Banking and Finance News & Trends Recap: July Week 1
Banking and Finance News & Trends Recap: July Week 1
Table of contents
Finance Sector News
1. Market
i. Global Regulators Enforce Stricter Rules on Banks’ Outsourcing Practices
The Basel Committee proposed that bank board directors be ultimately responsible for managing the risks associated with outsourced services, including outages and disruptions. The move comes amidst growing concerns about cybersecurity threats and the operational resilience of the financial sector, given that banks increasingly rely on third-party tech companies for cloud computing. The proposal includes 12 principles for banks and regulators to ensure proper management of third-party risks. The European Union and Britain are also implementing measures to enhance digital operational resilience in the financial sector.
Read the full article about the Basel Committee’s proposed principles.
ii. BOJ Unveils Bond Taper Plan Market Views Summary
The Bank of Japan (BOJ) released a summary of opinions from bond market participants regarding the tapering of its substantial bond purchases. Suggestions varied, with some advocating for a reduction to ¥2 to 3 trillion per month, while others recommended maintaining purchases around ¥4 trillion. There were also calls for more aggressive cuts to ¥1 to 2 trillion monthly. Currently, the BOJ buys about ¥6 trillion in government bonds monthly and plans to announce a detailed tapering strategy at its policy meeting from July 30 to 31. This move follows the BOJ’s decision to slow bond purchases to balance market stability and economic policy. The feedback gathered will help shape the BOJ’s bond-tapering plan, which is crucial for bond players in the market given the bank’s bond holdings, totalling ¥585 trillion, exceed the size of the world’s fourth-largest economy.
Read the full article about BOJ’s summary of opinions.
2. Business Moves
i. Barclays to Boost Hiring to Target UHNW and Family Offices
Barclays announced plans to quadruple its private banking assets in the region by 2028. The move comes as the bank seeks to grow its wealth management presence in Asia, with a focus on targeting ultra-rich clients and family offices in India and Singapore. It includes tripling the size of the bank’s wealth team in these critical markets. Barclays has a long-standing relationship with India’s wealthy, managing assets for 40% of the Forbes 100 wealthiest individuals in the country. Barclays, which re-entered Singapore’s wealth management market three years ago, also invests heavily in the city-state and may establish a variable capital company structure to facilitate client investments. The focus in Singapore will be on clients with over £10 million in investable assets, compared to £3 million in India and £5 million in other regions.
Read the full article about Barclay’s plans for India and Singapore.
ii. HSBC to Restructure Investment Banking to Resemble Peers
HSBC Holdings is restructuring parts of its investment bank to resemble competitors like Citigroup. This involves merging several industry coverage groups to improve efficiency and client service. Following Citigroup’s example, HSBC is forming consolidated groups, such as technology and communications, healthcare, consumer, retail, and a combined natural resources team. This revamp comes as HSBC prepares for declining interest rates, which could impact profits. The bank is also slowing hiring, reducing travel and entertainment expenses, and encouraging more client meetings. CEO Noel Quinn is preparing to step down, with his successor expected to be announced soon. HSBC’s upcoming earnings report is anticipated to show a decline in revenue and profits.
Read the full article about HSBC’s investment banking plans.
iii. Regional Japan Lender Offers Salaries Comparable to Big Boys to Attract Talent
Regional Japanese lender Yamaguchi Financial Group announced plans to offer competitive compensation to attract market specialists, similar to what Japan’s largest banks provide. The move comes as local banks seek to boost their securities investments to offset declining business opportunities due to an ageing population. The competition for bond traders and other specialists is also increasing with rising interest rates. However, banks face challenges in hiring experienced market professionals. The bank plans to hire more mid-career workers and balance the ratio of mid-career and new graduate hires in the future.
Read the full article about Yamaguchi Financial’s compensation package.
3. People Moves: BNP Paribus and Barclays
BNP Paribus: BNP Paribas Securities appointed Elaine Tan as the new head of asset owners and asset managers for Asia Pacific (APAC), effective August 1. Tan has over 20 years of experience and a long tenure at BNP Paribas since 2007. She will also join the executive committee for securities services APAC. This appointment follows an internal reshuffle where Tan replaces Philippe Tassin, who has taken on a new role as head of EMEA asset owners and asset managers client lines. Tan was previously the head of fund services products and solutions for APAC.
Barclays: Barclays appointed Hussain Selanim as managing director and head of investments for India and global Indians. Based in Mumbai, Selanim will oversee investment products and services, including wealth advisory, for the private banks and wealth businesses targeting these client segments. Selanim previously served in a leadership capacity at CorpCare Ventures and held senior roles at Citibank, UBS, and Aditya Birla Finance.
Read the full article about Elaine Tan’s promotion to APAC head.
Investment, PE & VC News
1. Trends
i. Investors Driven to Singapore after RBI Impose Restrictions on Local Rupee Futures
The open interest in rupee/dollar currency futures on the Singapore Exchange (SGX) has surged as investors shift their arbitrage and hedging activities to Singapore. This move follows the Reserve Bank of India (RBI) imposing restrictions on local currency futures, where underlying foreign exchange exposure is required to trade in exchange-traded rupee derivatives. The rules aim to increase local market volume and control over the currency but have inadvertently pushed hedging activities offshore, particularly to the SGX. As a result, open interest in rupee/dollar futures on the SGX has increased by 400% compared to an average of 92,000 contracts in 2023. In contrast, open interest in currency futures on the National Stock Exchange of India has more than halved to 2.7 million contracts ($2.7 billion in notional value).
Read the full article about the flow of investors to Singapore.
2. Business Moves
i. Victor Li Plans to Institutionalise Hong Kong Family Office
Victor Li Tzar-kuoi, the chairman of CK Hutchison and son of tycoon Li Ka-shing, announced that the Li family would institutionalise their family office in Hong Kong. This move supports the government’s aim to enhance the city’s status as an Asian wealth hub. Long-time colleagues and family members will manage the family office. The initiative aligns with Hong Kong’s broader strategy to enhance its wealth management industry. Since last year, InvestHK has supported 89 family offices, with another 130 planning to set up operations. The scheme aims to mitigate previous property market speculations by excluding residential property investments.
Read the full paid article about Victor Li’s Hong Kong family office plan.
ii. Xiaohongshu Gets Backing from Major VCs
Chinese social media platform Xiaohongshu recently sold its shares, with the company valued at $17 billion, a decrease from its peak valuation of $20 billion. Investors in this round included DST Global, Sequoia China, Hillhouse, Boyu Capital, and CITIC Capital. This marks DST Global’s first investment in Xiaohongshu, highlighting its confidence in the Chinese internet sector. Despite a quiet primary market, demand for Xiaohongshu’s shares remains strong. As Xiaohongshu approaches its IPO, it is anticipated to follow in the footsteps of other major Chinese tech companies like ByteDance and SHEIN, which are also preparing for potential IPOs.
Read the full Chinese article about DST’s investment in Xiaohongshu.
iii. LongRiver Completes Fundraising for One of China’s Largest VC Funds
LongRiver Investments completed fundraising for its first USD fund, raising nearly $400 million, making it one of the largest VC funds in recent years. Unlike typical VC firms, LongRiver’s team comes from insurance investment backgrounds. The team is led by Zhang Jiang, who has extensive experience in engineering and investment and a decade-long solid track record at Ping An Ventures. The fund focuses on early-stage VC investments in healthcare and technology sectors with a strategic and research-driven approach. The team has participated in over 50 projects with successful exits in various stock markets. To date, it has already invested nearly $100 million in 14 projects.
Read the full Chinese article about LongRiver’s USD Fund.
Read the full paid article about LongRiver and its founder.
iv. Alternative Asset Manager PAG Considers New China Funds
PAG, Asia’s largest alternative asset manager, is creating a China fund to attract local capital and is also planning a fund to meet demand from non-North American investors. The first fund raised about three billion yuan from local governments in Jiangsu province. PAG is considering raising US$1 billion for the second fund, targeting interest from Middle East and Asia-based investors. Despite a general retreat by major US and Canadian pension funds from China, PAG remains optimistic about China’s prospects. The company may use the Qualified Foreign Limited Partnership pilot programme to attract foreign capital.
Read the full article about PAG’s plans to establish a China fund.
3. People Moves: JLL, Raffles Family Office and RBC Wealth
JLL: JLL promoted Anny Zhang to CEO for China, effective September 1. Based in Shanghai, Zhang will oversee growth, operations, client relationships, and market positioning in mainland China. Zhang first joined JLL in 2007 and held senior roles, including managing director for East China and head of China’s leasing business. Concurrently, Alex Barnes, managing director for Hong Kong and Macau, will take on further responsibility for JLL Taiwan.
Raffles Family Office: Raffles Family Office appointed former Royal Bank of Canada (RBC) wealth management chief Terence Chow as its group chief operating officer (COO) effective July 2. In his new role, Chow will oversee business transformation, management, risk management, corporate real estate, and procurement from Hong Kong. He will also lead operations, technology, and innovation as a board member. Chow has over 20 years of financial services experience and holds an MBA from the Ivey School of Business. His achievements at RBC include driving revenue growth and enhancing operational efficiencies.
RBC Wealth: RBC Wealth Management has made several new hires in Singapore and Hong Kong to strengthen its presence in the Asia-Pacific market.
In Singapore:
- Daniel Soo joined as managing director and market head. A 28-year veteran, Soo has worked in institutions like UBS, Credit Suisse, and Standard Chartered Private Bank.
- Lawrence Yap joined as executive director. He has prior experience at Credit Suisse, Standard Chartered Private Bank, and HSBC Private Bank.
In Hong Kong:
- 25-year industry veteran Joe Lau joined as executive director and team head. He previously served at Credit Suisse.
- Sarah Tan joined as executive director. She previously served at EFG Bank and has 25 years of private banking experience.
- Ada Wang joined as executive director. She previously served as the director for wealth management at Credit Suisse and has over 20 years of experience.
- Christy Yuan joined as executive director. She previously served at Credit Suisse and has over 25 years of experience in private banking and wealth management, with a focus on the Greater China markets.
- Danny Zhao joined as director. He previously served at Credit Suisse and has over 17 years of experience in the private banking industry, with a focus on Greater China.
Read the full article about JLL’s China CEO.
Read the full article about Raffles Family Office’s COO from RBC.
Gain More Market Insights with JC
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- Clara Wang: clara.wang@jcconsulting.sg
- Pan Lingling: lingling.pan@jcconsulting.sg
- Eve Hao: eve.hao@jcconsulting.sg
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Image Source:
- Coindesk
- South China Morning Post
- Raffles Family Office