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Tag: financing

  • OCBC Pioneers New Securities Financing Division to Optimize Lending Solutions

    OCBC Pioneers New Securities Financing Division to Optimize Lending Solutions

    Singapore’s OCBC Bank has established a new division that is committed to providing loans against idle securities in customer accounts.

    Enabling Efficient Use of Idle Securities

    OCBC Bank has introduced a dedicated securities financing unit that will operate within the global markets division. This unit’s main function will be to activate lendable securities like equities and fixed income, which are held by customers of OCBC Bank and its affiliate businesses OCBC Securities, Bank of Singapore, and Great Eastern.

    The financing unit will be under the leadership of Jansen Chua, the newly appointed head of securities finance. Chua, who officially joined the bank on January 2, will directly report to Kenneth Lai, the head of global markets.

    Chua brings to the table 25 years of international experience spanning across the United States, Europe, Middle East, Africa, and the Asia Pacific. His most recent role was at State Street Bank & Trust Company, where he was the senior managing director and head of financing solutions for the Asia Pacific region. He has led teams in trading, sales, customer management, and product development.

    The Increasing Demand for Securities Financing

    Globally, there has been a noticeable increase in the demand for securities financing. More and more buy-side firms are looking for ways to optimize liquidity, fulfill collateral requirements, and put in place hedging strategies in fluctuating markets.

    In 2025, global securities lending revenues hit an all-time high of $15.3 billion, according to EquiLend Data & Analytics.

    Accessing liquidity and effectively deploying capital has become crucial, especially given the current high market volatility. As a result, securities financing has become increasingly important, and there has been a correspondingly significant rise in demand from institutional customers, according to Lai.

    With Chua’s leadership, the bank is well-positioned to assist its customers as they implement trading and hedging strategies, meet settlement obligations, and optimize capital usage.

    Questions & Answers

    What is the purpose of the new securities financing unit?

    The new unit has been established to mobilize lendable securities such as equities and fixed income held by customers, allowing for lending against these idle securities.

    Who will lead the new securities financing unit?

    The unit will be under the leadership of Jansen Chua, the head of securities finance at OCBC.

    What factors have contributed to the increased demand for securities financing?

    The growing demand is largely due to buy-side firms seeking to optimize liquidity, meet collateral obligations, and implement effective hedging strategies amidst volatile market conditions.

  • Private banks lacking scale exit Singapore

    Private banks lacking scale exit Singapore

    Just like real estate is about location, location and location, private banking is about scale, scale and scale – it is what’s needed to cope with the high cost of the business, say industry players.

    Monday’s surprise move by DBS Bank to snap up most of ANZ’s wealth and retail business in Asia for a bargain-basement price of S$110 million, or 0.5 per cent of the S$23 billion of assets under management, once again hammered home the point that scale is needed to run a private bank.

    Over the past two years, eight foreign private banks (ANZ included) have exited or will soon exit Singapore. Of the eight, two were closed by the Monetary Authority of Singapore for anti-money laundering violations. ABN Amro is reportedly the eighth departure, with the Dutch lender soon to sell its Asian private bank.

    Both DBS and ANZ, Australia’s fourth largest bank, mentioned scale as the reason for the sale. It wasn’t that the business didn’t turn a profit. It did; for FY16, it turned in a cash profit of A$50 million.

    ANZ is not a small player in Asia, and this sale does not signal its retreat from the region, it said. In fact, ANZ regards Asia as core to its strategy of banking large corporate and institutional clients, driven by trade and capital flows, particularly with Australia and New Zealand.

    ANZ Institutional Asia employs 1,490 people across 15 markets in the region.

    But, as ANZ chief executive Shayne Elliott said of the sale to DBS: “In retail and wealth, although we have grown a profitable business in Asia, without greater scale, ANZ’s competitive position is not as compelling.”

    Tan Su Shan, DBS’s group head of consumer banking and wealth management, said Asia continues to clock decent growth rates, so the organic growth outlook for the wealth-management business remains intrinsically intact, despite cyclical volatility.

    She said: “For banks looking to create a sustainable wealth-management business here, there are a few things to consider. Firstly, it is the bank’s ability to build scale, be sustainable and invest for the future.

    “Secondly, banks must be able to serve the local and global needs of Asian clients.”

    DBS has been aggressively building up its private bank business, timing it nicely with Asia’s explosive wealth growth. A joint survey by PwC and UBS last month said that, in Asia last year, a new billionaire was minted every three days.

    DBS chief executive Piyush Gupta said that, with Asia growing at 6 per cent, Europe at 1 and the US, 2, “you’d all give a left arm to be in Asia under the current economic conditions”.

    As Asia is tipped to be the richest region in the near future, private banks in the region need to adapt their business models to meet the growing demand.

    Bahren Shaari, Bank of Singapore’s chief executive, said: “For instance, with the rising cost of doing business, banks need to achieve scale, so further consolidation is inevitable. In the case of Bank of Singapore, we have enough scale to aspire to be among the top three private banks in our core markets.”

    But while Asia has the right conditions to attract private banks, it has to be borne in mind that the bulk of the rich are self-made or entrepreneurial; the joint PwC-UBS survey said about 85 per cent of Asian billionaires are first-generation.

    This means banks need to offer investment-banking services and access to debt and equity markets for clients looking to expand their businesses. They should not just sell wealth-management products or throw rare-whisky parties, which have become fashionable in some quarters.

    A private banker who turned down an offer from a major distiller to host a rare-whisky party said: “My clients are too busy making money to come for the whisky.”

    Credit Suisse, the third-largest private bank in Asia, decided in a strategic review last year to combine investment banking with private banking.

    Francesco de Ferrari, the bank’s head of private banking for the Asia-Pacific, said earlier this year: “The business model that is best suited to Asian clients’ needs is the integrated bank with private banking as a core business and its DNA, but also strong investment banking and asset-management capabilities.”

    So if some foreign banks have decided to exit Singapore, it doesn’t point to foreign banks beating a retreat from Asia.

    DBS’ Ms Tan noted that the largest private banks in Asia are, in fact, Swiss or American: “While some foreign players have left the scene, there are several who are still fairly dominant here.

    “These are primarily the large Swiss and US and banks who have managed to build scale in their private-banking businesses, either through long-term organic growth or through combining their wealth management business with a retail, corporate/investment banking or asset management business.”

    UBS, Citi, Credit Suisse, HSBC and DBS are Asia’s top five private banks. Julius Baer, Morgan Stanley, JP Morgan, BNP Paribas and Deutsche Bank round up the top 10.

    Ms Tan said: “That said, there remains more scope and opportunities for dominant local or regional players like DBS to gain market share as clients here look for customised solutions with a safe and steady name who remains committed to the region and the business.”

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  • Ant Financial announces global blueprint for digital financial inclusion

    Ant Financial announces global blueprint for digital financial inclusion

    Ant Financial Services Group (“Ant Financial”, or the “Company”), one of the world’s leading digital financial services providers, today announced its global blueprint for promoting digital financial inclusion, and a strategic agreement with Ascend Money, the leading fintech company in Thailand. Under the agreement Ant Financial will invest in Ascend Money, which aims to accelerate the growth of a leading mobile lifestyle and digital financial services platform in Thailand and support its growth in SE Asia.

    Together with Ant Financial, Ascend Money will grow its online and offline payment and financial services ecosystem and strengthen its trusted and convenient payment services for users and merchants. The deal represents Ant Financial’s first–ever investment in a Thailand–based company and demonstrates the Company’s confidence in the financial services sector in Southeast Asia. With this partnership Ant Financial, which also runs Alipay – the largest mobile lifestyle and payment app in China and beyond with over 450 million users – will provide Ascend Money with strategic and technical support for the growth of its business.

    Leveraging Ant Financial’s capabilities in payment, Big Data, risk control and cloud computing capabilities, the partnership with Ascend Money will build on synergies in digital financial services in order to offer Thai consumers comprehensive and equal access to financial services. Ascend Money is Ant Financial’s first partner in Southeast Asia and second globally after Paytm in India, as the Company aims to “bring small and beautiful changes to the world”.

    “Imagination, innovation and information are key to realizing Ant Financial’s goal of promoting equal access to financial services on a global platform,” Eric Jing, CEO of Ant Financial, said. “As we aim to provide services to over two billion users in ten years, we are building an open ecosystem with our global partners. The payment market in SE Asia has vast untapped potential and we are dedicated to contributing our share to bring a greater variety of convenient and reliable financial services to small and micro enterprises and individual consumers. Ascend Money, as a leader in Thailand, is best equipped to build an innovative financial ecosystem in the country.”

    “Ascend Money’s mission is to enable everyone access to innovative financial services, leading to better lives,” said Suphachai Chearavanont, Chairman of Ascend Group. “The shared vision of financial inclusion and company values in creating opportunity and sustainability have lead us to this partnership.”

    “It’s our life purpose to help the under–served, which include digital consumers and the under-banked,” Punnamas Vichitkulwongsa, CEO of Ascend Group, said. “Our goal is to provide innovative financial services to over one hundred million customers and SMEs in Thailand and Southeast Asia by 2020. Our partnership with Ant will help accelerate innovative financial services and platforms, enabling a strong financial services ecosystem.”

    Ascend Money is the leading fintech company in Thailand and Southeast Asia, operating under the TrueMoney brand for payments and Ascend Nano for lending. With its headquarters in Bangkok, Thailand, Ascend Money operates in six countries, including Thailand, Indonesia, the Philippines, Vietnam, Myanmar and Cambodia. Ascend Money targets two under–served groups, including digital consumers with its innovative mobile wallet application and the under–banked with its massive agent network. It currently provides payment services such as domestic and international remittance, bill payment, top up services, online and offline payments and payroll services. Future services will include lending, insurance and investment. 

    “Ant Financial is setting its footprint worldwide, not only to provide services for its Chinese users, but to promote equal access to financial services globally,” Douglas Feagin, Senior Vice President of Ant Financial, said. “Partnerships are vital for Ant Financial’s growth and we want to work alongside companies around the world who share our missions.”

    In early 2015 Ant Financial joined forces with Paytm, the world’s fourth largest e–wallet, to promote secured digital payment to local users in India.. Ant Financial’s innovative technologies in payment and risk control are now supporting a mobile lifestyle, ranging from online and offline payment, mobile top–up, utility bill payments and movie ticketing, of over 150 million Indian consumers. Meanwhile, Ant Financial is working with dozens of global payment partners, including Concardis, Ingenico, Wirecard and Zapper in Europe, First Data and Verifone in North America, Paysbuy and Counter Services in Southeast Asia, Recruit in Japan and KICC and ICB in Korea.

    Since late 2014, Alipay has worked closely with local merchants at popular destinations for Chinese visitors and tourists, including Korea, Hong Kong, Taiwan and Macau. In March 2015, Alipay was accepted at approximately 15,000 retailers in those countries and regions. By the end of September 2016, this network had expanded to over 80,000 retailers in 70 countries and regions, where restaurants, malls, duty free shops, amusement parks and O2O sharing platforms accept Alipay’s in–store and other offline payments. The network covers countries and regions including the US, UK, Germany, Australia, New Zealand, Thailand, Singapore, Malaysia, Vietnam, Hong Kong, Macau, Taiwan, Japan and Korea.

    During the Golden Week holiday in 2016 (October 1 to 7), transaction volume processed by Alipay at overseas destinations increased by four times compared to the same period last year. The countries and regions outside mainland China with the largest number of Alipay transactions are, in order, Korea, Thailand, Hong Kong, Japan and Germany.  

  • Indonesia launches master plan to breathe new life into Islamic finance sector

    Indonesia launches master plan to breathe new life into Islamic finance sector

    The Indonesian government has launched a national master plan to develop its Islamic finance industry, the latest effort aimed at awakening what is still a niche sector in the world’s most populous Muslim country, Reuters news service reported.

    Islamic finance was introduced in Southeast Asia’s largest economy more than two decades ago but it has managed only modest gains in the country of 250 million, despite multiple regulatory efforts and grassroots initiatives.

    Indonesian Islamic banks hold roughly 5 percent of total banking assets, compared with more than 20 percent in neighbouring Malaysia and about a third of total banking assets in several Gulf countries. The government aims to drive its planned breakthrough via a range of initiatives, from mobilising Islamic charitable funds to modernising investments made by Indonesia’s pilgrims’ fund.

    “This could finally awaken Islamic finance in Indonesia to allow the country to claim its true potential,” managing director of IFAAS Farrukh Raza said, an Islamic finance consultancy which designed the 10-year master plan. “We found that government efforts are very comprehensive but also very scattered. Regulations are there but there is no coordination, promotion is fragmented and those expenses are not always bearing fruit.”

    The initiatives include a government policy to increase use of Islamic bonds, or sukuk, by issuing debt instruments related to infrastructure development, agriculture and education. Under the policy, the government would increase its use of Islamic debt instruments to as much as 50 per cent of total issuance in 10 years time, Raza said.

    Currently, Islamic instruments represent around 13 percent of total outstanding government debt, according to Thomson Reuters data. Indonesia’s pilgrims’ fund would also see the establishment of a dedicated asset management arm to implement a more rigorous investment policy and attract external fund managers.

    The fund receives an estimated $800 million every year from Indonesians wishing to make the Hajj pilgrimage to Saudi Arabia, with new applicants facing a quota backlog of around 15 years, Raza said. “The industry is overconcentrated in retail but there is little in terms of wholesale banking. That is one of the big show-stoppers,” said Raza.

    The establishment of a national coordination committee, possibly chaired by Indonesia’s President Jokowi, Raza said, would help ensure implementation of longer-term objectives, potentially seeing Islamic finance take as much as a 20 per cent share of the financial sector in 10 years time. An additional layer of more complex measures, such as the merger of several state-owned Islamic banks, could help raise that figure to 30 per cent, Raza added.