A Week of Banking
Regional/International
HSBC said it is to buy out SwissLife
Holdings’ ownership in two ventures for
228.8 million euros ($305 million). It will
buy the remaining 50.01 percent stake it
doesn’t already own in life insurer Erisa
and property and casualty insurer Erisa IARD.
The transaction is subject to approval by
regulators.
Citigroup is expected to cut more than
15,000 jobs or move them to less expensive
locations as part of a restructuring
programme. Analysts expect the move to
reduce costs by more than $2 billion a year.
The review is likely to involve cuts in some
of the regional headquarters’ operations.
HSBC Holdings chairman Stephen Green said
the company will scale down its U.S.
sub-prime mortgage division. It will reduce
mortgages to riskier borrowers.
Australia/New Zealand
Bendigo Bank directors have decided to open
the bank’s doors to other prospective buyers
following the unsolicited takeover from Bank
of Queensland. Goldman Sachs, St. George
Bank, National Australia Bank and Westpac
Banking Corp. have been cited as possible
predators.
Australian Prudential Regulation Authority
has provided support for the establishment
of non-operating holding companies for
banks. But it warns banks to protect
depositors and to maintain their capital
levels.
Bank of Queensland has posted a 21 percent
rise in first half profit. The bank’s first
half income rose 24 percent to A$219.6
million ($178 million) as interest income
grew by 21 percent to A$154 million ($125
million).
China
Citigroup said it plans to nearly double its
network in China to 30 from 16 at the end of
2007. It will also boost its headcount to
4,000 from 3,000 this year in line with its
booming business.
UCBH Holdings said it will buy China’s
Business Development Bank for $205 million
to speed up growth in China. It has signed
an agreement to buy all of the shares of
Business Development Bank from owners
including Thailand’s Charoen Pokphand Group.
China Banking Regulatory Commission said it
continue to push all city commercial banks
to fulfill the mandated capital adequacy
ratio of eight percent by the end of 2008.
Out of more than 100 city commercial banks,
38 of them still fall short of the
requirement.
Hong Kong
China Development Bank and China
Export-Import Bank were reported to sell the
first yuan-denominated bonds in Hong Kong.
China Export-Import Bank provides trade
finance to mainland companies and China
Development Bank finances mainland
infrastructure projects.
Dah Sing Banking Group is said to have been
granted approval to acquire 17 percent stake
in China’s Chongqing City Commercial Bank.
It will be buying Chongqing City Commercial
Bank at RMB 2.00 ($0.258) per share.
Citigroup has appointed Kaven Leung as head
of Asia private banking at Citigroup Private
Bank. He will continue to be based in Hong
Kong and oversee the private bank’s
businesses in Singapore, Hong Kong, Taiwan,
China, South Korea and other Asian
countries.
Indochina
The Viet A Commercial Joint Stock Bank said
it plans to issue shares to raise its
registered capital from VND 500 billion
($31,200) to VND 1.25 trillion ($78 million)
in 2007. The bank is currently in
negotiations to select a foreign investor.
State Bank of Vietnam has tightened the
regulations on the establishment of
joint-stock commercial banks. The
regulations were aimed at curbing negative
phenomena and ensuring the stability of the
banking system.
UBS AG said it will strengthen its existing
cooperation with Vietcombank. The two banks
plan to strengthen their collaboration in
terms of technology, knowledge sharing,
training as well as product distribution.
Indonesia
Bank Internasional Indonesia has joined an
ATM network called ATM Bersama to help
increase its fee-based income by 20 percent
in 2007. Customers will be able to make
online transactions through 11,200 ATMs
across the country. The bank operates 720
ATMs nationwide.
Bank Indonesia has relaxed the regulations
restricting lending to defaulting borrowers
to revive bank lending to the real sector.
Banks are now allowed to extend loans to a
defaulting borrower if they were to be used
to fund different projects, and there was a
clear separation of the cash flow between
the projects.
Bank Negara Indonesia said it plans to sell
its 48.5 percent stakes in Bank Finconesia.
If unsuccessful, it will invite strategic
investor to manage the joint venture bank.
Japan
HSBC is set to launch retail banking
operations in Japan in early 2008. It plans
to open 50 branches within four years. The
bank is to offer high-end banking and wealth
management services to lure the most
affluent customers from the largest retail
banks.
U.S. private equity group Lone Star was said
to be auctioning off its $1.4 billion stake
in Tokyo Star Bank. Several buyout firms
were in the running to buy part of Lone
Star’s 68 percent stake in the bank.
Former vice president of Mizuho Corporate
Bank, Tsunehiro Nakayama will replace
Yoshiyuki Fujisawa as Merrill Lynch Japan
Securities’ chairman on May 1, 2007.
Fujisawa will become adviser to the U.S.
brokerage house’s Japanese unit.
Korea, South
Shinhan Bank was reported to be looking at
buying a Russian bank. The move is said to
be part of the bank’s efforts to double its
overseas branch network by 2013 in a bid to
become one of the region’s leading banks.
Woori Bank was seeking to raise around $500
million from the sale of a subordinated bond
in the international debt market. The bank
plans to market its hybrid Tier 1 bond from
mid-April in Asia, Europe and the U.S.
According to the Financial Supervisory
Service, employees of Shinhan Financial
Group were the highest paid in 2006 among
listed firms on the main stock market.
Shinhan employees received the largest
salary of 98 million won ($104,395) on
average.
Malaysia
The Employees Provident Fund was reported to
have approached Barclays and Royal Bank of
Scotland as well as other international
lenders to sell a 20 percent stake in Rashid
Hussain. It also hopes to attract a private
equity fund for another 20 percent stake by
the end of 2007.
United Overseas Bank (Malaysia) expects its
fee-based income to contribute up to 40
percent of its total earnings by end of
2007. The bank was seeking to expand its
foundation of fee-based services by boosting
its wealth management business that includes
selling insurance via bancassurance.
Standard Chartered Bank Malaysia plans to
set up an Islamic banking subsidiary in the
next two years. It hopes to double the size
of its Islamic assets in 2007 to RM 4
billion ($1.1 billion) from RM 2.04 billion
($588 million) in 2006 as it expands its
product range and sales network.
Middle East
Lebanese Bank Audi SAL-Audi Saradar Group
has expanded to Egypt. It plans to open a
total of 40 branches in Egypt by the end of
2007. The bank currently has branches in
France, Switzerland, Jordan, Syria, Saudi
Arabia, Qatar, Sudan and the UAE.
BNP Paribas and its Turkish partner TEB are
planning to raise their market share in
Turkey to five percent from the current 1.5
percent by the end of 2010. They will focus
on organic growth by opening up more
branches to gain customers in the credit
card and mortgage sectors.
Dubai Holdings has set up a new company
Dubai First to capture six percent of the
UAE credit card business by the end of 2007.
Dubai First will operate as a subsidiary of
Dubai Financial with an authorized capital
of Dh1 billion ($272 million) and paid up
capital of Dh350 million ($95 million).
Philippines
Union Bank of the Philippines was to sell
P2.038 billion ($42 million) worth of soured
loans in a bid to further clean up its
books. The board had approved the sale of
the bad loans to Deutsche Bank AG, London.
Al-Amanah Islamic Bank will be put up for
public bidding on May 21, 2007 with the
floor price set at P900 million ($18.7
million). The auction was expected to
attract foreign Islamic bankers as well as
local business groups.
Philtrust Bank has received approval to
operate as a universal bank. With the
license, Philtrust can enter investment
banking and ‘non-allied’ activities such as
real estate.
Singapore
DBS Group Holding was reported to be seeking
partners to bid for a stake in Korea
Exchange Bank held by the U.S. private
equity fund Lone Star Funds.
OCBC Bank said it preferred to focus on
South-east Asia and China but will not place
the same emphasis in India.
Standard Chartered has unveiled its travel
industry portal called Travel Perks. Visa
cardholders can now instantly convert reward
points into travel once they register at the
website. Customers no longer have to wait
till they have enough points for a
particular travel deal.
South Asia
Karnataka Bank has been given approval for a
Tier II bond offering. The timing of the
issue had not been fixed.
Temasek Holdings and the Government of
Singapore Investment Corporation were
expected to obtain approval by June 2007 to
own 10 percent stake each in India’s ICICI
Bank.
Spanish bank BBVA has received approval to
open its representative office in Mumbai.
The office was to initiate closer contacts
with the Indian market and to support the
group’s business operations in India. Joiel
Akilan has been appointed as chief
representative in India.
Taiwan
Taishin Financial Holdings said it will
inject NT$14.5 billion ($438 million) into
Taishin International Bank to improve its
capital adequacy.
Fuhwa Financial Holdings will be renamed
Yuanta Financial Holding after the merger
with Yuanta Core Pacific Securities with
effect from April 9, 2007. The group plans
to use NT$20 billion ($604 billion) in funds
obtained from Yuanta to improve the
financial structure of its banking arm and
to acquire rivals.
Taiwan’s government is to ban bank chief
executives and presidents from taking
similar top management jobs in non-financial
companies. The move is part of the an
attempt by the Financial Supervisory
Commission to tighten supervision of the
financial institutions.
Thailand
Canada-based Nova Scotia bank will acquire
more than 24 percent of Thanachart Bank
through a capital increase. The sale price
to Nova Scotia is not known but sources
estimated the deal to be worth 7 billion
baht ($214 million).
Kiatnakin Bank may acquire a foreign
strategic partner to support the bank’s
business expansion. The bank also plans to
widen its bancassurance business via
cooperation with insurance companies. It
will set up a new venture capital firm for
the business.
With the economic outlook weakening over the
past few months, HSBC Thailand said it will
adopt better cost controls while still
maintaining its investment plans for key
technologies.
