25 October 2016
Societe Generale is making an effort to localize its strategies in Asian markets. Photo: Internet
Societe Generale is making an effort to localize its strategies in Asian markets. Photo: Internet

Tapping Asian wealth means going local for foreign banks

Global investment banks will find it more costly to unlock wealth in Asia as regulatory changes make accessing domestic markets tougher, Bloomberg reported Monday, citing management consultancy Oliver Wyman.

Taiwan’s Financial Supervisory Commission fined the local units of BNP Paribas SA and Deutsche Bank AG last month for letting unauthorized foreign staff provide financial services to onshore clients.

Societe Generale SA said last week it has reorganized so that in Asia, commercial strategies are determined locally rather than regionally by product.

Asia remains a “challenge for many global investment banks as revenue pools shift onshore and the cost of accessing them increases”, the report quoted Christian Edelmann, the London-based head of Oliver Wyman’s global corporate & institutional banking practice, as saying.

“Global banks need to increasingly comply with local capital, liquidity and other regulatory requirements, making them typically focus on a smaller set of markets.”

The need for a local presence will force banks to be more selective and cost-conscious when assessing markets, Paul McSheaffrey, head of KPMG China’s Hong Kong banking unit, was quoted as saying.

But that doesn’t mean regional banking centers like Hong Kong and Singapore can be replaced, he said.

For Societe Generale, which counts structured products and derivatives among its key growth drivers, the focus in Asia will be about reinforcing a local presence in the bank’s core markets, such as Japan, South Korea, Singapore and greater China, the report quoted Yann Garnier, its deputy head of global markets for the Asia-Pacific region, as saying.

The French bank announced last week the appointment of five new heads of sales for its global markets division in Asia.

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