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Tag: Banking

  • 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.

  • 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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  • 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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  • HSBC Names Asia Private Banking COO

    HSBC Names Asia Private Banking COO

    HSBC continues to bolster its private banking business in Asia with its hire of chief operating officer, who joins from J.P. Morgan’s wealth arm.

    Sharon Oh joins HSBC Private Banking as its chief operating officer, replacing Gaurav Rao, who recently relocated to London for another role within the private bank. In her new role, Oh will report to Siew Meng Tan, APAC head of HSBC Private Banking, and Anil Venuturualli, global COO of the business. A spokesperson for the bank confirmed the hire.

    Oh was most recently with J.P. Morgan’s private banking arm where she was its chief of staff in the London-based global institutional client segment. Prior to this, Oh spent five years with J.P. Morgan Private Bank’s Hong Kong-based unit and was also previously Credit Suisse’s North Asia COO.

    Earlier this year, HSBC merged its retail, wealth management and private banking business into a single $1.4 trillion unit – WPB – in a bid to drive double-digit growth in client assets and revenue in the coming years.

    Oh will help us accelerate the delivery of our key initiatives and to harness the benefits of becoming part of WPB, Tan said in a statement.

  • HSBC Names Asia Private Banking COO

    HSBC Names Asia Private Banking COO

    HSBC continues to bolster its private banking business in Asia with the latest hire of chief operating officer, formerly with J.P. Morgan wealth arm.

    Sharon Oh joins HSBC Private Banking as its chief operating officer, replacing Gaurav Rao, who recently relocated to London for another role within the private bank. In her new role, Oh will report to Siew Meng Tan, APAC head of HSBC Private Banking, and Anil Venuturualli, global COO of the business. A spokesperson for the bank confirmed the hire.

    Oh was most recently with J.P. Morgan’s private banking arm where she was its chief of staff in the London-based global institutional client segment. Prior to this, Oh spent five years with J.P. Morgan Private Bank’s Hong Kong-based unit and was also previously Credit Suisse’s North Asia COO.

    Earlier this year, HSBC merged its retail, wealth management and private banking business into a single $1.4 trillion unit – «WPB» – in a bid to drive double-digit growth in client assets and revenue in the coming years.

    Oh will help us accelerate the delivery of our key initiatives and to harness the benefits of becoming part of WPB, Tan said in a statement.

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  • HSBC, StanChart to Scrap Dividends on BOE Orders

    HSBC, StanChart to Scrap Dividends on BOE Orders

    Recession fears drove the Bank of England to call the U.K.’s largest banks, including HSBC and Standard Chartered, to scrap dividends and share buybacks.

    Alongside Lloyds, Royal Bank of Scotland and Barclays, the two largest British lenders in Asia made statements to temporarily halt shareholder payouts and share buybacks for 2019 and throughout 2020 following discussion with the Bank of England. The five largest banks in the U.K. had originally planned for 7.4 billion pounds ($9.3 billion) in dividend payments over the next two months.

    In addition, the BoE also ordered banks to scrap cash bonuses to prepare for a likely recession.

    The PRA also expects banks not to pay any cash bonuses to senior staff, including all material risk-takers, and is confident that bank boards are already considering and will take any appropriate further actions with regards remuneration over coming months, said the BoE’s head of prudential regulation authority Sam Woods in a statement.

    Whilst workers will undoubtedly feel the brunt of the economic malaise, numerous efforts are being made to shift some of the burden to others including corporates and their shareholders.

    In addition to dividend cuts, banks have also committed to retaining jobs with HSBC, as well as a raft of global banking giants, recently announcing temporary halts to job cutting. The measures will retain costs that were due for unloading and over 60,000 jobs.

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  • Citi Extends Relief Payouts to Hong Kong

    Citi Extends Relief Payouts to Hong Kong

    Lower-income staff at Citi will receive payouts in line with chief executive Michael Corbat’s call to extend global support during the crisis.

    Hong Kong-based employees with an annual base salary of HK$470,000 (US$60,622) or less will receive a one-time payment of HK$8,000 ($1,032). This follows the bank’s announcement last week to provide economic support to 75,000 staff globally including $1,000 to each worker in the U.S. with an annual salary of $60,000 or below.

    This initiative is for colleagues who are more likely to face economic hardship in the current situation,» said Angel Ng Yin-yee, Hong Kong and Macau chief executive at Citi, in a statement. «We hope that our support will help lighten their load as they cope with other challenges and family priorities during this time.»

    Citi also made a similar announcement in Singapore, highlighting relief measures to support retail and institutional clients such as interest and fees waivers, tenure extensions, alternative settlement arrangements, and loan payment reduction programs. And in support of the Singapore government’s latest financial relief program, Citi will also offer clients the option to convert outstanding unsecured balances from their Citi credit cards into low-cost term loans.

    «We recognize the financial stress to our clients as a result of the COVID-19 situation,» said Amol Gupte, ASEAN head and Singapore country officer at Citi, expressing support for clients and the city-state’s government.

    For the time being, global banks continue to demonstrate support for the global economy, especially the economically vulnerable, amidst a persistent coronavirus pandemic. In addition to payouts or loan-related relief, the industry has committed to temporary job cut halts, dividend cancellations and even free online classes for homebound children.

  • DBS Adds Online Classes to Relief Portfolio

    DBS Adds Online Classes to Relief Portfolio

    The Singaporean lender continues to provide innovative digital support to locals affected by the ongoing pandemic alongside financial relief. To help cope with the crisis, DBS will offer free online supplementary classes for primary and secondary school students. In terms of financial relief, home loan payment relief and free Covid-19 relief insurance coverage will be provided, the latter of which has already attracted 600,000 customers.

    And for SMEs, the bank rolled out a 6-month principal repayment moratorium on property loans and collateral-free digital business loan of up to S$50,000 ($35,000).

    While the Covid-19 situation is an unfolding one, it is apparent that some sectors and individuals are being hit particularly hard,» said Shee Tse Koon, Singapore country head at DBS, adding that more relief measures will be announced next week. As the largest bank in Singapore, DBS is committed to joining the industry to help Singaporeans and SMEs tide through these challenging times.

    More than just providing pure financial support, DBS has stood out for its creative approach to providing potentially effective relief.

    In addition to online classes, the bank recently rolled out a homegrown digital food delivery platform to help its F&B SME client base boost revenues in dire times of need. Interested users will be supported by the bank for end-to-end processes from marketing and e-menus to payment and physical delivery.

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  • UBS Boss Donates to Corona Efforts

    UBS Boss Donates to Corona Efforts

    Sergio Ermotti is donating 1 million francs towards pandemic relief efforts. The UBS boss is working from home in his native Ticino, which borders the hardest-hit area in Europe.

    The Swiss wealth manager’s CEO said he has dispersed 1 million Swiss francs ($1.1 million) in personal funds to his family’s foundations to help with relief efforts. Ermotti is working from home in Montagnola, a small Swiss village overlooking Lake Lugano and near the Swiss-Italian border.

    I hear about the difficult situation in hospitals and people who have lost members of their family. The situation is dramatic! Ermotti told Swiss tabloid Blick in an interview on Monday. His corona donation will be dispensed by a foundation he launched together with his wife and his siblings in 2011.

    Ermotti said the funds will be routed via non-profit organizations to people in need of emergency funds. UBS itself has also been generous, donating 30 million francs for patients and families in Switzerland affected by the virus’ outbreak.

    The crisis represents an opportunity for Ermotti to display UBS’ Swiss credibility: Now, we’re part of the solution and not part of the problem anymore, he told the outlet, alluding to Switzerland’s 2008 bailout of UBS.

    Last week, the Swiss government unleashed a massive bailout, enlisting banks like UBS to help small businesses battered by the crisis. «We received 10,000 loan applications within 36 hours. By Sunday night, all of them were processed and roughly 1 billion Swiss francs approved,» Ermotti said.

    UBS, like Credit Suisse, has pledged to donate any proceeds from the emergency loans to charity. Ermotti ends his nine-year tenure as CEO of UBS in November when Ralph Hamers, head of ING, takes over his job.

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