Commentary

The Islamic banking sector is one of the fastest growing segments in global banking, growing at an estimated 15-20% p.a.

Over the last few months, investors have frequently expressed to me their concerns about the change of leadership in Beijing likely to take place in the autumn of this year and what that might mean for the pace of reform in China’s economy and markets.

IBS has recently come out with its Sales League Tables for the year ended December 2011. The analysis has shown that IT vendors concentrating on the APAC market have moved up significantly.

Although asset management is considered the most consistently profitable business in financial services, there has been extreme volatility in the degree to which individual firms capture profits.

With the outlook of slow growth in the coming years, banks across Asia need to aim for significant structural changes to their cost base. This can be a challenge, however there are lessons from the experiences of other industries such as the European postal industry for example.

It was a financial services seminar with the agenda focused on recognising the triggers for the current financial environment. On the aside were two senior bankers who were not too comfortable that the previous session speaker tried to impress that banks were not having an adequate governance process inspite of the existence of an appropriate risk and compliance management system.

The Financial Times and other media outlets reported yesterday that the Chinese authorities plan to “instruct” banks to roll over their credits to local governments. If confirmed, such a move would both ease the debt burden on local governments and prevent a possible wave of defaults on bank balance sheets as these loans come due over the next 1-3 years (banks have been forbidden from rolling over or extending new loans to local governments). The policy would not be a complete surprise, as the CBRC hinted last October that a move of this kind was under consideration. According to such reports, banks may extend the maturity of their loans by up to four years. We estimate that outstanding local government debt amounts to RMB 14.7 trillion, of which one-fifth may come due this year (based on figures reported by the National Accounting Office), and the remainder through 2014.

Across Asia, investment fund transaction processing methods and distribution models differ markedly. The reason is that domestic investment fund markets have matured according to individual market needs.

The unfolding scandal in Tokyo involving pension investment management firm AIJ Investment Advisors Co. is depressingly predictable.

BKPM (Indonesia Investment Coordination Board) expects foreign investments to grow to USD 19,2 billion in 2012 from USD 18,7 billion.

The banking community of the Asia Pacific region continues to impress with its commitment to the branch.

Every time a new way of paying for something has arrived – credit and debit cards, internet payments, contactless cards, mobile phone payments – the imminent death of cash has been announced. It sounds a reasonable prediction to make given the convenience of these new methods.

With the dark clouds of a recession looming on the horizon, conservation measures will be the default procedure by Asian companies for the next 12 months.

As Asia emerges as the world’s largest wealth region, the one question foremost on the minds of all private bankers should be this: what does a typical Asian client look like?

Not too many people enjoy seeing volatile investment markets. It seems to set a mood of doom and gloom. As red numbers continue to be displayed on investment market information screens or headlined in the media, some people just get downright depressed. But it is not necessarily all doom and gloom.

Beyond the noise generated by the European sovereign debt crisis and the seemingly unending debate about reducing the U.S. federal fiscal deficit, we believe macroeconomic fundamentals are evolving just as they might be expected to in the wake of the financial crisis of 2008-2009.