Asian banks reinvent treasury

Shareholder value and customer demand is driving the trend, said panellists speaking at the 22nd ACI Asia Pacific Congress on November 1. "At the end of the day, it’s client, client, client," said David Wong, head of Global Financial Markets Asia at ABN Amro in Singapore.

Although the products banks offer their clients have not changed, they are offering more diversity and sophistication, said Anita Fung head of trading, Asia-Pacific, at HSBC in Hong Kong. Specifically, she pointed to more hybrid and structured products, and more tailored solutions for clients. Frank Wong, senior managing director at Development Bank of Singapore, said change must come to drive local players’ return on equity, which is lagging that of international banks.

For Citigroup, one driver of change has been a shift in the reason clients in Asia are trading. Paco Ybarra, the bank’s Asia-Pacific sales and trading head, reported that investor business has become much more important for the bank, in comparison to largely "transactional" customer business in the region 10 years ago.

And technology, specifically, the internet, is a part of the reinvention process, in transforming how treasury customers are trading, said panellists.

Fung said the reinvention is also a structural change. Asian banks are moving away from a model of separate treasury centres, towards a hub and spoke set-up, whereby a central regional ‘hub’ branch -- for example in Hong Kong -- manages ‘spoke’ markets such as Korea. The benefit of that development, said Fung, is that there is more co-ordination of business strategies.

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