FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

GlobeOne partners InvestaBank and Bankaool to bring M-Banking tech to Mexico

GlobeOne, a new financial technology company, today announced a partnership with InvestaBank and Bankaool that will bring GlobeOne’s mobile banking solution to Mexico later this year.

Through this new partnership, GlobeOne will provide a mobile interface for a suite of financial services offered by InvestaBank and Bankaool in Mexico, bringing bank services to those who are currently underserved by existing financial services.

“Only 45% of the population in Mexico has a bank account, which is why this partnership is an exciting development for Mexican consumers,” said Michael Wolper, GlobeOne member and Chief Marketing Officer. “Through GlobeOne’s growing global network, consumers will have access to the basic financial services necessary to build a strong financial future, and banks will have a new platform to serve the many digitally connected Mexican consumers who do not participate in the traditional, brick-and-mortar banking system.”

GlobeOne leverages mobile technology to provide a digital banking solution that is expected to launch in the United States and Mexico in the fourth quarter of 2015. As new banking partners are secured around the world, additional countries will join GlobeOne’s integrated global network. GlobeOne’s innovative app will offer paperless checking, a security savings account, a line of credit, domestic and international transfers between GlobeOne members, and access to the global income-building SocialBoostTM program, which gives members the opportunity to earn a new income stream while helping those who need it most.

“We are excited to work with GlobeOne and launch a system, an app, which will add to our business model of financial inclusion in the country. Technology is part of every person’s daily life, which is why this is a great opportunity to expand financial services to the unbanked and underserved population in Mexico,” said Francisco Meré Palafox, Chief Executive Officer of Bankaool.

“Our partnership with GlobeOne guarantees our ability to provide state-of-the-art banking and payment technology to the widest Mexican population who will now have mobile phone access to the best in financial services,” added Enrique Vilarte, Chief Executive Officer of InvestaBank.

GlobeOne executives will present the mobile interface and features at the “Mobile Money & Digital Payments Americas” conference in Mexico City on March 24th.

Source: Finextra,19.03.2015

Filed under: Banking, Latin America, Mexico, , ,

In the future, BBVA will be a software company

Fresh from his forecasts last month that half of the world’s banks would get left behind by the digital revolution in financial services, BBVA chairman Francisco González has mapped out a new future for his organisation, not as a bank, but as a software company.

González pointed out the dramatic impact that technology is having on the transformation of the financial sector during a speech at the Mobile World Congress in Barcelona.

“BBVA will be a software company in the future,” González told the audience, recalling that the bank embarked on its “digital journey” eight years ago.

During this time it has made significant investment to build a new customer-centric technological platform, which operates in real time and is also modular and scalable. This platform allows BBVA to develop a new generation of services to compete with new startups and major digital companies, with the emphasis on mobile says González.

“The mobile has emerged as the driving force for disruptive innovation in banking,” the BBVA chairman said.

The number of BBVA mobile customers has increased 14-fold in three years and totaled 4.3 million at the end of 2014.

González underlined the success of the bank’s mobile payments app BBVA Wallet, which already claims over 450,000 downloads in Spain and is poised to be rolled out in Mexico, the US and Chile. “It’s the world’s most-used cloud-based NFC payment app,” the BBVA chairman boasted.

The bank currently has 450 people working on the wallet, but this is just the beginning. Currently just 3000 of its 110,000 staff work on the digital side but in five years González reckons it will be a majority, as the company re-engineers its workforce to compete on equal terms with the likes of Apple, Samsung, Google and Amazon.

“There is a threat element which I like because banking needs competitors,” said González. “We need to be more efficient but we can also collaborate with them.”

Source: Finextra 05.03.2015

Filed under: Banking, Chile, Latin America, Mexico, Services, , , ,

Avaloq positioned as a ‘Leader’ in Magic Quadrant for International Retail Core Banking

The Avaloq group, a leader in integrated and comprehensive banking solutions, is proud to announce it has been positioned in the ‘Leaders’ quadrant by Gartner in the recently released ‘Magic Quadrant for International Retail Core Banking (IRCB) 2013’ report. Avaloq sees this as recognition of its strong community work and ability to deliver a full-service BPO option to its customers.

For Avaloq being positioned in the Magic Quadrant is a confirmation of its success in the retail segment and its market vision. “We are convinced that our unique community including client banks, universities, associations and partners gives us that extra edge by gaining important market knowledge. The feedback coupled with our own vision and insights from our BPO centres ensure that we stay ahead of trends and develop product capabilities accordingly”, says Francisco Fernandez, CEO of Avaloq. Pascal Foehn, Head of Marketing and Sales HQ Avaloq, adds: “After having been named ‘best selling private banking solution in the world’ by IBS, we are proud of Gartner’s recognition as a leader that is able to address present and future needs of retail banks.”

In the report, Gartner positioned vendors based on two parameters: ‘completeness of vision’ and ‘ability to execute’. To be included in the IRCB 2013 report vendors had to demonstrate market traction and momentum as well as product capabilities in international retail core banking.

Gartner’s Magic Quadrant on international retail core banking (IRCB) software assesses vendors on the multi-currency products they offer in support of the bank’s financial transaction management in the retail banking market. Avaloq provides a fully integrated front to back banking solution and has a worldwide customer base of more than 100 banks, including tier one banks in the most demanding financial centres.

¹Gartner, Magic Quadrant for International Retail Core Banking, Don Free, Ethan Wong, October 8, 2013.

Source: Avaloq, 17.10.2013

Filed under: Banking, News, Wealth Management, , , ,

Avaloq the Swiss Wealth Management Solution provider opens office in Australia

The Avaloq Group, the international reference for integrated and comprehensive banking solutions, is pleased to announce the opening of its first branch office in Australia.

As part of its continuous internationalisation strategy and aim to extend its presence in the most demanding financial markets globally, Avaloq has opened an office in Australia end of last year. The expansion to Australia – a new continent for Avaloq – comes after the company successfully established local offices in various regions in recent years.

Avaloq signed its first customer on the Australian continent – one of the reasons why the company decided to further extend its international presence and open a branch in Sydney. The Australian market bears a great potential for wealth management platforms such as the Avaloq Banking System. The fully integrated solution offers the entire field of investment products and additionally covers local tax and superannuation requirements. Combined with a team of experts, equipped with substantial know-how and experience regarding the Australian financial market, Avaloq significantly improves its local position.

“Opening an office in Australia is yet another important step in our internationalisation strategy and an additional milestone in Avaloq’s remarkable company history. Building up a local presence in the most demanding financial centres worldwide ensures that we are close to the markets and companies we work with. This allows us to cater towards our client’s needs and requirements without having to work around different time zones”, says a delighted Francisco Fernandez, CEO Avaloq. “The Australian market has immense potential, with demand for wealth management platforms increasing. Being present in Australia is the logical move for the company”, Fernandez continues.

The new Avaloq branch in Australia will significantly profit from the vast experience of the regional headquarters in Singapore, which was established in 2007. The Singapore branch has seen strong expansion in recent years under the management of Martin Frick, Managing Director Asia Pacific.

Source: Avaloq, 12.02.2013

Filed under: Australia, Banking, Singapore, Wealth Management, , , , , , , ,

The Currency Investor Magazin Autum 2010

The Autumn 2010 edition of Currency Investor magazine is now available. You can view a complimentary digital version at this link:


Currency Investor Autumn 2010

This exciting new quarterly magazine is designed to help global Retail and Institutional investors discover ways to leverage currencies  as a tactical asset class for their risk management and direct investment and trading requirements.

The next edition is planned for publication in Q1 2011.

Source: Currency Investor 23.11.2010

Filed under: Asia, Latin America, News, Services, , , , , , , , ,

Online Stock Trading and Fraud have come a longway in the past 10 years

Online trading has definitely come a long way in the past decade.  Innovation and technology now allow you to follow and trade stocks from your phone or laptop, not to mention accessing advice and chart information at the same time.  However, our new online powers have lulled us into a false sense of security in today’s high paced electronic world.  The criminal element in our society is counting on that fact to ply their own online trade activity, that of deceiving you out of your hard earned cash.

Yes, the unscrupulous few among us had to spoil the fun for all investors.  Does $400 billion a year in securities related fraud losses get your attention?  The FBI believes it should, as does the SEC and CFTC.  The Internet has been the great enabler of our times, providing access to mountains of information and a dizzying array of applications to bring convenience to our hectic lives.  It also has brought anonymity, the cloak that hides the invisible swindler that may have tapped you as his next target of opportunity.

Does this mean that you should forgo buying an iPad and take a course in risk management instead?  Of course not!  Fraud mitigation starts and stops with you and your ability to be skeptical and use common sense.  Here are a few suggestions to help you avoid the most common pitfalls for the average investor:

Business Partners: Fraudulent brokers have stolen millions from investors.  Do your due diligence.  There are many review services for checking banks and choosing the best stockbroker or best forex broker.  Make sure your bank has a strong balance sheet, and that your broker is above board and onshore.  Consult your banker or broker for investment advice on every investment deal.

Warning Signs: Some signs, though obvious, need repeating.  Here are a few tell-tell signs:

  • Unsolicited offers should be questioned or avoided;
  • If it sounds too good to be true, it most likely is;
  • If there is little or no risk, then it isn’t for real;
  • If there is a sense of urgency, walk away;
  • Swindlers talk fast so you won’t ask questions;
  • If written explanations are not forthcoming, stop considering it;
  • If it sounds too complicated, don’t waste your time;
  • Con Artists always dress well to impress and deceive;
  • Ignore referrals from friends, until after doing your due diligence;
  • Be very skeptical when asked to send a check or wire funds.

Actual Scams Often Repeated:

The Ponzi Scheme: The swindler pays high returns from new client deposits to gain your trust and new referrals.  He takes what is left.  Bernie Madoff and Kenneth Starr are prime examples of the craft;

The “Pump-and-Dump”:  Mass communication of rumors is used to pump up a stock’s value.  The swindler unloads his shares at a huge profit only to leave unsuspecting Buyers holding the bag after the price plummets;

The “Tipster”:  The Tipster calls 100 people, passing along a “tip” to gain confidence.  He tells half that the stock will rise, and the other half that it will fall.  The next day, he now has 50 “marks” that believe.  He may continue his confidence game until he finally asks you for money.  Be sure to walk the other way.

Investment fraud generally happens to those people who never expect it or are easily tempted by greed.  Protect yourself by heeding these warning signs and being aware of the most typical scams that con artists love to use.

Source: FOREXFraud, 13.08.2010

Filed under: Banking, News, Risk Management, Wealth Management, , , , , , , , , , , ,

Kroll LATAM Risk Report August 2010: Money Laundring, Mobile Banking, Mexican Security, Brazilian Litigations

MONEY LAUNDERING  Banks on High Alert

Throughout much of Latin America and the Caribbean, banks and other financial institutions are getting tougher on money laundering. For the bad guys, the game of cat-and-mouse continues, as they jump from one country to another, looking for the weakest link in the chain. GO TO FULL STORY

BANKING & TELECOM  Mexico The Regulator as Hero

Mexico’s unheralded decision to design rules for mobile banking is a major milestone on the road to including millions of unbanked and underserved Latin Americans in the financial system and the formal economy. GO TO FULL STORY

Mexico Corporate Security

An annual survey conducted by Kroll and the American Chamber reveals a higher sense of insecurity among business executives at multinational and Mexican corporations. The safety of employees and executives remains the top concern for corporate heads of security. GO TO FULL STORY

CORPORATE LAW Challenging Sham Litigation  in Brazil

A Brazilian regulatory agency takes on Germany’s Siemens for alleged anti-competitive practices in a case that is likely to set an important precedent for regulators and the courts in protecting free market competition.  GO TO FULL STORY

Source: KROLL, 06.08.2010

Filed under: Brazil, Central America, Chile, Colombia, Latin America, Mexico, News, Peru, Risk Management, Venezuela, , , , , , , , , , , , , , ,

China’s banking sector Serious Problem with Bad Loans

Professor Pettis at Peking University explains that“in China, even if you believe that all the NPLs currently in the banking system have been correctly identified (a claim which few Chinese bankers believe), no one doubts we are about to see a surge in NPLs thanks to the out-of-control lending expansion of the past two years.  But things are even worse than the nominal numbers imply.  As I discussed in my April 6 entry, when we are trying to estimate the cost of a banking crisis we need to think about more than simply the ability of borrowers to meet current obligations.

This is because, as in the case of the Japanese government obligations, when borrowers are able to benefit from artificially low interest rates, the effect is of hidden debt forgiveness which must be paid for by the net lenders, who are, as in the case of Japan, the beleaguered households.  In other words, if you want to know how much real bad debt there is out there that must be cleaned up, you need to calculate what share of the loans would go bad if interest rates were raised by at least 300-400 basis points, the minimum needed to bring Chinese interest rates in line with an appropriate rate.  This suggests that the Chinese banks, if obligations were correctly counted, might have much larger amounts of bad debt than any of us realize, and this needs directly or indirectly to be cleaned up.”

Here are some recent reports from financial press sources regarding the health China’s banking sector:

-”SHANGHAI -(Dow Jones)- The non-performing loan ratio in China’s banking industry declined to 1.58% by the end of 2009, 0.84 percentage point lower than the figure at the beginning of 2009, China’s banking regulator said Saturday.”(1)

-”BEIJING: Chinese financial institutions’ non-performing loans (NPL) ratio edged down 0.1 percentage points to 1.48 percent in January, the China Banking Regulatory Commission (CBRC) said Friday.”(2)

-”BEIJING, Apr 14, 2010 (SinoCast Daily Business Beat via COMTEX) — Non-performing loan (NPL) ratio of China Development Bank, a policy bank, had reached 0.85% by the end of March”(3)

I don’t believe those reported percentages are accurate.

For context, here is an analysis of China’s non performing loan issue from 2002:

“Standard and Poor’s (S&P), which rates China as investment grade, said on Thursday it would take Chinese banks 10 to 20 years to cut average non-performing loans (NPLs) ratio to a manageable five per cent.

It estimates the Chinese banking sector’s average NPL ratio is atleast 50 per cent, higher than the 30 per cent estimate of China’s central bank governor Dai Xianglong.

“The cost of necessary write-offs could be equivalent to $518 billion or almost half of China’s estimated gross domestic product of $1.1 trillion for 2001,” Mr Terry Chan, a S&P director in Hong Kong said.

The agency said China would be unlikely to cut NPLs in its banking sector to 15 per cent within five years, as its central bank wishes, given the current operating performance of the sector.”

I seriously doubt that the problem identified in 2002 has been resolved yet.  There is an analysis here that supports my assertion.

Source:SinoRock, 07.07.2010

Filed under: Banking, China, News, Risk Management, , , , , , , , , , , , ,

China Property Market Beginning Collapse That May Hit Banks, Rogoff says

July 6 (Bloomberg) — China’s property market is beginning a “collapse” that will hit the nation’s banking system, said Kenneth Rogoff, the Harvard University professor and former chief economist of the International Monetary Fund.

As China’s economy develops, “especially at the speed it’s growing, it’s going to have bumps,” said Rogoff, speaking in an interview with Bloomberg Television in Hong Kong. He also said that while recoveries across the global economy are “very slow,” the danger of a return to recession isn’t “elevated.”

Rogoff’s concern echoes that of investors, who sent China’s benchmark stock index to its worst loss in more than a year last week. China’s data have been a focus because the nation has led the global recovery from the worst postwar recession.

Chinese authorities have this year been trying to cool the economy as it expanded at an 11.9 percent annual pace in the first quarter, and to reduce property-market speculation. The central bank has told lenders to set aside more money as reserves, and targeted a 22 percent cut in credit growth at banks this year, to 7.5 trillion yuan ($1.1 trillion).

The efforts have contributed to a slump in real-estate sales, while prices continue to climb. The value of property sales dropped 25 percent in May from the previous month.

“You’re starting to see that collapse in property and it’s going to hit the banking system,” Rogoff said today. “They have a lot of tools and some very competent management, but it’s not easy.”

Growth Outlook
Goldman Sachs last week cut its growth forecast for China this year to 10.1 percent from 11.4 percent because of the government’s monetary tightening measures.
Rogoff also said it’s unrealistic to expect China to continue growing its exports to the rest of the world “at the pace it’s been doing.”

“It’s impossible. At some point they have to redirect their strategy” for economic growth, he said.

For your info:
1) About one third of the total bank lending (about 40 trillion) is in real estate sector in China.
2) Most of the bank lending has used land and real estate properties as collateral.

Source: Bloomberg, 06.07.2010

Filed under: China, News, Risk Management, Services, Wealth Management, , , , , , , , , ,

Santander starts marketing Latin American funds in Asia

Banco Santander, a Spanish bank with a large presence in Europe and Latin America, has created a new role in Hong Kong to develop its asset-management business in Asia.

With the necessary licences in place, Alexander de Laiglesia will concentrate on selling funds manufactured by Santander Asset Management in Latin America and Europe to Asian wholesale distributors and asset managers.

De Laiglesia, a managing director, has been with the firm for 20 years, starting in Tokyo as a deputy branch manager. He returned to Japan from Madrid in 2002 with a secondment to Shinsei Bank. He moved to Hong Kong last year, and has been developing the asset-management role for the past several months. De Laiglesia has also worked in Hong Kong and the Middle East in the 1980s with Standard Chartered Bank, and he speaks Japanese.

Santander pursues a universal banking model in its core markets of Spain, Portugal, the UK and the countries of Latin America, including Brazil, as well as the US. The bank has built investment teams in those countries.

The group mainly provides local products to its local investors. It cross-sells some products to provide these local customers with international exposure and may also provide third-party funds. Worldwide, Santander Asset Management manages €120 billion ($168 billion) of assets.

Asian markets are not core to this business. “We are not here to manage assets,” says de Laiglesia. “We are here to channel investments from Asia to our core markets.” That means competing in the niche of selling Latin America funds to Asian wholesalers and domestic fund houses. Santander will also seek to develop sales to institutional investors as well.

“We are the largest regional asset manager in Latin America, with big investment teams in markets such as Brazil, Chile, Mexico and Argentina,” de Laiglesia says.

Santander has already notched up business in Japan as adviser to a couple of Brazil equity funds launched by Daiwa Asset Management, and in Korea, where Industrial Bank of Korea sells a Latin America equities product. Japan, in particular, has wealth, its investors are comfortable with Brazilian securities and that’s an asset class where domestic asset managers do not have a local presence, de Laiglesia says.

Santander is flexible with regard to the type of relationship it will pursue with Asian distributors; it may act as an investment adviser, a provider of white-label products or a provider of mutual funds from its Luxembourg range. The firm will also seek segregated mandates from or sales of its Luxembourg funds to Asian institutions.

In addition to applying for regulatory licences, de Laiglesia is still researching which markets to focus on and which thematic products to highlight. Japan is the priority, but the region’s other large markets — Australia, Greater China, Singapore and South Korea — are also important.

Source: AsianInvestor.net, 02.02.2010

Filed under: Asia, Australia, Banking, Brazil, China, Colombia, Hong Kong, Japan, Korea, Latin America, Malaysia, Mexico, News, Peru, Services, Singapore, Wealth Management, , , , , , , , , , , , ,

Actinver selects Misys BankFusion Universal Banking to support its aim to be the best financial services company in Mexico

Misys plc ( the global application software and services company, today announces that Actinver has chosen Misys BankFusion Universal Banking to underpin its expanding banking operations.

Actinver provides a wide range of services to corporate and institutional clients as well as retail customers. To help it to realise its strategic goals, the business was looking for the most technically advanced universal banking solution and a platform upon which to base all future growth.

The decision to choose Misys BankFusion Universal Banking was taken after a rigorous selection process, which led it to evaluate all major local and international suppliers. Misys was chosen for its revolutionary process-oriented approach to building banking applications. This approach will provide Actinver with the power to model business processes accurately within the solution, ensuring maximum flexibility and speed to market for new products and services.

“The agility that BankFusion Universal Banking brings to Actinver means we can focus on providing our customers with a unique service,” states Alvaro Madero Rivero, CEO Actinver. “We saw a brand new approach in the offering from Misys that we could not find anywhere else. This innovative solution will enable us to maximise the value we give our customers as our business grows over the coming years.”

Guy Warren, EVP and General Manager, comments, “Actinver has built a great reputation for providing its customers with innovative products and a rapid response to their needs. We believe that BankFusion Universal Banking stands out in the market as the only solution that can give it the control it needs to define and manage how the business operates without being constrained by the underlying technology.”

Key to Actinver’s decision was being able to meet the complex regulatory reporting requirements on a local and international level. Through its close collaboration with Soluciones Bajaware, Misys was able to ensure that BankFusion Universal Banking complies fully with Banxico and CNBV’s requirements.

Alvaro Madero Rivero adds, “In the current economic climate, the pressures on financial institutions from a number of different angles are unrelenting. With increasing regulation, more competition and an escalating pace of change in the industry, we are confident that Misys BankFusion Universal Banking will fulfill our business needs now and in the future.”

Source: Bobsguide, 26.01.2010

Filed under: Banking, Data Management, Mexico, Services, , , , ,

Brazil: Bank update-Loans to individuals improving – IXE/BANIF

The Central Bank published data on credit relating to September showing increases of 1.5% MoM and 16.9% YoY, a flat in relation to the August growth rate. Once again public banks showed the stronger growth rate increasing portfolio by 1.9%% MoM, while private banks’ loan portfolio increased by 1.5% MoM (an improvement to the 1.3% growth last month) and foreign banks showed a mere of 0.6% MoM expansion (also improving over Augusts’ 0.3% growth). Delinquency ratios, continued flat MoM at 4.4% of total loan portfolio with provisions down by 10 bps to 7.2% of total portfolio, from the adjusted 7.3% in the previous month. In September, delinquency ratios coming from individuals continued decreasing to 8.2% from 8.4% in August while the ones coming from corporate moved up to 4.0% from 3.9%. Private Banks decreased provisions, to 8.5% from 8.6% in August, while public banks decreased provisions from 6.1% to 5.9%.  The trend continues positive with individual delinquency ratios improving, but still causes some concern as delinquency ratios at corporate continued showing a small rise. The problem is that it is still unclear if corporate can renegotiate debts or if delinquencies will lead to shut downs and consequent layoffs, which would once again result in an increase in default levels coming from loans given to individuals. Brazil: Banks – Sector Update – 10282009

Breakdown

Loans to individuals increased 1.4% MoM and 17.1% YoY. Corporate loans showed a 1.2% increase MoM, with loans using domestic resources increasing by 2.8% MoM and those with external resources reducing by 8.0% MoM.

Amongst earmarked loans, the largest increase this month was in farming loans to coops (+11.1% MoM) followed by BNDES pass through (+3.8% MoM) and with BNDES direct loans dropping by 0.6%.

Loans for vehicle purchases increased 1.9% MoM, improvement to Augusts’ 1.3% growth. Leasing increased by 0.5% MoM in August, while direct financing was up 1.3% MoM.

Total credit increased its participation in GDP to 45.7% in September, from 45.2% in July, with GDP up by 0.65% MoM.

According to Central Bank data, the average spread charged by banks in September continued moving down, to 26.0% from 26.3% in August and is now lower than one year ago when it reached 26.4%. Loans to individuals had the largest decrease in spreads, down to 33.4% in August from 34.3% in August, while spreads on corporate loans were down another 10 bps to 17.7%, from 17.8% in August.

Default

Default levels were flat at end of September at 4.4%, still much higher than the 2.8% of the previous year. Public banks saw a decrease in default levels to 2.6% of loan portfolio reducing provisions flat to 5.9%. Private Banks decreased provisions for the first time in the last 12 months to 8.5% from 8.6% in August, even though default levels increased to 5.7%.

D-H classified loans decreased to 9.4% of total from 9.6% in August.

Conclusion

We believe that the larger banks are the bigger winners this month. This is because we saw most of the growth in vehicle financing and mortgages. Although some small banks operate in the vehicle segment, they do not operate in the mortgage market. However, in addition to not expect continued growth in vehicle financing, we believe that the share price of most banks capture the growths of September. Thus, our top pick remains Itau-Unibanco that will still show synergy gains.

Source: Banif – IXE, 28.10.2009

Filed under: Banking, Brazil, Latin America, News, Services, , , , , , , , ,

Banamex – Citigroup forced sales on the table of Mexican Court

Citigroup’s dismal financial state doesn’t grant its chief, Vikram Pandit, much leverage in negotiations these days.

He conceded defeat to Washington on Phibro, deciding that it was simpler to sell the profitable commodities trading unit rather than argue for keeping a risk-taking, capital intensive business that pays megabonuses. But Mr. Pandit has no reason to cave so easily if Citi’s ownership of the Mexican bank Banamex is threatened.

For now, that’s just a possibility. Mexico’s high court is set to decide this week whether to hear a case brought by a contingent of Mexican senators that Citi must offload Banamex because a foreign government owns more than 10 percent of its stock. They want the court to decide whether the finance ministry had the constitutional right to decree in March that the United States government’s 34 percent slice of Citi was acceptable because it was intended to be short term.

FiNETIK Note: The Banamex- Citi cases could also extend to other banks with foreign government holdings like AIG, Bank of America, Bank of New York Mellon, Royal Bank of Scotland. However the strong nationalist sentiments about Banamex do set it above the others.

So Citi is hardly up against a wall just yet — and it reckons any decision to force a sale would breach the North American Free Trade Agreement anyway. But if push comes to shove, the bank should be prepared to put up more of a fight than it did for Phibro.

For starters, Banamex is a full-service bank, not just a trading operation, so Citi has a stronger claim for keeping it. Second, it turns a pretty handy profit. It earned about $750 million in the first half of the year, about half of Citi’s profits from Latin America. As a whole, Citi lost money in the first six months of 2009, omitting one-time items.

And Banamex’s relative success as a retail, commercial and investment bank has turned it into a celebrity within the bank’s corridors of power. At last year’s investor day, Mr. Pandit held the Mexican unit up as an example for how the rest of Citi ought to look.

That makes it a powerful business worth holding on to. And Citi, in large part because of $45 billion in United States taxpayer aid, no longer has to sell profitable businesses just to bolster its balance sheet. Should decisions in Mexico start going against it, the bank has every reason to hunker down for a standoff.

An Alternative View

Just because Banamex is good for Citi doesn’t necessarily mean ownership by Citi is great for Banamex. The United States bank doesn’t help Banamex’s financing costs much, and non-United States ownership could help it attract previously reluctant customers.

Banks in emerging markets can benefit from foreign ownership through lower financing costs, access to an international network and the adoption of proven and trusted processes and technology. It’s not obvious how any of these apply to Banamex.

Its obligations receive no guarantee from the Citi parent company, and its access to financing could even suffer as a result of Citi’s troubles. Moreover, as the second largest bank in Mexico, it is big enough in its own right to get access to international services and acquire the staff and technology needed to be at least as up to date as Citi.

Mexico is a big enough market that its bigger banks are fully competitive, even internationally, without needing help from multinational groups as banks in smaller markets often do. The country is also intensely nationalist, particularly in relation to its neighbor to the north.

Hence, while an independent Banamex might see little difference in relationships with large and sophisticated Mexican companies, it could well benefit from having greater appeal to small businesses, consumers and, from time to time, the Mexican government.

There would be other advantages to Banamex from independence. As a stand-alone bank, it could decide its own strategic goals, organizational priorities and structure. That would most likely be an improvement on fitting in with Citi’s plans, which are currently heavily influenced by its recent losses and government bailouts. Its senior management would have more independence, which might help in attracting the best people.

A ruling forcing Citi to divest Banamex would be hugely disruptive for the bank, but it’s still a possibility. It is in Citi’s interest to object, and there’s a risk any new Banamex owner might not develop the franchise properly. Even so, for Banamex independence could offer attractions.

Source: New York Times, 19.10.2009

Filed under: Latin America, Mexico, News, Risk Management, Services, , , , , , , , , , ,

Taiwan Investors Gain Access To HKEx Derivatives Market’s H-Shares Index Products

Investors in Taiwan can now buy and sell the H-shares index (HHI) products traded in Hong Kong Exchanges and Clearing Limited’s (HKEx) derivatives market, which comprise HHI futures, HHI options and Mini HHI futures, following the Taiwan financial regulator’s decision to add the products to its list of overseas futures and options contracts with trading authorisation.  Before the admission of the HHI products, Hang Seng Index (HSI) futures, HSI options and Mini HSI futures were the only Hong Kong Futures Exchange products on the list.

HKEx recommends Futures Exchange Participants interested in possible business opportunities stemming from the regulatory change refer to the details posted on the Taiwan financial regulator’s website to ensure they comply with all the applicable rules and regulations.

“We welcome Taiwan investors’ participation in our markets,” said HKEx Chief Operating Officer Gerald Greiner. “We understand from market participants that there have been signs of increased Taiwan investor interest in our HHI products.

“We continue to see healthy demand for our HHI products and other products that form the China dimension of our market,” Mr Greiner said.

“Investors in many markets have access to our products so we will continue to promote them here in Hong Kong and overseas,” Mr Greiner added.

Source: Mondovisione, 06.10.2009

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Actinver Plans Mexican IPO in First Quarter, CEO Madero Says

Actinver SA, a Mexico City-based investment bank, plans to sell shares in an initial public offering in the first quarter, seeking to drum up underwriting business by setting a precedent for its clients to follow.

A sale would show companies needing capital that the equity market is a viable option in Mexico, where the last IPO was in June 2008, said Hector Madero, Actinver’s chief executive officer. He said Actinver is working with a “couple” companies that are considering share offerings.

“We want to provide access to mid-size companies, but the first statement has to be us,” Madero, 44, said in an interview in Mexico City. He said Actinver will sell shares to help open up the market even though it has no pressing need for the money.

A surge in kidnappings in Mexico is discouraging executives from taking their companies public, deepening an IPO drought sparked by the global credit crisis, Madero said. Mexico’s benchmark Bolsa stock index has climbed 32 percent this year, rebounding from a 24 percent slide in 2008.

Actinver, co-founded by Madero’s father in 1994, is “very close in a couple of deals” to underwrite IPOs, the CEO said. The firm co-led last month’s offering of 1.3 billion shares by Cemex SAB, the largest cement maker in the Americas.

The company is completing today the purchase of some of Prudential Financial Inc.’s Mexican assets. The Prudential units, which include a mutual fund business and a bank, bring Actinver’s assets to 109 billion pesos ($8.1 billion), according to Francisco Suarez, an equity strategist at the firm.

Banking License

Actinver acquired a banking license as part of the deal, allowing it to offer investment consulting services for individuals at a network of 70 offices around Mexico.

“We’re not going to be a bank that lends to institutions or corporations,” Madero said. “It’ll be a private bank with a retail business.”

The bank division will be headed by the CEO’s brother Alvaro Madero, currently the director of operations at Actinver.

In June Actinver launched a mutual fund with Brazil’s Itau Unibanco Holding SA in Mexico whose portfolio is mostly Brazilian stocks. Actinver is “very close” to a similar arrangement with a U.S. company, Madero said.

Mexico’s last initial share sale was Genomma Lab Internacional SAB’s $233.7 million offering in June 2008. There have been six IPOs in Mexico since the beginning of 2007, compared with 70 in Brazil, according to data compiled by Bloomberg.

Source: Bloomberg 06.10.2009

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