Tag: Finance

  • DBS Kicks Off Business at Chinese Securities JV

    DBS Kicks Off Business at Chinese Securities JV

    DBS’ securities joint venture in China will officially commence business operations after receiving its license from the mainland regulator.

    Securities joint venture DBS Securities (China) will kick off operations, according to a statement, effective immediately after receiving its securities business license from the China Securities and Regulatory Commission.

    The joint venture will operate brokerage, securities investment consulting, securities underwriting and sponsorships, as well as proprietary trading.

    DBS joins other global banks to capitalize on China’s market-opening especially with regards to the securities business where the likes of J.P. Morgan and Goldman Sachs are seeking to obtain full ownership of their joint ventures.

    Today, DBS Securities is honored to become the first Sino-Singapore securities joint venture, said DBS group chief executive Piyush Gupta. We hope to continue to facilitate China’s economic growth and look forward to contributing to its ‘Dual Circulation’ strategy.

    DBS Securities currently has a registered capital of 1.5 billion yuan ($230 million) and is majority-owned by DBS (51 percent). Other shareholders include Donghao Lansheng Investment Management (24.67 percent), Shanghai Huangpu Investment Holding (13.33 percent), Shanghai Huiyang Asset Management (6.5 percent) and Shanghai Huangpu Guidance Fund Equity Investment (4.5 percent).

  • Standard Chartered Private Bank Loses Managing Director

    Standard Chartered Private Bank Loses Managing Director

    Standard Chartered has lost a managing director and senior private banker in Hong Kong.

    Phoebe Chow has left Standard Chartered Private Bank, sources said after more than four years with the British lender.

    When contacted, a spokesperson for the bank declined to comment on the exit.

    Chow joined Standard Chartered Private Bank in 2017 to oversee various client markets including the Philippines and Taiwan. Previously, she was a Singapore-based team leader at Credit Suisse where she worked for more than eight years.

    Standard Chartered’s private banking arm has effectively fallen under a new structure this year after it merged with retail banking and wealth management into a single consumer, private and business banking (CPBB) unit.

    Standard Chartered Private Bank was under the watch of CPBB chief executive Judy Hsu after its former head Dider von Daeniken left last year until the recent replacement hire of ex-UBS banker Raymond Ang two months ago.

  • Vietnam stock market posts world’s highest gains

    Vietnam stock market posts world’s highest gains

    Vietnam’s benchmark VN-Index has surged 34.51 percent in the first half of this year, marking the highest increase in the world.

    Abu Dhabi was second with its stock market rising 33.06 percent, followed by Austria with 32.65 percent, according to China-based stock database StockQ.

    With an increase in five consecutive sessions in the past week, VN-Index reached 1,374.05 points last Friday, up 4.06 percent from a week earlier. Vietnam ranked third among the most active markets in the past week after Argentina and Hungary, according to the Chinese stock database.

    Abundant cash flow, constantly increasing number of new investors, and immediate measures to reduce congestion has propelled the stock market.

    The number of new investors entering the stock market in May scaled a new monthly record, with over 113,000 new trading accounts opened.

    The VN-Index’s continuous growth has broken most forecasts made by domestic securities companies.

    Citing geopolitical risks and complicated developments of the Covid-19 pandemic, the Viet Dragon Securities Company (VDSC) had forecast that the VN-Index could reach a high of 1,272 points, equivalent to a year-on-year increase of about 15 percent.

    Other securities firms like Ho Chi Minh Securities Corporation (HSC), Vietcombank Securities (VCBS) and Viet Capital Securities (VCSC) made similar forecasts of the index reaching 1,250-1,280 points.

    The index has surged rapidly, pushing the price-earnings (P/E) ratio to 18.8. While this figure is still much lower than other Southeast Asian countries, including the Philippines, Indonesia and Thailand, it shows Vietnam’s stock market is coming of age.

    In a newly released strategy report, VNDirect Securities said: “The market is no longer undervalued but also not too high, meaning that businesses need more time to improve their results and pull the valuation ground to a more attractive level.”

  • Bank Jago Partners Mambu and Google Cloud for Digital Bank

    Bank Jago Partners Mambu and Google Cloud for Digital Bank

    The strategic partnership allows the bank to operate in the cloud in Indonesia, where banking data must remain in-country, according to an announcement this week.

    The digital bank will use Mambu’s SaaS banking platform and Google Cloud to offer new services to meet the needs and demands of Indonesian customers.

    Bank Jago launched its smartphone app in April 2021 in Indonesia, home to the fourth-largest unbanked population globally.

    Its service offerings include everyday transactions and payments, and the bank has plans to branch out into SME lending.

    Bank Jago believes that technology is not only providing new experiences to its customers, but it also enables the bank to operate efficiently, and to constantly create innovative breakthroughs, Kharim Siregar, Bank Jago president director, said in the announcement

    Formerly known as Bank Arto, Bank Jago is backed by the likes of super app Gojek, which recently increased its stake in the lender, as well as Singapore state investor GIC.

  • J.P. Morgan Seeks Full Ownership of Chinese JV

    J.P. Morgan Seeks Full Ownership of Chinese JV

    J.P. Morgan is seeking regulatory approval to obtain full ownership of its mainland Chinese securities joint venture.

    J.P. Morgan has applied to regulators for approval of its full ownership of the securities joint venture, according to a report citing China chief executive Mark Leung.

    The bank currently has a 71 percent stake in the unit after last boosting ownership in November 2020.

    J.P. Morgan joins Goldman Sachs in the race to become the first to obtain full ownership of their securities unit in mainland China.

  • UBS’ Insourcing Revolution Shakes Cognizant

    UBS’ Insourcing Revolution Shakes Cognizant

    Outsourcing giant Cognizant has had to let dozens of staff in Switzerland go as UBS continues its policy under CEO Ralph Hamers of bringing entire IT departments back in-house. Both the major Swiss banks, UBS and Credit Suisse are long-standing Cognizant customers. UBS used to pay Cognizant up to $330 million a year for IT services and business process outsourcing. Credit Suisse spends around $220 million a year with Cognizant Services, $100 million of it in Switzerland.

    The major IT consultancy and outsourcing companies make immense amounts of money from the financial sector, and U.S.-based Cognizant, one of the sector’s top companies globally, has sales of $5.6 billion to the finance sector, a good third of its total turnover.

    However, the relationship between UBS and Cognizant has been turning frosty in recent years, and in Switzerland there has been a falling out. UBS last year elected not to renew a service contract, with effect from the end of April. This meant that at a stroke Cognizant lost half of its business with UBS – around $60 million worth.

    As a result, Cognizant faced making 70 to 80 consultants working for UBS redundant. The company had had up to 200 staff under contract to UBS. The bank took on around a third of them and another third were taken on by other IT services companies such as Epam and Infosys.

    Neither Cognizant nor UBS would comment on the termination of the contract.

    Two separate said there were two reasons for UBS dropping Cognizant. In May 2020 the U.S. company was the victim of a ransomware attack that wrecked its efforts to provide IT services from home offices.

    UBS then canceled its global contract for several years of IT services early, with effect from the end of April this year, on security concerns. The second reason is UBS’s tendency over the last few years to take IT services back in-house.

    In 2018, the bank unilaterally canceled its long-standing partnership with Cognizant in India. UBS sold its «India Service Center» with around 200 staff to Cognizant in 2009 and at the same time signed a contract for several years of services, which was first of all not extended and then canceled entirely.

    Competition between outsourcing vendors is extremely fierce and the pressure on prices is enormous. UBS constantly beat Cognizant and other IT service providers down on price.

    Mike Dargan, who became UBS’s chief information officer in 2016, reversed the bank’s strategy of outsourcing. The massive acceleration in innovation and digitalization in the financial sector forced Dargan to the conclusion that IT development and services should be dealt with by in-house departments in order to keep up.

    Chris Gelvin, a UBS veteran who has been head of group operations since 2018 and was in January this year also appointed chief transformation officer, is responsible for implementing this strategy.

    In the meantime, Dargan has risen within the ranks of top management to become COO as well as chief digital and information officer. The step-by-step ending of the vendor contracts and the in-housing strategy are completely in line with Hamers’ thinking.

  • DBS Expands Digital Exchange Offering

    DBS Expands Digital Exchange Offering

    DBS expands the offering on its digital exchange with its first-ever bond issuance via security token offering.

    DBS has issued a S$15 million ($11.35 million) bond through a security token offering (STO) on its digital exchange, according to a statement.

    The bond has a six-month tenor with a coupon rate of 0.60 percent per annum.

    The issuance was executed via private placement and DBS was the sole bookrunner for the transaction.

    According to the bank, asset tokenization enabled the digital bond can be traded at a significantly smaller minimum of S$10,000 per board lot, further driving liquidity and lowering barriers for investor access.

    While most bond tokenization exercises announced in Asia to date tend to be repackaged forms of a conventional bond issue, the current transaction directly combines existing legal and tax infrastructure requirements with a direct issuance on the digital exchange in smaller lot sizes, said DBS’ global head of fixed income Clifford Lee.

    This bond token structure was only made possible because of the progressive development of Singapore’s legal and tax infrastructure, which can facilitate more STO issuances to broaden and deepen our capital markets.

    According to DBS’ group head of capital markets Eng-Kwok Seat Moey, the bank expects more issuers to leverage asset tokenization for fundraising.

    Our maiden STO listing on the DBS Digital Exchange is a significant milestone, as it highlights the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors, he said.

    We expect asset tokenization to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fundraising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia.

    DBS’ digital exchange – DDEx – launched in December 2020 with an initial offering that covered cryptocurrency trading.

    Daily trading volumes have increased 10-fold compared to the initial week of the launch, the bank said, with over 120 participants on the exchange and S$80 million of digital assets in custody.

    Earlier this month, the bank launched a crypto trust offering that combined wealth planning services with emerging digital currencies.

  • Elon Musk’s tweets send Vietnamese crypto investors into spiral of anxiety

    Elon Musk’s tweets send Vietnamese crypto investors into spiral of anxiety

    Elon Musk’s recent tweets have partly contributed to sending Bitcoin and other cryptocurrencies tumbling, and Vietnamese investors into losses and diminishing their hope in the future of digital currencies.

    Thien Tuan from the northern town of Mong Cai has seen his VND30 million ($1,300) investment in several cryptocurrencies depreciate by nearly 40 percent in the last few days.

    The 28-year-old had entered the crypto market in early April with no prior investment experience. Half of his savings is now in XRP, which has fallen 36 percent since mid-April, and Dogecoin, which has lost half its value in two weeks.

    He says: “Some of my friends have advised me to exit the market and look for other reliable assets like gold. I’m worried my losses will rise to 80-90 percent in the coming weeks.”

    On several Facebook groups of which he is a member, hundreds of people are expressing similar concerns about Bitcoin, Dogecoin and other cryptocurrencies after their prices plunged due to the remarks made by Musk and other reasons.

    In March Mush had announced that customers could buy Tesla cars using bitcoin, but on May 13 he said in a tweet the company had suspended the plan. Bitcoin lost 12 percent almost immediately.

    In another Twitter comment on May 17 Musk seemed to imply Tesla could sell its Bitcoin holdings, which sent the cryptocurrency down another 8 percent.

    The world’s most popular coin has lost 47 percent from its peak in mid-April, while other cryptocurrencies too are down by double digits.

    Other factors that contributed to the falls are China further cracking down on digital currencies and Binance Holdings, the largest cryptocurrency exchange, being investigated by U.S. authorities for money laundering and tax offenses.

    Tran Cuong, 22, of Hanoi invested $700 in Bitcoin and Dogecoin, and says “I have lost nearly $500 due to Elon Musk’s tweets.”

    The sharp falls have raised concerns among coin miners in Vietnam.

    Viet Hung of the southern province of Dong Nai only started mining a month ago and was expecting to recoup his investment by the end of the year.

    “Now that the market has plunged, I don’t know whether to continue mining or sell the equipment and cut my losses,” he says.

    Minh Huy, a seller of mining rigs in HCMC, says many prospective buyers have suspended purchase plans to watch how the market moves before making a final decision.

    Some of these deals are potentially worth billions of dong (VND1 billion = $43,500).

    “The plunging market not only hurts investors but also hardware suppliers,” Huy says.

    Hoang Bao of Hanoi, who has years of experience in coin mining, says he has yet to see people sell off equipment, but feared that if prices keep falling the market could soon turn “chaotic.”

    “The worst-case scenario is that rigs will be left to gather dust like last time, but this time it will be on a much bigger scale,” he says, referring to the 2018 Bitcoin selloff.

    Bitcoin and other cryptocurrencies are not recognized as a legitimate means of payment in Vietnam. The State Bank of Vietnam has warned that owning, trading and using cryptocurrencies are risky and not protected by law.

  • Hong Kong to Bar Retail Access to Cryptocurrencies

    Hong Kong to Bar Retail Access to Cryptocurrencies

    The Hong Kong government is seeking to restrict cryptocurrency access to wealthier investors amid an ongoing global crackdown by regulators.

    Cryptocurrency exchanges operating in Hong Kong will have to licensed by the Securities and Futures Commission (SFC) and limit access to professional investors – defined as individuals with a portfolio of HK$8 million ($1.03 million) – according to government proposals published on Friday.

    Hong Kong’s Financial Servies and Treasury Bureau (FSTB) said it had been consulting the market on the changes since last year and intends to advance its proposals into law in the upcoming 2021-22 session of the city’s legislative assembly.

    The FSTB continues to advance the regulatory changes despite concerns by local players that the restriction against retail access could drive exchange abroad and investors to unregulated channels.

    According to the FSTB, confining the services of a [virtual asset] exchange to professional investors is appropriate at least for the initial stage of the licensing regime.

    Hong Kong authorities’ move to tighten on crypto coincides with similar regulatory efforts elsewhere including China’s crackdown on mining and trading as well as U.S. tax proposals to report cryptocurrency transferal of over $10,000.

  • UBS Fined for Rigging European Bond Trading

    UBS Fined for Rigging European Bond Trading

    The European Commission censured seven investment banks for maintaining a cartel on European government bond-trading. The Swiss bank was hit with the largest fine, despite cooperating.

    Brussels extracted a total of 371 million euros ($453 million) on UBS, UniCredit, and Nomura for a seven-bank ring which colluded between 2007 and 2011 on prices and volumes of European government bonds, the commission said in a statement on Thursday.

    The other banks censured in the cartel were not fined: Natwest had blown the whistle on it, while Bank of America and Natixis escaped because their wrong-doing fell outside of a time period for which fines could be levied. Lastly, WestLB, now Portigon, generated zero revenue from the scheme in the last business year, capping its potential fine at nil.

    UBS, which racked up the biggest fine (174.2 million euros), told domestic agency AWP that it is considering an appeal. The fine will take roughly $100 million out of UBS’ second-quarter results, it said.

    The Swiss bank’s fine would have been 45 percent higher had it not cooperated with the commission, overseen by Brussels’ anti-trust chief Margrethe Vestager. The commission fined Nomura 130 million euros and Italy’s Unicredit, now run by UBS’ former top investment banker Andrea Orcel, 69 million euros.

  • HSBC to Fund New Climate Solutions

    HSBC to Fund New Climate Solutions

    The bank is collaborating with the World Resources Institute (WRI) and WWF to unlock access to finance to help new climate-based projects create real-world impact. HSBC said it would put in $100 million of funding – half of which will be deployed in Asia – over the next five years to build towards a net-zero economy, according to a statement on Thursday.

    Keeping global temperature rises within safe limits requires new thinking and new technology. Asia is particularly vulnerable to climate change, but it is also where solutions are emerging fast, Peter Wong, HSBC deputy chairman and CEO said in the statement.

    The partnership covers 14 markets in Asia Pacific, including Australia, India, Indonesia, Hong Kong, Japan, mainland China, South Korea and Vietnam, across three funding streams: energy transition, nature-based solutions, and business innovation.

    The bank cited several projects as examples: improving industry access to renewables and green technologies in China, working with partners in Thailand to restore parts of Chiangmai’s degraded forests and advance sustainable agriculture, and supporting Hong Kong start-ups focused on climate innovations.

    Ignoring the human impact on climate will delay reducing inequality and achieving sustainable long-term growth in the region, the bank said.

    The Climate Solutions Partnership is part of the bank’s previously announced ambitious plans to combat climate change, under which it is setting aside $1 trillion in green financing to support customers in the transition to net-zero.

    Climate activists have criticized the bank for its support for the fossil fuel industry, alleging that it has invested some $80 billion in fossil fuels since the Paris Agreement in 2015.

    In March, the bank committed to phasing out support for the coal industry by 2030 in the developed world and by 2040 in the developing world, following pressure from activist investors.

  • Deutsche Bank Sets Up ESG Center in Singapore

    Deutsche Bank Sets Up ESG Center in Singapore

    Deutsche Bank has set up a Singapore-based center focused on developing environmental, social and governance-related solutions.

    Deutsche Bank’s center will focus on innovation in ESG and fintech to develop new products to address market gaps, according to a statement.

    In addition to internal activities, the center will also share global best practices with regulators and regional bodies in Asia, such as Asean and Asia Pacific Economic Cooperation.

    The center will house a sizeable team that will work across all business divisions, developing solutions across impact monitoring, data management and payments to unbanked communities.

    The transition of Asia towards sustainable practices requires ESG transaction models, products, solutions and regulatory measures which meet international standards while supporting on-the-ground realities in Asia, said Deutsche Bank’s APAC head of ESG Kamran Khan.

  • UBS Cuts 700 Jobs

    UBS Cuts 700 Jobs

    Swiss bankers are the first to go in the Swiss bank’s current round of cuts. UBS has started cutting jobs as part of its current round of cost-savings measures, with around 700 employees in Switzerland affected.

    Most of the cuts will be in the corporate center although 200 jobs will go in wealth management and UBS Switzerland. These are in addition to the roughly 125 jobs UBS was going to get rid of before the Covid-19 pandemic put those plans on ice

    UBS CEO Ralph Hamers announced a $1 billion cost-savings target during first-quarter results last month. UBS’s cuts are aimed at the jobs expected to become redundant as a result of its ongoing digitalization processes. finews.com reported on the plans in April. They are expected to be wide-ranging and take out 3,000 jobs in total.

    UBS has not confirmed the figure but it is realistic in view of the savings targets and the bank’s cost structures. It also announced that restructuring costs would total $300 million in the second quarter, most of which were in the scope of the cuts originally announced last year.

    According to Bloomberg, around a dozen managing directors as well as more junior bankers in the advisory and trading business were recently let go. In wealth management, about five managing directors and several executive directors were impacted. In the investment bank, most of those cuts were those responsible for wealth management clients.

    CEO Hamers said his current efforts are aimed at implementing and executing the transformation and digitalization strategy, which is expected to take about three years.

  • UBS Quietly Advances Token Efforts With Clients

    UBS Quietly Advances Token Efforts With Clients

    UBS has been quietly running a tokenization trial with weighty institutional investors. The Swiss-based bank has been offering more than 100 institutional clients access to a pilot program to tokenize real assets. The project is operating on the Ethereum platform, the person said.

    This represents the next step in a push into putting assets on the blockchain and selling slices represented in coins. The project, being overseen by UBS investment banker Chetan Tolia, is looking at tokenizing traditional assets including debt, structured products, and physical gold.

    The Swiss wealth manager last week dipped its toes into cryptocurrencies, in a major concession to client demand. The tokenization program has quietly been running, separately out of UBS’ investment bank, for at least 12 months, the person said. UBS declined to comment.

    UBS has long held that it is interested in distributed ledger more than it is in cryptocurrencies themselves – which represent a threat to traditional banking. The Swiss bank transacts on we.trade, a blockchain-based trade finance platform, co-launched a so-called utility settlement coin with other banks, and is part of banking’s R3 blockchain consortium.

    It isn’t clear how long UBS intends to run the tokenization pilot or release it more widely, or which products it is tokenizing.

  • DBS’ Ajay Mathur A Phygital Strategy Is Our Key Differentiator

    DBS’ Ajay Mathur A Phygital Strategy Is Our Key Differentiator

    The lack of a physical presence, short track records, limited offerings, and other factors will act as hurdles for digital-only banks to overcome, according to DBS’ Hong Kong head of consumer banking group and wealth management Ajay Mathur.

    Banks and other financial service providers used to compete along with price, product, and convenience but increasingly so, the competition has moved away from these elements towards digital speed, simplicity, and contextuality,» Mathur said. Although many banks are trimming property, including DBS which has offloaded office space in both Hong Kong and Singapore, Mathur underlines that retaining a client-facing real estate remains critical alongside digital presence – a phygital presence.

    This is not merely for optics or unwilling adopters of technology but to capture opportunities from both simple financial needs that can be executed online, such as a simple single stock trade, as well as more complex ones offline, such as succession or legacy planning.

    If we are able to smoothly deliver business online and offline, we can create a customer experience that can truly differentiate us, Mathur says. A ‘phygital’ strategy is our key differentiator.

    Even in the field of technology, Mathur said there is more to be desired from neobanks.

    Although some virtual banks are challenging traditional lenders in portfolio management capabilities – Stashaway, for example, claims to have superior discretionary mandate performance at much lower fees – Mathur underlined that many of such offerings are static in nature which, alone, is insufficient to meet client needs, especially in Asia’s market of hands-on investors.

    It’s very easy to create a so-called robo advisor. Many fintech already have offerings where they match clients with investment strategies based on a survey that assesses risk profile,» he explains. What is harder to create is robo-analysts. Robo-analysts can map your actual holdings against your profile and risk appetite to provide advice for clients to make actual transactions.

    And should virtual banks achieve a sufficient threshold in their capabilities, years of track record will still be required before broad confidence from the market can be achieved.

    We have spent many years and resources to develop brand and trust,» Mathur said. «Money is a very complex and emotional issue. It’s not something you can easily hand over to a company with no vintage.

    Nonetheless, Mathur acknowledges that it is still early days and, in fact, attributes some of the industry’s digital enhancements to the emergence of virtual banks.

    We welcome competition from fintechs, he said, adding that newly licensed digital lenders in Hong Kong have achieved a «credible start» in acquiring new clients and assets.

    They’ve kept peer banks on their toes and brought about nice improvements in customer experience.

    Within DBS, tech investments are now strategically focused on three areas: data, artificial intelligence and ecosystems.

    In addition to transforming its capabilities – seeking data to better understand clients and applying this via artificial intelligence to enhance user experience, for example – the bank is also transforming its role.

    Our traditional role is to act as a pipeline connecting financial services between the bank and a customer,» Mathur said. «But as we increasingly view ourselves less as a bank and more as a tech firm, we’ve been focused more on developing ecosystems. Rather than acting as a pipeline, we want to be a platform not only to deal with our customers but to deal with customers of our partners. This can effectively increase our ring of influence.