by Alia Moubayed, Barclays
The economies of Asia-Pacific and the Gulf Cooperation Council (GCC) have become increasingly interconnected. Trade between the two blocs almost tripled over the past five years, with Asian demand accounting for almost two-thirds of total GCC exports, while a third of GCC imports come from Asia.
When five banks failed stress tests, the new central bank governor stepped in and fired the CEOs of all five banks, at the same time recapitalising them with $2.4 billion and effectively taking control of the institutions. The country: Nigeria. The time: now.
The announcement this morning that ANZ was buying RBS’ business in six countries was no surprise to anyone who had been following the story -except maybe for the price: at $550 million, ANZ is paying a much smaller amount than the $980 million that had been mentioned in recent press reports. Now the hard work begins.
Taiwan may be protecting its state-owned banks in order to preserve the status quo; Taiwanese view banking as national infrastructure and expect it to be free, much to the chagrin of banks without state backing that need a steady stream of fees to make their businesses sustainable. The Taiwanese take a dim view of privately-owned banks that charge fees, flood the market with unsecured lending products and sell investment products made of pixie dust. Perhaps there is a natural limit to growth for these institutions until society can change.
This time around, there are nearly as many surprises at Citi’s Asia franchise as at its New York the headquarters. With all the bluster about Asia being the bank’s most important region, it was reorganised last year along geographic lines as part of the massive company’s general restructuring, and Ajay Banga’s regional CEO role was created. Now, over a year after, Banga is jumping out and heading to MasterCard.
A senior manager at one of the banks once told me that the best thing for banks like Shinsei and Aozora (and Tokyo Star, also partially private equity-owned) would be to merge to get some real scale, but they were being held back by their majority owners and their “egos the size of planets”.
Just back from Shanghai last week, scene of the second Lujiazui Forum which spotlighted the government’s ramped up efforts to develop the commercial hub into a full-fledged international financial centre by 2020. These efforts could spell good news for HSBC, Bank of East Asia and other foreign banks that set up local headquarters in Shanghai [...]
A funny thing seems to be happening in Asia, with several lenders hopping borders to set up shop in the unlikeliest places. Strangely enough, the ones that are doing most of the hopping seem to be the Koreans. Kookmin has bought into both Kazakhstan and Cambodia, and now Shinhan is moving into Japan.
Only a month [...]
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