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  • China Wants Macau as Financial Hub

    China Wants Macau as Financial Hub

    Beijing has directed state-owned banks and enterprises to help set up infrastructure in Macau to aid financial diversification, and to serve as a contingency plan if the situation in Hong Kong worsens.

    Two officials who helped develop the Shanghai stock exchange moved to Macau to help establish its yuan-based stock exchange, one of the sources told «Reuters». Chinese officials, and bankers in Hong Kong, say the push to develop financial infrastructure in Macau is part of a plan to avoid any major market disruption in Hong Kong that could impact Chinese businesses.

    The financial industry used to be an idea that we reserved for Hong Kong. We used to give all the favorable policies to Hong Kong. But now we want to diversify it, said one Chinese official who requested anonymity.

    The idea is not for Macau to replace or undermine Hong Kong but for China to have a contingency plan in case the situation in Hong Kong worsens, sources at Reuters added.

    The slew of new policies for Macau is aimed at diversifying the city’s casino-dependent economy into a financial center. Macau’s casino operators, which have been hit by slowing economic growth and the Sino-U.S. trade war could look forward to the development opportunities in Hengqin, casino executives who were interviewed said.

    Xi Jinping has made very clear that he wants a diversified Macau economy, said one Chinese official. The future focus will be on tourism and finance, to make it a center to host international meetings like Singapore.

    Besides establishing a yuan-denominated stock exchange and speeding up a yuan settlement center which is currently being developed, the policies will also be looking at land allocation in Macau. As part of that effort, Macau will be allocated more land on the mainland island of Hengqin to develop in areas such as education and healthcare.

    These policies also mark the 20th anniversary of the former Portuguese colony’s return to Chinese rule, as Xi plans a visit to Macau next week. There, Xi is expected to announce policies to further integrate Macau with mainland cities in the Greater Bay Area, the region around the Pearl River Delta that also includes Hong Kong, according to Chinese officials and Macau executives.

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  • Thai Lender Emerges as Contender for Bank Permata

    Thai Lender Emerges as Contender for Bank Permata

    Indonesia, forecast to grow at 5 percent in 2020, offers growth potential for Bangkok Bank, which is looking for a new market in the region.

    Bangkok Bank is said to have emerged as the frontrunner for Bank Permata, Standard Chartered’s Indonesia bank, citing people familiar with the matter.

    The bank is said to be competing with Japan’s Sumitomo Mitsui Financial Group in the race for a 90-percent stake in Bank Permata in a deal worth $2.3 billion, and a winner could emerge as soon as next week.

    Bank Permata’s current major shareholders include Standard Chartered (45 percent) and PT Astra International (45 percent).

    In February, Standard Chartered signaled that its Permata investment is no longer considered core. Permata Bank reported net income of 711.4 billion rupiah ($50.7 million) for the first half of 2019, a significant jump from 288.8 billion rupiah a year before.

    Singapore banks DBS and OCBC are reportedly interested in the deal, though Indonesia’s Financial Services Authority has called SMFG the «most serious bidder.

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  • Tencent’s WeBank to Power China’s Blockchain Network

    Tencent’s WeBank to Power China’s Blockchain Network

    The Shenzhen-based firm will provide the tech for the country’s national blockchain consortium. WeBank, China’s first digital bank, will provide the technical infrastructure for the country’s nationwide blockchain-based service network (BSN), according to a Chinese state media report.

    BSN plans to offer infrastructure services for any Chinese or international entity that uses blockchain. According to the agreement, BSN will use WeBank’s open-source FISCO BCOS blockchain application ecosystem, and WeBank will provide technical support and training for BSN developers, the report said.a

    China is attempting to build a nationwide blockchain network to serve a range of state-controlled public services across the country, including telecommunications and energy management.

    Users in various industries often face dilemmas such as high cost of forming a chain, heterogeneity of the underlying platform, and inability to interact with data. Promoting the construction of public infrastructure at the bottom of the blockchain has become the meaning of pursuing the development of the digital economy, the report said.

    Led by the State Information Center, a think tank affiliated with the National Development and Research Commission, China’s highest central planning agency, the BSN consortium includes firms like WeBank, Huobi China, UnionPay, China Mobile and China Telecom.

    The project has been tested in 25 cities across China as well as Hong Kong and Singapore. It is expected to be tried out in more than 200 cities by 2020.

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  • Broking Pressures Prompt Cuts at Maybank Kim Eng

    Broking Pressures Prompt Cuts at Maybank Kim Eng

    The job cuts are part of a broader review that also affects Maybank Kim Eng’s regional institutional sales and research, and Hong Kong investment banking and advisory businesses.

    Maybank Kim Eng (KE), the investment banking arm of Maybank, is restructuring its retail brokerage operations, and 5 percent of its staff in Singapore, or about 30 people, are being laid off, the firm said in an internal memo circulated.

    About 3 percent of its global workforce of 2,000 are affected by the latest exercise. The firm has about 600 employees in Singapore, which includes 400 full-time staff and self-employed remisiers, though none of the latter were affected, «BT» reported. Back office staff are among those being let go.

    The restructuring was prompted by changes in the investment banking landscape, including shifting customer preferences, increasing automation and digitalization of brokerage offerings, and changes in the regulatory environment, a spokesperson told the newspaper in a statement.

    Lower trading commissions and the growing popularity of passive investing with robo-investors are putting a strain on securities brokers like Maybank KE, which reported a pre-tax loss of 7.3 million ringgit ($1.75 million) for the first nine months of 2019, compared to a pre-tax profit of 227.4 million ringgit for the same period last year.

    Singapore, however, continues to be the firm’s largest market outside its home base Malaysia. Maybank KE is the city-state’s 15th-largest broker, with a 3.38 percent market share.

  • UBS Optimus Foundation Launches Singapore Office

    UBS Optimus Foundation Launches Singapore Office

    UBS Optimus Foundation has established its first office in the city-state to expand its philanthropic offerings to clients in Asia. This is the foundation’s seventh office worldwide and third in Asia, after Hong Kong and Beijing.

    UBS said the Singapore office will engage the bank’s clients on philanthropic activities related to health, education and the protection of children, as well as sustainable and environmental causes. The foundation, which counts as one of the world’s largest international donors in China, supports over 200 programs around the world that are worth more than 200 million Swiss francs (S$274.5 million).

    Philanthropy and sustainable investing are an increasing focus of our clients in the region, many of whom are seeking investment opportunities in sectors including healthcare, oncology, and affordable education, said August Hatecke, co-head of UBS Wealth Management Asia-Pacific and the country head of UBS Singapore in a media statement on Monday.

    To mark the launch of the new office, UBS employees in Singapore raised a sum exceeding S$100,000 which, together with matching contributions from UBS, will fund the foundation’s first program in Singapore. Last year, the UBS Optimus Foundation raised 65 million Swiss francs (S$89.2 million) and committed to 92 new programs to reach out to close to 3 million children.

    We expect unprecedented amounts of wealth in Asia to be transferred across generations over the next 20 years. This will be a significant boost on philanthropy as many entrepreneurs are committed to using their wealth to create a legacy that has a positive social impact, said Desmond Kuek, the chairman of the UBS Optimus Foundation Singapore.

  • Vietnam second among ASEAN members in attracting fintech funding

    Vietnam second among ASEAN members in attracting fintech funding

    Vietnam’s fintech firms secured $410 million, or 36 percent of the global capital pouring into Southeast Asia between January and September, behind Singapore.

    The country’s share of regional venture capital funding devoted to fintech soared from just 0.4 percent in 2018, according to a report prepared by the United Overseas Bank (UOB), PwC and the Singapore Fintech Association (SFA).

    Singapore remained the top destination for regional fintech investment, with 51 percent, down from 53 percent in 2018, with Indonesia in third place with 12 percent, down from 37 percent last year.

    ASEAN Fintech Funding 2019PercentageSingaporeVietnamIndonesiaOthersSource: Tracxn

    By the end of the third quarter this year, ASEAN had received $1.14 billion in funding for fintech firms, up sharply from $35 million in 2014, the report said.

    The surge in investments in Vietnam this year is attributable to two large deals, both in digital payments. In July, digital payment firm VNpay received $300 million in investment from Japanese multinational conglomerate SoftBank and Singaporean sovereign wealth fund GIC.

    And in January, e-payment app MOMO Pay landed $100 million from investors led by American private equity firm Warburg Pincus in its Series C funding round. The two deals accounted for 98 percent of Vietnam’s total fintech funding in the first nine months.

    In terms of the number of funding deals in 2019, Vietnam came third in ASEAN at 8 percent of total deals, up from 2 percent in 2018, behind Singapore and Indonesia with 51 percent and 28 percent respectively.

  • UBS and Credit Suisse Rediscover Their Clients

    UBS and Credit Suisse Rediscover Their Clients

    UBS and Credit Suisse have courted the richest of the rich for many years – it became an end in itself. Now, the signs are that a rethink is underway.

    The two big banks have not been shy to show off their efforts to cater to ultra-rich clients, hoping to attract even more of what they claim is a lucrative business.

    Despite the fact that margins take a nosedive when banking with demanding clients, investors were told that the ultra-high net worth (UHNW) segment was lucrative and more stable than other segments. The investment banks are depicted as a competitive advantage for uber-rich clients to use their infrastructure for complex transactions.

    Still: the story as it was told by the banks didn’t convince their shareholders. They seem to put a lower value on the big banks than on private banks such as Julius Baer and Vontobel, with its focus on investment-related business.

    The two Swiss wealth management giants seem to have come around belatedly and now both simultaneously announced the launch of a push into the business with clients who have a little less money to invest.

    UBS, for instance, pledged to serve clients with assets of $500,000 to $5 million in a faster and more targeted fashion – and no longer according to the classic high net worth (HNW) approach. Credit Suisse will subsume the business with the not-so-rich in a sub-division. The banks say that this will help them respond better and more efficiently to demands in this segment.

    Two major areas of concern can be identified in the strategies and developments at the big banks, which prompted the repositioning. «Big banks realized that the focus on the UHNW business wasn’t enough to make successful and full use of their capacity,» said Robert Buess, financial services practice adviser at Oliver Wyman.

    With the focus on the richest clients, the erosion of margins accelerated despite the higher volumes of net new money.

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  • HSBC Brings Clients to Borneo

    HSBC Brings Clients to Borneo

    HSBC Jade invited clients to a trip traditionally reserved for senior staff and private banking clients to promote climate change awareness.

    The HSBC Sustainability Expedition was based in Malaysian Borneo where clients ventured into the Danum Valley’s rainforest encountering various animals including orangutans, Borneo pygmy elephants, flying squirrels and gibbons. The expedition was done in partnership with Earthwatch Institute and joined by science from the Royal Soci<ty South East Asia Rainforest Research Partnership (SEARRP).

    High net worth individuals in Asia are showing increased interest in sustainable living and incorporating ESG factors when investing, said Toby Chan, group head of Jade and Top Tier, HSBC retail banking and wealth management.

    We created the Sustainability Expedition for Jade to improve our clients’ knowledge of climate change and deepen understanding of sustainability through hands-on scientific research and expert conversations.

    The bank invited HSBC Jade clients from mainland China, Hong Kong and Singapore to engage in a myriad of activities including habitat assessment; the gathering of evidence on plant and animal life; and the planting of 80 Dipterocarp trees, a species prevalent in Borneo. In addition, the bank educated clients on sustainable investing and its role in transitioning to a low carbon economy.

    Five days in Danum Valley allow you to be really immersed in the whole ecosystem, the greenery, taking in what is living on earth, and how we should save our planet, said one Singapore client, according to the bank’s release.

    I will remember these particular actions on sustainability that I can do in my own ability – for example, decision making in terms of vendor purchasing, renovations, and any other matters where I’m responsible.

  • Cyberattack-Prone Banks Risk Over Half of Profits in Singapore

    Cyberattack-Prone Banks Risk Over Half of Profits in Singapore

    Banks that lack measures to withstand cyberattacks risk up to 65 percent of their quarterly profits, according to a recent stress test study by the Monetary Authority of Singapore.

    Direct and indirect impact from cyberattacks against banks is estimated to cause losses of 35-65 percent and 20-50 percent of quarterly profits, respectively. According to the study, profit declines are attributable to reputational impact, funds were stolen, legal charges and marketing expenses.

    The stress tests revealed likely vulnerabilities from theft and disruption-related cyberattacks. Examples of theft-related attacks include hacking of ATMs to dispense cash and bank payment systems. Disruption-related impact includes denial-of-service (DoS) attacks to prevent access to the internet and mobile banking apps or disruption to internal payment processing systems. Damage or corruption of client data was also cited as another example of a cyberattack.

    The aforementioned figures reflect costs without contingency measures and when included, risks are significantly improved with banks expected to lose quarterly profits of 20-35 percent and 12-25 percent from direct and indirect impact, respectively. In order to reduce risks from cyberattacks, banks have adopted multiplied layers of security controls to protect data and funds; added DoS mitigation measures such as clean pipe services; and backed up critical data regularly.

    In-house measures aside, it is also heeding greater attention to third-party service providers. Periodic audits are made to verify the ongoing effectiveness of existing security and business continuity measures are in place for a switch to an alternative provider or to in-house operations in the event of a disruption.

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  • HSBC Grants Extra Day Off in Hong Kong

    HSBC Grants Extra Day Off in Hong Kong

    Due to «unprecedented circumstances» British lender, HSBC is giving its Hong Kong employees an extra day off in 2020. The bank employs about 21,000 people in the city.

    In a gesture of encouragement as six months of continuing street protests have roiled the financial hub, British bank HSBC is giving its Hong Kong employees an extra day off next year. The decision was announced in an internal memo on Monday by Diana Cesar, the bank’s local chief executive. The memo was confirmed by a bank spokeswoman.

    Thanks to your perseverance and dedication, HSBC has been able to sustain our operation and stand by our customers in these unprecedented circumstances, Cesar said in the memo. HSBC employs about 21,000 people in the city and makes around 90 percent of its profit in Asia.

  • HSBC Private Bank Makes Key Appointments

    HSBC Private Bank Makes Key Appointments

    The bank has made two appointments that support its growth ambitions in Asia Pacific. HSBC Private Bank has appointed Jackie Mau as regional head of UHNW, Asia Pacific and Abdel Ben Tkhayet as head of investment services and product solutions (ISPS), Asia Pacific, the firm announced in a press release on Thursday.

    Mau was most recently co-head of ISPS, Asia Pacific for HSBC Private Banking. He joined HSBC in 2003 and has held senior client-facing roles across Investment Banking and Private Banking in both Hong Kong and Thailand.

    In his new role, Mau will be responsible for leading UHNW business in Asia, ensuring that coverage and propositions for clients with sophisticated wealth needs are met. He will report to Asia Pacific head of private banking Siew Meng Tan.

    Ben Tkhayet will be responsible for leading the products and investment counselor teams in Asia and will continue to develop products and investment solutions for clients in the region, the announcement said.

    He joined HSBC in 1997 and has held senior roles in the Private Bank and Global Banking and Markets divisions. He was most recently the private bank’s head of FICC and Equities, Asia Pacific. Ben Tkhayet will continue to report to chief investment officer Stuart Parkinson and to Asia Pacific head of private banking Tan.

    Since renewing our strategic focus on the UHNW segment, clients are already seeing the benefits of a new coverage model, new solutions specialists and segment management teams, and an enhanced product set for sophisticated needs, Tan said.

    HSBC said it is hiring for 700 roles over five years to the end of 2022 and investing $100 million in digital and technology over 2019 and 2020 to grow its Asian private banking business.

    In September, it announced a slew of appointments to strengthen the bank’s investment counseling coverage for Taiwan and mainland China.

  • Banks Unprepared for Cyberattacks Risk More Than Half of Profits in Singapore

    Banks Unprepared for Cyberattacks Risk More Than Half of Profits in Singapore

    Thanks that lack measures to withstand cyberattacks risk up to 65 percent of their quarterly profits, according to a recent stress test study by the Monetary Authority of Singapore.

    Direct and indirect impact from cyberattacks against banks are estimated to cause losses of 35-65 percent and 20-50 percent of quarterly profits, respectively. According to the study, profit declines are attributable to reputational impact, funds were stolen, legal charges and marketing expenses.

    The stress tests revealed likely vulnerabilities from theft and disruption-related cyberattacks. Examples of theft-related attacks include hacking of ATMs to dispense cash and bank payment systems. Disruption-related impact includes denial-of-service (DoS) attacks to prevent access to the internet and mobile banking apps or disruption to internal payment processing systems. Damage or corruption of client data was also cited as another example of a cyberattack.

    The aforementioned figures reflect costs without contingency measures and when included, risks are significantly improved with banks expected to lose quarterly profits of 20-35 percent and 12-25 percent from direct and indirect impact, respectively. In order to reduce risks from cyberattacks, banks have adopted multiplied layers of security controls to protect data and funds; added DoS mitigation measures such as clean pipe services; and backed up critical data regularly.

    In-house measures aside, it is also heeding greater attention to third-party service providers. Periodic audits are made to verify the ongoing effectiveness of existing security and business continuity measures are in place for a switch to an alternative provider or to in-house operations in the event of a disruption.

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  • Singapore Fintech SaaS Raises $3 Million for Expansion

    Singapore Fintech SaaS Raises $3 Million for Expansion

    The AI-backed platform hopes to expand to the U.K. and Hong Kong and has already started testing in those markets.

    Osome, a Singapore-based business services firm that aims to digitize traditional corporate management processes, has secured $3 million in funding led by Target Global, with participation from Phystech Venture and AdFirst, the company announced on its blog on Tuesday.

    The raise follows $2 million secured in December 2018 for product development and market testing in Australia and Hong Kong. It was also led by Target Global, a venture capital firm based in Berlin, Germany, with 700 million euros in assets under management.

    Osome is led by Singapore-based serial entrepreneur Victor Lysenko, who has two exits as CEO and founder: Russian neobank Rocketbank and Groupon Russia.

    The firm uses a cloud-based platform to help business owners and entrepreneurs with legal compliance and tasks such as payroll, accounting, taxation, company formation, and filing reports.

    Launched in 2018, the firm has already amassed 2,300 customers in Singapore. It now has its eyes on other global financial centers.

    «The company’s exponential growth in Singapore both in terms of revenue and customer base validates the business model and represents a solid ground for further growth both inside and outside of the region,» said Phystech Ventures partner Olga Maslikhova.

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  • UOB Boosts Solar Power

    UOB Boosts Solar Power

    UOB is pushing solar power usage by offering various financing solutions linked to solar-powered equipment for both business owners and individuals.

    Businesses and individuals in Singapore seeking to adopt solar energy can choose from the bank’s three selected local partners: SolarGy, SolarPVExchange and Sunseap Group. The partners will provide service across installation, commissioning, operations and aftersales.

    For business owners, UOB will provide solar equipment financing and for homeowners, the bank will offer a zero percent interest rate installment plan of up to 36 months.

    The Singapore arm of the initiative is part of UOB’s broader U-Solar program to boost solar power usage across the region. The program first launched in October 2019 before subsequently rolling out in Indonesia and now Singapore.

    Solar power is not only a clean and efficient energy source but has also become a more economically viable option as the technology to harness solar energy matures,» said Frederick Chin, UOB’s head of group wholesale banking and markets. «Despite this, many companies and consumers remain hesitant to adopt solar power, believing that it requires high upfront investment.

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  • Citi Scores Two Investment Bankers in Asia From Rival

    Citi Scores Two Investment Bankers in Asia From Rival

    Citigroup hired two investment bankers from HSBC Holdings in Asia as part of its efforts to strengthen its Chinese real estate advisory business. Kara Wang has joined Citigroup as managing director and co-head of real estate investment banking for Asia, according to an internal memo. The move was confirmed by James Griffiths, Citigroup’s Hong Kong-based spokesman. Dayday Zhou, a director of Wang’s team at HSBC, will join the bank in January, the spokesman added. The latest Citigroup hires will raise the number of Asia corporate and investment banking hires to six since December.
    The U.S. bank is hoping to bolster income in the region, its biggest market outside of North America. In the third quarter, Citigroup’s revenue in Asia grew 6% to $4.02 billion from a year earlier. Meanwhile, HSBC is undergoing huge changes as acting chief executive Noel Quinn undertakes cost-cutting and business transformation Citigroup ranks ninth advising share sales by real estate companies in Greater China, down from fifth in the same period last year, according to data compiled by Bloomberg.
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