders have hit many retirees hard in Hong Kong, including my father who invested in HSBC shares for decades,» Fong said, according to a report that claimed SFC staff accepted the letter without commenting.

    We understand that HSBC canceled dividend payments at the order of the British regulator. As usual, it needs a regulator to talk to another regulator.

    The new group joins the growing coalition of pro-dividend shareholders that include the Hong Kong Federation of Trade Unions, which boasts 420,000 members, and a self-dubbed HSBC Shareholder Alliance of allegedly 600 owners of HSBC stock.

    Despite the fact that dissatisfied investors have no legitimate case to push for a reversal, they continue nonetheless to mobilize in order to meet the 5 percent shareholder threshold to trigger an extraordinary general meeting and have their demands directly heard. As of Thursday, 3 percent of shareholders have pledged their support.

    We profoundly regret the impact this will have on you, your families and your businesses, said HSBC chief executive Noel Quinn in a rare letter earlier this week directly addressing Hong Kong shareholders earlier this week. We are acutely aware of how important the dividend is to our shareholders in Hong Kong. We deeply value your support as a shareholder and we never take that for granted.

  • OCBC Shutters Investors Hub During Circuit Breaker

    OCBC Shutters Investors Hub During Circuit Breaker

    The bank hopes to encourage more people to stay home and comes in support of stricter social distancing measures implemented by the government to contain the spread of Covid-19.

    OCBC Bank’s wholly-owned brokerage subsidiary, OCBC Securities, will temporarily close its Investors Hub at OCBC Centre South from 20 April to 4 May 2020, it announced in a statement on Friday.

    The bank said customers will be able to continue to trade or make transactions through their trading representatives or on OCBC Securities’ digital platform, iOCBC, as the brokerage will continue to be operational during this time.

    The Monetary Authority of Singapore also urged the public to minimize visits to their premises during the current circuit breaker period.

    While financial services remain available as one of the essential services exempted from the suspension of activities at workplace premises announced by the Ministry of Trade and Industry (MTI) on 3 April 2020, customers are urged to use digital, email, and telephone channels as far as possible and minimize face-to-face interactions at FI premises,» the regulator said in a statement on Friday.

    About half of the bank branches in Singapore have closed, along with most of the physical service locations of insurers, brokers and fund managers, in view of reduced customer traffic.

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  • Q1 Profits Plummet for Citigroup

    Q1 Profits Plummet for Citigroup

    First-quarter profits plummeted 46 percent at Citigroup due in part to its high exposure to unsecured lending via credit cards.

    Citi posted $2.52 billion in first-quarter profits and set aside $4.9 billion in anticipation of increasing defaults fuelled by the ongoing coronavirus pandemic. The U.S. business reported a first-quarter loss of $837 million with the card business representing half of the reserves set aside for expected loan losses.

    Citi’s chief financial officer Mark Mason did not provide specific details on expected profitability pressures but nonetheless said it was «reasonable to expect» further loss provisioning spending on the effectiveness of U.S. government relief programs.

    Credit card defaults are historically correlated with unemployment and the ongoing health crisis has placed added pressure on lenders more dependent on such unsecured loans. In 2019, the U.S. credit card business accounted for 15 percent of total net income.

    Globally, the consumer banking business was flat as gains from the U.S. arm were offset by a 4 percent decline in Asia to $1.8 billion due to lower revenues in its cards business – this could see a boost from its recent partnership with major e-platform HKTVmall.

    Citi’s overall earnings were offset in part by trading fees as equities and fixed income trading business posted a 39 percent spike as activity rose with increased turbulence.

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  • Singapore Banks Refuse Entry to Customers Without Masks

    Singapore Banks Refuse Entry to Customers Without Masks

    As the number of unlinked Covid-19 cases in Singapore continues to climb, ABS is advising customers of the additional measures taken by the banks to reduce the risk of transmission.

    The Association of Banks in Singapore (ABS) on Tuesday announced that all customers who do not wear face masks when visiting bank branches will be refused entry, and has advised customers to wear a face mask when lining up to use ATMs.

    These measures were adopted in light of the elevated safe distancing measures announced by the Ministry of Health. Banks have also put in place crowd management systems at their branches to ensure safe distancing between customers and staff, and have increased the frequency of cleaning and disinfection of their branches, ABS noted in a circular.

    The use of face masks was previously discouraged by the Singapore government, but its position on the matter changed with evidence that an asymptomatic person can still pass on the virus to others. Addressing the public on 3 April, Singapore Prime Minister Lee Hsien Loong to «keep your droplets to yourself.»

    Banks across Singapore have closed up to half of their branches due to the reduced traffic as a result of enhanced social distancing measures. Non-essential businesses have been ordered to close, and all companies have been instructed to transition to working from home.

    At the same time, the Monetary Authority of Singapore (MAS) affirmed that financial services would remain open and available to all customers and counterparties in Singapore and globally.

  • Siam Commercial Bank Set to Launch Myanmar Unit

    Siam Commercial Bank Set to Launch Myanmar Unit

    Thailand’s third-largest lender has received preliminary approval to operate in the Southeast Asian nation of 54 million people.

    SCB will be allowed to open up to 10 branches in the business area with an initial focus on Thai clients with investments in the country, according to Reuters report citing chief executive Arthid Nanthawithaya, who said the bank already had over 100 existing business clients across consumer goods, energy and agricultural sectors.

    Nanthawithaya said the bank will aim to boost its loan assets to 7 billion baht ($210 million) by 2024. After 2021, SCB will also be able to enter the retail market in Myanmar, offering personal loans and wealth management services.

    Not unlike to its Thai banking rivals, SCB has been expanding to widen its regional network with a presence in six other markets including Laos, Shanghai and Singapore. The move to launch in Myanmar follows recent news of Bangkok Bank’s acquisition of a controlling stake in Indonesia’s PT Bank Permata for $2.7 billion in December last year.

  • OCBC Chief Executive Receives Pay Rise

    OCBC Chief Executive Receives Pay Rise

    His remuneration comprised a base salary of S$1.24 million, a bonus of $5.84 million, deferred shares worth S$3.89 million, and other benefits worth $102,000, but he donated more than half his base salary to charity.

    OCBC CEO Samuel Tsien’s pay for 2109 grew to S$11.1 million, up 3.5 percent from $10.7 million last year, according to the bank’s annual report, filed with Singapore Exchange on Tuesday.

    But not all of that is going to his pocket, with the chief of Singapore’s oldest bank donating S$650,600 from his 2019 base salary to support community and environmental causes under its #OCBCCares Program, without asking for tax deduction benefits, the bank said.

    For the full year of 2019, OCBC posted record net profits of S$4.87 billion ($3.48 billion), an 8-percent rise from the year before, driven by strong performances across its banking, wealth management and insurance businesses.

    With Covid-19 wrecking havoc on the global economy, the bank’s outlook for 2020 is more muted.

    Although we are hopeful that a gradual recovery of consumer confidence and sentiments will start to set in towards the end of 2020, a stronger and steady economic recovery will likely be a 2021 event,» Tsien and chairman Ooi Sang Kuang said in the opening message.

    In the opening message, Tsien noted the bank’s progress in contributing towards a more sustainable future, highlighting that the bank brought in almost half of its S$8 billion in sustainable finance assets in 2019 alone, including clean and renewable energy projects using solar and wind.

    The bank previously declared its intention to build a sustainable finance portfolio of S$10 billion by 2022

    While not receiving double-digit pay hikes as they did last year, the CEOs of Singapore’s «Big Three» still managed to grow their coffers on the back of record years at the banks.

    Despite his pay rise, Tsien still trails Piyush Gupta, Asia’s highest-paid banker, who received S$12.1 million in 2019 – about 2-percent more than 2018 – in his 10th year at the helm of DBS.

    United Overseas Bank (UOB) deputy chairman and CEO Wee Ee Cheong received S$10.75 million ($7.53 million) in 2019, a 1.8-percent increase from the year before.

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  • HSBC Self-Reports Potential Money-Laundering Breaches

    HSBC Self-Reports Potential Money-Laundering Breaches

     The London-headquartered bank’s Australian unit disclosed the potential breaches in a regulatory filing last week.

    The bank flagged potential money laundering breaches to local watchdog AUSTRAC, adding that «regulators and other bodies may make findings that the bank has engaged in misconduct, including breaches of law or conduct that falls below community standards and expectations».

    The breaches include small amounts of cross-border transactions involving non-banking financial institutions which HSBC was unable to properly report due to technical reasons.

    HSBC is amongst the latest lenders in Australia to proactively disclose internal money-laundering lapses amidst the unraveling of the Westpac scandal that allegedly involved 23 million breaches of anti-money laundering laws that included payment facilitation between known child abusers. In addition to resignations, senior executives such as Brian Hartzer and Peter King, former and interim chief executive of Westpac, respectively, will face trial as defendants in a case filed by U.S. investors.

    In December last year, NAB also self-reported anti-money laundering failures with regards to mischarged fees to alleged hundreds of customers and its chairman Philip Chronican assured shareholders of reasonable enforcement.

    The message we have had from AUSTRAC is that we are not going to be measured to a perfect standard, Chronican said. We are going to be measured to a standard that we fix things when we find them and that we put the energy and resources into fixing it and we show the right attitude towards resolution of the issues.

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  • Axa’s Architas Launches Asia Business

    Axa’s Architas Launches Asia Business

    The firm has launched a Hong Kong-based asset management business and made several appointments to support its growth.

    Architas, part of the global Axa group, was approved by Hong Kong regulators as an asset manager last week. The firm announced several appointments: Zaid Alrifai as head of Architas Asia; Mai Khanh Vo as chief investment officer; and Beatrice Jiang as head of legal and compliance.

    Alrifai joined Axa in 2009, and was most recently its Hong Kong-based head of business development. Mai, Axa Asia’s head of investment, joined the firm in 2017, after almost 19 years at Amundi Asset Management in France. Jiang joined the Axa in 2018 and was previously legal counsel at BNP Paribas Investment Partners.

    Supporting Architas Asia’s operations are offshore responsible officers Nicolas Deschamps, Architas global head of client group, and Jaime Arguello, global chief investment officer.

    The launch of our Hong Kong business is a key milestone in our mission to drive the growth of open-architecture investment solutions, said Matthieu André, who was appointed CEO of Architas in January. Previously, he was deputy CEO and chief strategic development officer of Axa Europe. He joined the firm in 1995.

    André said Architas’ move strategically supports Axa group’s unit-linked strategy in Asia by providing credible and independent fund selection.

    In 2017, Architas launched three Irish-domiciled globally diversified multi-manager funds as part of its regional offer in Asia. The firm recorded €35 billion in assets under management as of 31 December 2019.

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  • UBS Bonus in Times of Crisis

    UBS Bonus in Times of Crisis

    UBS has had a great start to the year 2020 – and yet, under the impression of the coronavirus pandemic, the company plans to curtail bonus payments, if shareholders are forced to take a cut of their dividend.

    Should UBS not suddenly unearth a negative surprise when managers put together first-quarter results in coming days, the bank will present a very nice set of numbers: net income for the first three months of 2020 amounted to about $1.5 billion, a third above the year-earlier figure, the bank said in a statement on Thursday.

    With a strong operating performance in all business divisions, even after accounting for credit loss expenses and own credit valuation adjustments, the bank will exceed the expectations of analysts (which date back to the time before the pandemic). It seems unlikely though that the boom will continue under the current circumstances.

    It seems that Switzerland’s largest bank succumbed to the pressure applied by the finance regulator Finma and the demand for the solidarity of the management with shareholders. Should the bank not be able to pay the second installment of the dividend in the autumn of 2020 because of a weaker performance this year, the board and executive will also see their variable payment components affected.

    In that case, the bank will not pay its top managers a cash bonus. The bank would instead convert the bonus into deferred equity and similar financial products.

    UBS also said it might resort to additional measures with respect to the pay of Chairman Axel Weber and CEO Sergio Ermotti. The latter is one of Switzerland’s best-paid managers. He earned a total of 12.5 million Swiss francs in 2019.

    Credit Suisse, which also altered the way it will pay out the dividend to shareholders, didn’t make a statement in regard to pay. It has said in mid-March that it had a successful start to the year.

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  • Pandemic Causes Virtual Banking Launch Delays

    Pandemic Causes Virtual Banking Launch Delays

    Hong Kong’s newly licensed virtual banks will look to delay their launches due to an ongoing coronavirus pandemic.

    Since the Hong Kong Monetary Authority issued eight virtual bank licenses last year and earmarked February this year for the final launches, the city has been victim to over 1,000 cases of coronavirus infections and four deaths.

    With the exception of ZA Bank – jointly owned by mainland online insurer ZhongAn Online P&C Insurance and property developer Sinolink Group – no licensed digital lenders have fully kicked off for business.

    Of the seven remaining virtual banks, three have made soft launches for trials – Ant Bank, Airstar Bank – jointly owned by mobile maker Xiaomi and Hong Kong-headquartered financial services group AMTD – and Mox.

    The remaining four – WeLab Virtual Bank, Ping An OneConnect Bank, Tencent-backed Fusion Bank and Bank of China (Hong Kong)-backed Livi Bank – have yet to announce any launch dates, according to a report citing the pandemic as the cause for delay.

    The outbreak of Covid-19 has inevitably affected the virtual banks’ preparation for the launch of the business, according to a statement from the HKMA.

    Hong Kong is not alone in delaying digital banking launches in a region where various financial hubs have been vying to enhance their capabilities in the space including, most notably, rival Singapore. The city-state had originally planned to unveil up to five license winners from the reported 21 applicants in June 2020.

    The delayed license issuance will allow applicants to] focus resources on ensuring monetary and financial stability and ensuring that financial institutions remain resilient, and able to perform their role in supporting businesses and individuals through this challenging time, the MAS said, adding it could resume the process in the second half of the year.

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  • UOB Chief Sees Pay Rise

    UOB Chief Sees Pay Rise

    The board has also recommended a final dividend of 55 cents and a special dividend of 20 cents per ordinary share. UOB deputy chairman and CEO Wee Ee Cheong received $10.75 million ($7.53 million) in 2019, an increase of 1.8 percent from last year, the bank said in its Annual Report, published on Wednesday.

    Apart from his base salary of S$1.2 million, Wee received S$9.52 million in bonuses, 60 percent of which will be deferred and vested over the next three years. Of the deferred variable pay, 40 percent will be issued in deferred cash, while the balance will be in the form of share-linked units. He also received S$32,000 in benefits-in-kind and transport-related benefits, the report said.

    The bank also said it decided to defer the adoption of a revised directors’ fee structure that would raise their fees, recommended by independent consultant Aon Hewitt and approved by the board in 2019, in view of the challenging environment exacerbated by the COVID-19 outbreak and in anticipation of difficult times ahead.

    The bank, earlier announced record net earnings of S$4.34 billion ($3.1 billion) in 2019, up 8 percent from 2018.

    In the report, Wee reaffirmed the bank’s confidence in Asean, saying that structural shifts in global supply chains present many opportunities in the region, which the bank is well-placed to capitalize on.

    In the past year, UOB opened its first branch in Vietnam’s capital Hanoi, marking the bank’s first foray out of Ho Chi Minh City, where it has operated a representative office since 1993. The bank also acquired a Vietnam asset manager, in line with regionalization plans.

    The bank also opened its seventh branch in Zhongshan, Guangdong, to support the Asean-Greater Bay Area trade flows arising from the manufacturing, information technology and logistics sectors, and is enhancing its support for sectors that support the region’s economic growth, such as through its regional U-Solar program. This year is also the first time the bank has included a standalone sustainability report.

    According to the bank, it issued $950 billion in sustainable financing, including green loans, sustainability linked loans and loans for green-certified buildings in 2019. It also has $1 billion in AUM of investments that incorporate ESG factors and/or social impact assessment in the investment process.

  • CIMB Singapore Partners Security Token Offerings Platform

    CIMB Singapore Partners Security Token Offerings Platform

    The bank’s partnership with iSTOX will expand private capital markets access for its clients.

    CIMB Singapore is partnering ICHX Tech to allow its clients in the Asean region to raise funds in a faster, more flexible and efficient way on its blockchain-enabled platform, a press release on Wednesday announced.

    The firm operates Singapore-based platform iSTOX, which supports the issuance, custody and secondary trading of digitized securities using advanced smart contracts and distributed ledger technology to streamline the process.

    We are pleased with this partnership to provide our clients with an alternative digital solution as digitization is one of the pillars that we are looking at to build aggressively within the bank in the next few years, Victor Lee, CEO of CIMB Bank Singapore, said in the statement.

    Founded in 2017, iSTOX is backed by Singapore Exchange (SGX), Temasek Holdings subsidiary Heliconia, Japan’s Tokai Tokyo Financial Holdings, Thailand’s Kiatnakin Phatra, and South Korea’s Hanwha Asset Management.

  • Bank of Singapore’s Global Head of Products Exits

    Bank of Singapore’s Global Head of Products Exits

    The longstanding veteran resigned after over 11 years with the Singaporean private bank. Marc van de Walle, senior managing director and global head of products with Bank of Singapore resigned earlier this week, a spokesperson for the bank confirmed.

    “After more than a decade with the bank Marc Van de Walle has decided to pursue other interests,» the spokesperson said.

    As for his successor, we will begin by evaluating internal candidates first, given our strong bench strength and their familiarity with the bank’s strategy. This does not exclude external candidates and we always welcome new talents to bring in new experiences and external insights into our organization.

    Van de Walle first joined OCBC’s private banking arm in 2009 when it was acquired from ING where he had just spent over a dozen years including as its general manager of retail and private banking.

    In his decade-plus stint with Bank of Singapore, Van de Walle oversaw an effective expansion of its product capabilities and achievements including in discretionary portfolio management (DPM) where it is a leader amongst Asian private wealth managers by asset penetration rate. In mid-2019, the bank said that it registered DPM asset growth of 40 percent in the previous two years.

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  • HSBC Expands Wealth Portfolio Intelligence Service

    HSBC Expands Wealth Portfolio Intelligence Service

    The bank said it expanded its service to new asset classes in response to the increasing demand for reviewing the investment portfolio due to recent market volatility.

    HSBC’s Wealth Portfolio Intelligence Service (WPIS), offered to its high-net-worth «Jade» segment, will add bonds, equities, currencies, cash and time deposits, the bank said in a statement on Tuesday.

    The service, powered by Blackrock’s Aladdin Wealth platform, uses similar tools that institutional investors use to analyze risk exposure. The bank said that since its introduction to Jade clients in 2019, it has generated over 20,000 reports on risk insights and analysis for their unit trust holdings.

    As the enhanced WPIS covers all the major elements of a multi-asset wealth portfolio, it «creates new opportunities to build resilient investment portfolios in alignment with clients’ personal risk and investment preferences,» said Greg Hingston, regional head of Wealth and Personal Banking, Asia Pacific, and head of Wealth and Personal Banking, Hong Kong, in the statement.

    Higher Demand for WM Services

    The bank said it is seeing increased demand for wealth management services among its affluent customers. Apart from personalized investment solutions and advisory services, Jade hopes to attract «salaried millionaires» who prioritize self-enrichment with experiential offerings and a luxury concierge.

    In 2019, four Jade Centres were opened in Singapore, Hong Kong, and Shanghai. This year, HSBC opened two more Jade Centres in Hong Kong, and plans to open one in Beijing.