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Talent spotting is a vital job
Banks that fail to spot new talent have a poor future ahead of them. The root cause of many a corporate crisis can be traced back to a very bad management promotion leaving the person who was best qualified for the job to depart to a rival institution.
Banks can reach out to the poor
Banks are beginning to realise that financial services for poor people can be commercially viable. The Year of Microfinance is an opportunity for them to play a greater role in alleviating poverty.
Can Europeans rise to heights of US giants?
European banks must act soon if they want to prevent the rapidly growing US giants from muscling in on their turf.
Inauguration day rhetoric is fine but the deficits must be addressed
As US president George W Bush starts his second term, will his administration engage with the rest of the world – economically and militarily – or will it be business as usual at the White House?
Islamic bond interest unites investors across the globe
The popularity of Islamic bonds signals the opening up of a new banking market. Issuance last year hit $6.7bn but challenges remain to development.
New hopes for debt crisis avoidance
Alonso García Tamés examines the evolution and application of the Principles of Emerging Market Debt.
Microfinance joins the mainstream
In the International Year of Microcredit, the UNDP’s Mark Malloch Brown encourages more commercial banks to take up microfinance.
Microfinance is helping to transform the lives of millions of people, helping to build businesses, create jobs and lift men, women and children out of poverty.
KBC reverse takeover will keep it simple
Belgium’s KBC will buy its shareholder Almanij in an operation that will almost double its free float and simplify its current structure. The new KBC Group NV will increase the number of shares in the Euronext stock market and will have a simpler holding and operational structure.
Qatar financial centre to focus on partnerships
Qatar, the world’s fastest-growing economy, has announced plans to establish a new financial centre based on a different model to other regional financial centres in neighbouring Bahrain and Dubai.
Emerging market leaders see rise in capital flows
Private capital flows to the 29 most prominent emerging markets expanded significantly in 2004, rising by almost one-third to an estimated $279bn, more than double the figure for 2002.
US lines up prospective candidates for next president of World Bank
President George W Bush is expected to focus on economic policies during his second term – inaugurated on January 20 – compared with his first administration, in order to achieve his government’s ambitious Social Security and US tax reform plans. To this end, Mr Bush also needs to fill several top-level, economic policymaking positions.
presenting the RISING STARS OF BANKING
Choosing the rising stars of banking has been one of the most difficult tasks The Banker has set itself in many a year. The number of outstanding candidates, chosen by our committee and our network of worldwide correspondents, was overwhelming. We have no doubt, though, that we have chosen some of the best and brightest, who will make their mark on the international stage as they become chief executive officers of banks in many countries. A few interesting themes were thrown up once the list was completed. First was the number of women on it: four out of 18. The glass ceiling looks like being broken – although it is worth noting that two of those have the benefit of family connections. Second, and associated with the first, is the number of family-influenced banks that are still of global relevance. And third is the fact that country size – as evidenced by Switzerland and Greece – was not that important.
Laércio Albino Cezar
vice-president of technology, Bradesco
In a country whose banking system has become among the most automated in the world, Laércio Albino Cezar – vice-president of technology for Bradesco, Brazil’s number one private bank – has become for many the face of that innovation.
Martin Blessing
board member, Commerzbank
If ever someone was destined to become chief executive of one of Germany’s top banks, arguably it would be Martin Blessing, board member at Commerzbank.His grandfather Karl was president of the legendary Bundesbank between 1958 and 1969, and his father Werner was a board member at Deutsche Bank.
Lloyd Blankfein
president and chief operating officer, Goldman Sachs
Lloyd Blankfein was appointed to his current position in December 2003. However, he did not hone his skills in the rarified atmosphere of an investment bank but at J Aron, a commodities trading firm acquired by Goldman in 1982.
Ana Patricia Botín
chairwoman, Banesto
Ana Patricia Botín has banker blood in her veins: stretching back to her great-grandfather, who became chairman of Banco Santander in 1909, to her father, Emilio Botín, a legend in his own lifetime whose latest coup – the purchase of Abbey National in the UK by Santander Central Hispano – is transforming the bank.
Piotr Kaminski
board member, PKO BP
If Piotr Kaminski’s previous stints at Poland’s securities watchdog (KPWiG) and the Warsaw Stock Exchange (WSE) are anything to go by, the 36-year-old board member of Poland’s mammoth savings bank, PKO BP, is a clear favourite to succeed close colleague Andrzej Podsiadlo as the bank’s next chief executive.
Chanda Kochhar
executive director, ICICI Bank
When Chanda Kochhar was picked four years ago to spearhead the thrust into retail banking at ICICI Bank – India’s second largest bank – sceptics doubted her ability to play hardball in a tough business. Ms Kochhar, 43, proved them wrong.
Sallie Krawcheck
CFO & head of strategy, Citigroup
In an age of scandal, Sallie Krawcheck is the queen of clean. The 40-year-old former CEO of independent research firm Sanford C Bernstein (dubbed the “last honest analyst” by Fortune) is now at the centre of the Shakespearean drama that is the succession to the largest financial services company in the world.
Adrian Li
general manager and head of corporate lending, Bank of East Asia
If Adrian Li, 31, succeeds his father David Li as head of the Bank of East Asia, as widely expected, it would be another milestone for the Li family, which founded the bank in 1918 in Hong Kong.
Ma Weihua
governor, China Merchants Bank
Chinese bankers are often low-key state-employed bureaucrats whose names are rarely known outside the industry. One exception is Ma Weihua, president of the small but highly regarded China Merchants Bank (CMB).
Alvaro de Molina
president, global corporate & investment banking, Bank of America
Cuban immigrant Al de Molina has done an impressive job as treasurer of Bank of America (BofA). “In a difficult interest rate environment, he adroitly managed the ups and downs, with the treasury business ending up being an important contributor to the bottom line,” says Joe Morford, an analyst at RBC Capital Markets.
Suzan Sabanci Diner
board member and managing director, Akbank
Suzan Sabanci Diner is due to take over from her father, banking legend Erol Sabanci, as the current chairman of Akbank. Winner of The Banker’s 2004 Bank of the Year award for Turkey, Akbank is the second largest bank in Turkey, 40% owned by the Sabanci group – the largest financial-industrial conglomerate in the country, and has the highest return on assets.
Agis Leopoulos
general manager, international activities, National Bank of Greece
As the youngest general manager at National Bank of Greece (NBG) – the country’s biggest banking group – Agis Leopoulos, head of international activities, had to prove he deserved a place on the team.
Dato’ Nazir Razak
CEO, CIMB
Malaysia is in the process of drastically reducing the number of its banks, leaving more people with recent or current CEO experience than there are banks.
David Roberts
chief executive, Barclays International Retail & Commercial Banking
When he is not reading bed-time stories to his six children, David Roberts is on the road and in the air, rallying Barclays’ troops in the UK and abroad. On occasion he can even be found at his desk in the bank’s City of London HQ. Mr Roberts, 42, took his current job in January 2005.
Marcel Rohner
chairman and CEO, wealth management and business banking, UBS
“Meteoric rise” would be an appropriate phrase to describe Marcel Rohner’s ascent to the group executive board of Swiss giant UBS. At 40, the demure Swiss economist appears the type of Swiss banker that people would not hesitate to entrust with the family fortune.
Andrey Suchkov
vice-president, Vneshtorgbank
Andrey Suchkov is the head of Vneshtorgbank’s mortgage and consumer credit division and has a good claim to the title “father of Russian mortgages”.
Mortgages have just come of age in Russia and the business of lending money to people to buy their own home is expected to grow from the current $1bn to somewhere over $100bn by the end of the decade.
Sim Tshabalala
managing director, Standard Bank Africa
Sim Tshabalala, currently head of Standard Bank’s extensive African operations and deputy head of its retail business in South Africa, is a leading contender to be the first black CEO of a South African bank as the banking world is being rocked by black economic empowerment through its voluntary empowerment charter.
Rebeca Vargas
vice-president, director of Hispanic markets, Citigroup
A quick glance at Rebeca Vargas’s curriculum vitae makes it is easy to see why she is a banker to watch. The self-effacing 33-year-old – one of Citigroup’s youngest high-level executives – holds degrees from good US and Mexican universities and boasts years of banking experience in both countries. At Citigroup, she is the director of Hispanic markets – no small job considering that she oversees strategies to capture the increasingly competitive US Hispanic market.
Deals of the Year
2004 was not an easy year for investment bankers, with interest rate cycles beginning to tighten, middling global growth and numerous uncertainties lurking over markets. The Banker’s Deals of the Year 2005 is the pick of the best deals executed in calendar year 2004 in 48 countries around the world (Egypt and Qatar were excluded for lack of qualifying deals).
The choice is based on the judges’ selection from those submitted for consideration.
Andrew Pisker
Dresdner Kleinwort Wasserstein CEO Andrew Pisker explains to Geraldine Lambe how his strategy for remodelling the investment bank has paid off and why there will always be room in the global market for good mid-sized European businesses.
Banks open their doors on to the world of Islamic finance
Usman Ahmed: ‘A secondary market is still significantly lacking’
Islamic bond issuance is growing from an investor-driven market into one which is issuer-driven and there are strong signs that it is becoming more that just a niche market, says Edward Russell-Walling.
This year’s first sukuk, or Islamic bond, has already come to market – a $600m five-year sovereign issue from Pakistan. It will not be the last. As 2005 got under way, various London bankers and lawyers were beavering away on at least three other international Islamic deals.
As safe as houses
Robert Plehn, HBOS head of securitisation
Edward Russell-Walling examines the move by HBOS to create a social housing covered bond and its attractiveness to European investors.Any half-decent treasury textbook warns of the need for diversification of funding sources. Few advise the creation of a new asset class, although that has not discouraged HBOS. Last December, the bank carved out new territory in the sterling debt market with a £3bn programme of covered bonds secured on loans to housing associations. Enter stage left the “social housing covered bond”, a hitherto unknown species of debt.
Complex operation leaves insurer in rude health
HSBC’s financial institutions group team, from left: Simon Woods, Nick Medd, Jens Rasmussen, Nicola Busbridge and Caroline Smith
HSBC financial institutions group’s capital-raising transaction for health insurer Bupa was complicated – but that did not faze the team in its efforts to coax bondholders out of old stock and into the new, writes Edward Russell-Walling.
Regulators move in, innovators move out
Regulation, regulation, regulation. Following corporate scandals in the US and mis-selling cases in the UK financial sector, bankers are so loaded down with rule books they can hardly move.
Investors glaze over at plethora of rules
Just as worryingly, regulators cannot insist that investors in the highly regulated markets actually read an investment prospectus. In the booming credit market, where the search for yield has been the driver of massive innovation, bankers report that investors have stopped reading the fine print and only stare at the coupon.
It has to end in tears.
Depressing data about the deficit
Fuelling global concerns about the US current account deficit (and current account deficits in general), Lehman Brothers has come up with some startling observations. It says the recent fiscal expansion across Organization of Economic Cooperation and Development countries is the largest in 30 years. The US and the UK are the main drivers but the euro area and Asia are also in deficit and work done in the 1990s to balance the books has been completely undone.
What is more worrying is that the current account is normally in balance at the start of a recovery but this time the US deficit was 5% of GDP at the outset. It’s difficult to imagine that these excesses can all be reined in, in an orderly and non-disruptive fashion, with the dollar doing all the work and the government doing nothing.
Hedge funds happy at distressed debt
Whatever economic crisis our beloved policymakers cook up, you can be sure there will be some business at the end for distressed debt buyers.
Trend setters bag repo rewards
Rajen Shah, senior vice-president and head of securities collateral management, JPMorgan Investor Services
Banks could profit from the burgeoning repo market if their collateral management is sophisticated enough, yet few have attempted to integrate this function. Natasha de Teran reports.
With the increasing focus on risk-reduction and the imminent arrival of Basel II, the fast-growing repo market – in which the seller of securities agrees to buy them back at a specified time and price – is likely rise to prominence and expand beyond recognition.
Banks that are already at the forefront of secured lending will profit from this growth but, as more assets are added into the acceptable collateral pool, sophisticated collateral management capabilities will become imperative.
Banks fill up on bite-sized margins
Andrew England, global head of product management, global cash management at Deutsche Bank
Banks are tackling the payments market in a new way, driven by smaller margins and increasing volume. Dan Barnes looks at the techniques that they are using to achieve their goals.
Increasingly higher volumes and dropping margins in the payments arena – driven hard by the demands of well managed and monitored corporate clients – are causing banks to address their future potential in the market. For some, the mathematics will not work out favourably.
Potential solutions that are available to banks that wish to stay in the cash business include investment in technologies – to cut costs or offer higher returns through improved service – and partnering with industry competitors to combine their strengths and skills.
Vibrant innovations
Harmut Bechtold: ‘We spent months clearing all the legal and tax barriers’
In 2004, Germany saw its first ‘true sale’ securitisation, the birth of a non-performing loan market and the founding of a new exchange, reports Jan Wagner.
Last year was another difficult one for German banks. Contrary to expectations, equity markets did not perform particularly well and neither did the economy. Despite this, German banks will probably regard 2004 as one of their better years as the financial industry matured greatly, thanks to several important innovations. As 2004 began, Germany’s hedge fund industry was born when the direct sale and domiciling of these products in the country was permitted for the first time.
New government makes ambitious reform plan
Bank privatisations and stock market listings are on the new government’s financial reform programme as it strengthens its bid for EU accession. Matei Paun reports from Bucharest.
Tsunami fails to dent optimistic outlook
Simon Montlake reports from Bangkok on the pre-election mood and discovers that the tsunami disaster has not dented Thai bankers’ confidence.
Clear sense of direction
Pakistan’s banks have been facing up to privatisation and anti-money laundering measures and there are more challenges ahead. Farhan Bokhari reports from Karachi.
Political uncertainty mars bright economy
The economy is thriving and banks’ performances reflect this, but president Chen Shui-bian faces political difficulties in promoting the next phase of financial reform, writes Dennis Engbarth in Taipei.
Bid for investment grade
There are encouraging signs that the turnaround in the Brazilian economy is based on more sturdy underlyings than past upturns, but will it fuel enough growth to achieve an investment grade sovereign rating? Brian Caplen reports.
Euro-Med pact drives reforms
Merger moves in Morocco and the promise of privatisation in Algeria give hope for a more vibrant banking sector in the Maghreb region, writes Jon Marks.
Microfinance gains momentum
Evidence is accumulating to show that microcredit can be a profitable business for commercial banks. Stephen Timewell reports on progress in the International Year of Microfinance.
Strength in centralisation
BNP Paribas CIO Hervé Gouëzel tells Dan Barnes how he is working towards a strong centralised IT operations function, using partnership and outsourcing where necessary.
Hervé Gouëzel, chief information officer and executive committee member at BNP Paribas, is striving to strike a balance: “There are three [IT] models. The first is the very centralised model, highly organised and with a global strategy. In the second model, there are these local baronies (fiefdoms) with everything decentralised. Between these two levels is the BNP Paribas model.”
CRM maintenance yields leading edge
Graham Flower, head of customer relationship management at HSBC
Regulatory requirements have put banks in a prime position to benefit from customer relationship management systems. However, there is more to CRM than technology, says Dan Barnes.
Customer relationship management (CRM) could be the light at the end of the tunnel for banks looking for returns on regulatory-driven technology investments. Those banks that have invested strategically in their data infrastructure for compliance purposes now have the opportunity to leverage their stock of well stored and cleaned data to achieve additional benefits on their substantial investments.
Close the redundant branches
Last year, there was a lot of talk about branch renewal but what does branch renewal mean? For many, it means new logos and brochures, softer and more attractive lighting, new uniforms and systems that work at internet speed. But that is not what branch renewal is all about. Logos, labels and linkages are superficial and do not make a branch profitable.
