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Tag: Finance

  • Vietcombank continues to achieve record profits

    Vietcombank continues to achieve record profits

    State-owned lender Vietcombank reported record pre-tax profits of VND41.2 trillion (US$1.68 billion) for 2023.

    Its previous highest was VND37.4 trillion a year earlier.

    It made the bank the most profitable in the industry by a margin of tens of trillions of dong.

    Profits before credit risk provisioning were worth VND45.8 trillion, a 2.2% decline.

    But halving the provisioning to VND4.5 trillion meant the lender maintained profit growth.

    Vietcombank’s bad debts ratio (groups three to five) increased from 0.68% at the beginning of the year to 1% by the end, while loans that require attention (group two debts) surged by 40% to over VND5.55 trillion.

  • UBS It’s Major Shareholders Pull in Opposite Directions

    UBS It’s Major Shareholders Pull in Opposite Directions

    UBS can’t grow fast enough for newly onboarded financial investor Cevian. Meanwhile, two other major shareholders are now expressing concerns about the size of the new megabank in Switzerland.

    The program for integrating Credit Suisse is in place, and UBS will start acquiring the clients and legal units of the crisis-hit bank over the next few months. But the company’s major shareholders are now flexing their muscles.

    Shareholder representative Ethos Foundation expressed its concerns. The even larger banking behemoth could influence regulation in the country and undermine Switzerland’s ability to rein in banks’ risk-taking, the Western Switzerland-based organization says. Ethos advises investors who own up to 5 percent of all UBS shares.

    That is not all. Another investor, apparently one of the bank’s top ten shareholders, also voiced unease on condition of anonymity.

    According to the report, the professional investor fears a conflict may arise between UBS and the Swiss authorities and lawmakers over the bank’s size. Such a dispute could hamper the smooth running of the institution.

    In fact, an evaluation commissioned by the Federal Council on the «new» UBS and expected to be published in April is already causing nervousness. Finance Minister Karin Keller-Sutter recently said that the primary goal of bank regulation was to protect the state and taxpayers.

    While Ethos and Co. may be expressing concerns in this regard, the big bank cannot grow quickly enough for Cevian. The Swedish financial investor acquired UBS shares worth around 1.2 billion euros last December and expressed high hopes when it stepped onboard. Cevian thinks the major bank could double its stock price to 50 Swiss francs within a reasonable period.

    Among major shareholders, this has produced a tug-of-war between these parties – another focal point that the bank management, already busy with the Credit Suisse integration, has to grapple with.

    UBS has already commented on the report. The bank believes the focus on its balance sheet is misleading. About 20 percent of total assets are highly liquid, while 15 percent are mortgages for retail clients and wealthy private clients, which would only pose very low risks.

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  • Citi organizes Vietnam Digital Leaders Summit 2023

    Citi organizes Vietnam Digital Leaders Summit 2023

    Citi brought together about 100 leaders in the Vietnam technology landscape, including founders, management teams, and investors, to discuss how the new economy is shaping the future of Vietnam.

    The Vietnam Digital Leaders Summit 2023, hosted by Citi Commercial Bank (CCB) and Citi’s Investment Bank, featured keynote speeches and lively panel discussions covering various topics, from scale-up journeys and macroeconomic challenges to fundraising strategies.

    Speakers and panels also touched on investor perspectives on opportunities in Vietnam and stories on the strategic shift in focus from exponential growth to sustainable profitability. Many speakers addressed the opportunities and pitfalls of harnessing AI throughout the day.

    Shervone Saw, CCB’s Asia Digital Head, highlighted that Citi established its technology industry vertical eight years ago to support the startup ecosystem. The unit supports technology startups from infancy to maturity, offering customized solutions for every step of the journey.

    Citi’s global network powers companies as they expand into new geographies. Citi is a pioneer in the technology industry in Vietnam, witnessing the rapid rise of companies to the unicorn stage.

    At the event, James Perry, APAC Co-Head of TMT Investment Banking, showed that in 2023, private investment into technology companies in Southeast Asia is on track to surpass pre-Covid levels, despite substantial declines from the peak levels in 2021.

    “We understand the importance of having a structured and dedicated approach to support the demands of fast-growing tech firms, particularly in a low-growth and volatile macro-environment. Our goal is to work with clients to form a winning strategy, to achieve new milestones, and to help them deliver their strategic objectives,” said Lin Hsiu-Yi, ASEAN & Singapore Head of Citi Commercial Bank.

    In Vietnam, Citi has supported and served clients for nearly three decades, helping them navigate the opportunities and challenges of rapid growth and international expansion by enabling them to scale faster.

    This flagship event served as a platform for engagement, connection, and exploration of new growth opportunities for clients, investors, industry veterans, and the Citi team.

    “Whether clients are considering expansion, exploring partnerships, or seeking strategic financing, our dedicated team is ready to support their needs and enable their businesses to get into the next phase of growth,” said Ramachandran A.S., Vietnam Citi Country Officer.

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  • UBS Makes Extremely Bold Forecast

    UBS Makes Extremely Bold Forecast

    Switzerland’s largest bank puts out a view predicting a drastic cut in US interest rates by the Federal Reserve. Their forecast is completely out of sync with the rest of the market and peers.

    Every year, Saxo chief economist Steen Jakobsen draws significant attention in the financial markets with his list of ten Outrageous Predictions. They are sometimes meant to be taken with a pinch of salt although they often have a deeper background, prompting readers to think about things entirely differently.

    But you cannot often cast the economists at Switzerland’s largest bank, UBS, in much the same light.

    Yet on Monday, they surprised the market by leaning way out of the window when it comes to US interest rates next year as they believe that the Federal Reserve under Jerome Powell will cut rates by 2.50 to 2.75 percent by the end of 2024.

    It would not be an exaggeration to say that the forecast did not fit anyone’s consensus as the level they are forecasting rates to end up is about 275 basis points below current levels.

    That is almost four times as much as the markets are expecting, where predictions are for a cut of around 75 basis points. The UBS forecast is also way off the median forecast of a Fed funds rate of 5.1 percent at the end of 2024, or a cut of 25 basis points at best.

    According to Bhanu Baweja, chief strategist at UBS’s investment banking business, a continued decline in inflation will allow the Fed to start easing monetary policy from March on.

    The UBS experts also believe that the American economy will weaken far quicker than the market assumes and that there will be a slight recession by the middle of 2024, something that also contrasts with other economists who are predicting a soft landing instead.

  • Capvis Lures Investment from Chinese Giant Alibaba.com

    Capvis Lures Investment from Chinese Giant Alibaba.com

    Funds belonging to the Zug-based private equity specialist sell a stake to Alibaba.com. The China-based B2B platform intends to use it to expand and grow in Europe.

    Capvis has managed a coup. The Baar based private equity specialist has completed the sale of its majority stake in B2B platform operator Visable, an announcement sent by the company on Tuesday indicates.

    The sales price is not being disclosed.  Capvis bought a stake in Visable in 2017 and has developed into the European market leader for e-commerce platforms with the international marketplace europages based in Paris.

    Alibaba.com is a subsidiary of Chinese internet giant Alibaba International Digital Commerce.With this step, Capvis cements its position internationally. It was founded in 1990 and it is now, with the significantly larger Partners Group, one of the last independent pioneer private equity firms in Switzerland as former competitors such as Zurmont and Adveq have been sold to competitors in the meantime.

    Since its founding, Capvis has concluded 62 transitions corresponding to total capital of around 4 billion euros, with ten companies concluding successful IPOs.

  • Vietcombank makes biggest profit among lenders in Q3

    Vietcombank makes biggest profit among lenders in Q3

    Vietcombank remained the biggest profit earner among lenders in the third quarter, a period in which half of all listed banks saw smaller profits following a race to lure deposits.

    Vietcombank made a profit of VND9 trillion (US$375 million) in the third quarter, up 20% year-on-year, followed by MB with VND7.3 trillion, and BIDV with VND5.9 trillion.

    Meanwhile, Techcombank reported a profit of nearly VND5.9 trillion, down 12%.

    Twenty-seven listed banks have just released their financial statements for the first nine months. Instead of reporting huge profits like they all did over last three years, 14 banks reported smaller profits.

    BVBank’s profit dropped by 85% year-on-year to VND60 billion (US$2.5 million), and ABBank’s profit fell from VND1.75 trillion in the first nine months of last year to VND700 billion.

    These are the smallest Q3 profits the two banks have earned in five years, mainly due to capital costs increasing more than credit income. ABBank also faced pressure on credit risk provision costs.

    VPBank and Eximbank profits were halved, while earnings at VietABank, LPBank, BacABank, VietBank and SeABank dropped by 20% or more.

    Less than half of the listed banks enjoyed bigger profits, including Vietcombank (up 18%), BIDV (12%), VietinBank (10%), MB (10%), ACB (11%), HDBank (8%), VIB (7%), Sacombank (54%), MSB (8%), OCB (48%), NamABank (10%) and KienlongBank (25%).

    Among the 10 banks with the largest profits, Techcombank, VPBank and SHB saw smaller profits compared with the same period last year.

    VPBank ranked 10th with a profit of VND8.3 trillion, compared to third place last Q3 with earnings of VND19.8 trillion. The bank had difficulties with consumer lending and there were no longer any unusual revenues from the re-signing insurance contracts.

    Techcombank lost its second ranking, standing in the fifth position after its profit decreased by 18% to VND17 trillion.

    SHB’s profit dropped by 8% to VND8.5 trillion.

    Vietcombank maintained its first ranking, followed by MB, BIDV and VietinBank.

    Banks’ business performance deteriorated a mostly successful race to mobilize capital, which started at end of last year.

    SCB’s crisis in October last year, along with the collapse of some U.S. banks, caused increasingly strained liquidity in the banking system.

    Last October, the State Bank put SCB under special control after people withdrew money in droves at many SCB branches and transaction offices.

    Late last year, banks were concerned with defense and liquidity reserves. This led to a charge to mobilize capital, pushing deposit interest rates up to 11-12% a year at times.

    Interest rates quickly cooled down from the second quarter of this year, but the amount of deposits banks mobilized at high interest rates have not yet matured, pushing capital costs up sharply.

    Current account savings accounts (CASA), a source of cheap capital for banks, have continuously decreased since the end of last year due to cash flows trending into the savings channel.

    The falling stock market, and the dormant real estate and bond markets, also caused people to reduce spending and investment.

    In addition, a series of companies withdrew money to serve capital needs and pay financial obligations, including the buying back corporate bonds before maturity.

    This series of factors caused the CASA ratio to decline throughout the banking industry.

    These factors caused capital costs in the banking industry to skyrocket, with some banks even having to double the expense over the same period last year.

    Meanwhile, many banks found it difficult to lend when production and business as a whole slowed down, and the bond and real estate markets froze.

    The banking industry’s credit growth by the end of September had only increased 6.92%, figure as low as Covid period nadirs.

    Credit balance at many banks also grew at the lowest rate in many years. At BVBank, credit growth by the end of September had reached a mere 4.2%.

    This caused credit revenues to not increase at pace with expenses, and income from credit also barely increased or declined.

    Securities companies predicted that profit growth of the banking industry would end the year at 10% this year, a meagre showing compared to last year’s growth rate of 30%.

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  • Google Wallet will soon allow users to digitize their workplace IDs

    Google Wallet will soon allow users to digitize their workplace IDs

    In June, Google announced a series of new features that would slowly make their way to the Google Wallet app to make it a more comprehensive digital wallet solution. Most of these features have already launched, and one in particular was quietly added in a recent Google Play Services update.

    We are referring to the ability to add your workplace ID cards to the app, effectively eliminating the need to carry a physical ID or lanyard. This means that, unless your workplace insists that physical identification needs to be shown at all times, you may finally be able to leave your ID at home and use your phone to access your workplace facilities.

    As spotted by Android Police, the addition of workplace ID card support is part of a flurry of recent additions to Google Wallet. In the past few months, Google has added support for government-issued IDs in new states, easier tap-to-pay systems for commuters, and support for sharing passes. You can also digitize all the unsupported documents and passes, like library cards and gym memberships.

    This new capability is part of the Google Play Services app update to version 23.44 that began to roll out yesterday, as detailed in the app’s changelog. However, it doesn’t seem to have reached all users yet, not even those using the app’s beta version, which is now at version 23.44.14. Once rolled out, the feature will appear alongside the current options for adding a digital ID, such as a state driver’s license.

    In its June announcement, Google never specified a rollout timeline for the workplace ID card support, except for “later this year.” Hopefully, this means that it should start reaching users soon, making it easier for them to set up digital IDs for reliable use.
  • Morgan Stanley Swiss Funds Business Gets New Head

    Morgan Stanley Swiss Funds Business Gets New Head

    US-based bank Morgan Stanley gives a former McKinseyan responsibility for funds distribution in German-speaking countries in Europe.

    Sebastian Roemer is the new distribution head for Morgan Stanley Investment Management in the German, Austrian, and Swiss markets. Based in Frankfurt, he will manage the regional activities of the bank’s fund subsidiary, the bank indicated in a release on Monday.

    The new appointee has more than 15 years of experience as an asset manager, with his last position being that of the head of Central and Eastern Europe for French-based institution Natixis Investment Managers (offices in Frankfurt, Munich, and Zurich). Before that, he was an investment specialist for Pimco and private markets investment company Apax Partners. Roemer started his career in 2005 with the McKinsey consultancy in Zurich. He holds an MBA from Harvard Business School and a Master of Science in Economics (MSc) from the London School of Economics.

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  • UBS Faces Pressure on Costs

    UBS Faces Pressure on Costs

    The dust has settled since Switzerland’s largest bank announced it would completely integrate all of Credit Suisse. The third quarter is likely to slip by far more quietly even though it still faces stiff challenges.

    The usual UBS earnings figures are expected to be in the spotlight on November 7. Revenues, inflows of new money, costs, and net profit will be the metrics by which many measure how the integration with Credit Suisse is going.

    The number of significant extraordinary items booked in the first half has also led many to assume that much has since been cleared out of the way. All in all, it was likely the usual kitchen sinking exercise to set a clean slate before really getting down to work.

    What is almost certain to be a matter of sharper focus are the inflows of net new money in September. The figures are not expected to be that surprising given that UBS previously communicated the trends it was seeing in the first two months of the quarter at the end of August. At the time, it had recorded about $8 billion in inflows in the new, combined Global Wealth Management (GWM) business.

    Iqbal Khan, as the head of the business, has a clear recipe for growth. In meeting employees working in various regions around the world, he reduced everything to three words: NNM, or Net New Money.

    According to Jefferies analyst Flora Bocahut, the bank needs to report a positive attributable net profit result together with declining risk-weighted asset (RWA) levels in order to achieve its targeted return on common equity Tier 1 levels. In the second quarter, RWAs fell by about $9 billion.

    Michael Klien is also focusing on attributable net profit, saying it will be an important figure. UBS is expected to break even in the quarter while seeing a return to profitability in the second half. According to him, the analyst consensus is currently too low.

    UBS can curry favor if it manages to cut risk-weighted assets quickly. The focus here will be on non-core and legacy businesses, mainly in Credit Suisse, headed by Beatriz Martin Jimenez. By 2026, the level of capital consumption in that business is expected to fall significantly.

    The investment bank is not expected to have a stellar quarter, particularly given the performance seen at the major US institutions. The Swiss business, however, could turn out to be a bright spot.

    Many will pay intense attention to costs. The numbers in the second half didn’t much impress investors. It is expected that job cuts and integration costs, particularly at Credit Suisse’s investment bank, will have an impact.

    That should also be reflected in headcount numbers globally. At the end of August, they were down by about 8,000, a number that includes both voluntary and involuntary departures.

    UBS is in the middle of an arduous integration process and job cuts, costs and further risk mitigation measures are likely to remain overarching themes in the next few quarters.

    The integration of Credit Suisse resulted in its business performance disclosures being consolidated and simplified, making it extremely difficult to make comparisons with previous quarters and years. However, starting in the third quarter they are expected to be included in the UBS divisional numbers (GWM, Personal & Corporate Banking (the Swiss business), Asset Management, and Investment Bank. Credit Suisse’s so-called bad bank will be reported in the abovementioned non-core and legacy business.

    It is questionable right now whether the quarterly numbers will help lift the bank’s share price. They have risen as high as  23.80 francs recently and currently, trade in the region of 21.70 francs.

  • Gold prices decline slightly

    Gold prices decline slightly

    SJC gold price dropped 0.07% to VND69.75 million (US$2,864.12) per tael on Tuesday morning.

    Gold ring price downed 0.08% to VND57.3 million per tael. A tael equals 37.5 grams or 1.2 ounces.

    Globally, gold prices held near their highest levels in more than a week on Wednesday as comments from U.S. Federal Reserve officials suggested that a recent surge in Treasury yields might reduce the need for more rate hikes, sending the dollar lower.

    Spot gold was up 0.1% at $1,860.97 per ounce by 0136 GMT, having hit its highest level since Sept. 29 on Tuesday. U.S. gold futures held their ground at $1,874.50.

    Bloomberg said Wednesday that a slump in gold prices to a seven-month low in India may stimulate demand in the current festive season, when people traditionally buy more coins and ornaments.

    Strong purchases during the October-December festival period, considered an auspicious time to own and wear gold, may underpin the global market.

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  • Eximbank names new acting CEO

    Eximbank names new acting CEO

    Lender Eximbank has appointed Nguyen Hoang Hai as acting CEO for a year to replace Tran Tan Loc who resigned Monday.

    Hai, 45, who has worked for ABBank and EVN Finance, had become deputy CEO of Eximbank in early August.

    Loc remains a director.

    Also on Tuesday the bank dismissed another deputy CEO, Pham Quang Dung.

    Last month it had appointed Nguyen Canh Anh as a director. He too has worked for EVN Finance in the past.

    It has been a game of musical chairs for the Eximbank leadership in recent years.

    Do Ha Phuong became its chairwoman in June in place of Luong Thi Cam Tu, who had only taken over in February 2022.

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  • Fashion giant Decjuba plots Asia expansion with first store in Singapore

    Fashion giant Decjuba plots Asia expansion with first store in Singapore

    Fashion retailer Decjuba is working on establishing a physical store in Singapore later next year and expanding into selling menswear and beauty products.

    “We continue to look around the world, and we don’t see another brand doing what we are doing as well as we do it,” said Tania Austin, owner and CEO at Decjuba.

    The upcoming location in Singapore will be Decjuva’s first brick-and-mortar store in Asia. The company decided to set it up after it witnessed growth in its international e-commerce operations, which now share 20 percent of the group’s total sales.

    “I thought for a long time we didn’t need to have physical stores abroad. But every time I go into a good shopping centre I’m like, ‘It is that experience piece that we are seeing consumers come back to.’ They enjoy it. There’s definitely a demand for it,” said Austin.

    Austin said that the opening of the store in Singapore in late 2024 is now Decjuva’s “No 1 focus” for the company’s expansion plans in Asia.

    According to the report, the company will also start selling products under the Decjuba Kids brand in eight new D-luxe concept stores this month.

    In addition, Decjuba has partnered with Melbourne-based menswear brand Mr Simple, to offer its first men’s undergarments, which will be available online and in 15 Decjuba’s larger stores.

    In addition, the company will launch a pop-up store at Melbourne’s Southland shopping centre in October this year. The company will also launch Decjuba Beauty, which will offer 34 beauty products for lips, nails, cheeks and eyes, in the same month.

    Decjuva took 12 months to develop the beauty brand, with the company working with an Australian for some of the products.

    “We are not a beauty retailer or a skin retailer. So this is really about the Grab and Go handbag essentials that you are popping in as an extension of the Decjuba brand,” said Austin.

    Decjuba is in the final stage of construction of its new head office in Cremorne, a suburb in Melbourne, scheduled for opening early next year.

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  • UBS Helps European Banks Leave US Peers in the Dust

    UBS Helps European Banks Leave US Peers in the Dust

    European banks are more profitable than American ones for the first time in ten years. A study points to UBS being a key reason for that.

    The elite of Wall Street usually have their nose well ahead of the game in the perpetual battle between European and US finance industry giants. Or at least they did until the first half of this year. But now the winds have shifted, with a new EY analysis (German only) showing that profits for the main European banks have grown much faster than their American-based counterparts.

    Much of this was, of course, driven by UBS’s forced takeover of Credit Suisse, which returned the bank to the top of the heap on the continent. But beyond that, most of the banks on this side of the pond benefited handsomely from the European Central Bank’s move to sharply increase rates, which has helped fatten up interest rate margins.

    The cumulated net profit of the ten largest banks (going by balance sheet size) rose by 80 percent to 75 billion euros, according to EY. By contrast, US-based institutions saw profits rise by only 7 percent to about 82 billion euros. In Europe, UBS reported the most first-half profit at 27.4 billion euros ($29 billion in the second quarter alone, mainly related to negative goodwill from Credit Suisse) while in the US, JP Morgan led the pack with 24.8 billion euros in the first six months of the year (reported as $27.1 billion).

    There was also a significant change in general levels of profitability, with the rates of return on equity for European banks being at 15.5 percent at the end of June, corresponding to a 5.9 percentage point increase from the same period a year earlier. It was also by far the highest level of the last ten years. In fact, it was the first time in a decade that US banks posted lower RoE of 12.6 percent than their top ten European counterparts.

    Much of this was also due to UBS, which by itself would have recorded a more modest profit of 2 billion francs (same in euros) without the impact of having to rescue Switzerland’s second-largest bank.

    These positive trends are also having an impact on market capitalization levels. Since the beginning of the year, the value of European banks was up 14 percent at the end of August to sit at a heady 522.5 billion euros. In contrast, the cumulative market of the largest American banks fell by 6 percent to 1.15 trillion euros.

    On the SIX Swiss Exchange (SIX) the same was true. Since the start of July, UBS’s shares have only known one direction – up. Over the past three months, the shares have risen by almost 30 percent.

  • Citi Launches Institutional Token Services

    Citi Launches Institutional Token Services

    Citi aims to offer token services in the form of digital coins, to improve its cash management and trade finance operations.

    According to an emailed statement, Citi Treasury and Trade Solutions (TTS) has launched the creation and pilot of Citi Token Services. The US lender will offer tokenized deposits – effectively transferable digital coins that act as claims against the bank – to support institutional clients’ cash management and trade finance needs.

    The development of Citi Token Services is part of our journey to deliver real-time, always-on, next-generation transaction banking services to our institutional clients, said global head of services Shahmir Khaliq.

    Previously, Citi partnered with shipping giant Maersk and an unnamed canal authority to digitize a solution that serves the same purpose as bank guarantees and letters of credit in the trade finance ecosystem.

    We are pleased to have collaborated with Citi in the successful test pilots for the guarantee solution using digitized tokens and smart contracts. The innovative solution has promising applications for trade finance, said Marie-Laure Martin, regional treasury manager for the Americas at Maersk.

  • UBS Job Cuts Hit US Investment Bankers

    UBS Job Cuts Hit US Investment Bankers

    The reorganization of UBS investment banking is proceeding. It’s eliminated some duplicate US staffing, but the big cutback is looming.

    According to a Bloomberg report, UBS has eliminated about a dozen investment banking jobs in the US in connection with the integration of Credit Suisse. The bank declined to comment to the news outlet on the matter.

    According to the sources who asked not to be named, many of the affected positions are in overlapping areas. No names were given.

    If the report is true, the reorganization of traditional investment banking with corporate advisory and capital market transactions is proceeding. UBS is trying to combine the best of both banking worlds, but when it comes to Credit Suisse trading, UBS will show little mercy and will wind up the unit.

    At the same time, numerous UBS investment bankers in New York are about to move, with the entire team decamping to the former Credit Suisse offices at 11 Madison Avenue.