Year: 2011

FTM wins Best Fixed Income Fund

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 Most major market indices have, at best, gone sideways for the past decade. In fact since 1998 investors really haven’t stood a chance. There was the Russian bond default in 1998, tech wreck in 1999, at least two recessions, subprime mortgage mess in the US and, of course, the global financial crisis, which clearly illustrated that asset classes were far more correlated than most investors had otherwise suspected. In reality, the more uncertain things became the more correlated asset classes became.

After the dramatic falls in global markets, it was clear that traditional asset classes such as equities could not be counted on for diversification simply by means of geographical location. Mainstream markets and emerging markets alike experienced large falls as did commodities and bonds.

Strangely, this period also coincided with highs in many markets so, by rights, investors should have made money. Unfortunately, the reality is that burying your money in the back yard, or holding cash in the bank would have out performed most markets and investment strategies.

Even now, three years on from the crisis, we have sovereign debt issues in Europe, where they believe that throwing money at a problem like Greece, while imposing draconian austerity measures, is somehow going to end well.

The truth is, there has never been a more dangerous time to be an investor and if you rely on a rising market for your financial future then you are in serious trouble.

So what we did was create something that has provided safety and a remarkable return.

At FTM, we looked at all these uncertain market conditions and created an investment that would have been able to profit in all of these situations and, in fact going back as far as 1997, the investments that underpin FTM never ever had a negative year. Actually, this strategy would have resulted in a gain of over 468 percent during some of the most uncertain economic times in living memory.

Launched in March 2010 and based on a measurable investment strategy going back to 1997 FTM enables investors to target a return of 12 percent a year, while keeping 90 percent of the portfolio secured and keeping risk to a maximum of 3.5 percent of the overall portfolio.

The secret to FTM’s success is the use of Medical Accounts receivables, which make up 75 percent – 85 percent of the portfolio and are secured at a rate of $3 for every $1 invested.

Basically, the Medical Accounts Receivables company works like an insurance company.  For example, if there is a car accident where someone is hurt and either they or the other party has insurance, then (assuming a strict set of guidelines and due diligence has been met) the receivables company funds the operation and any subsequent expenses. They then take a lien against a portion of the payout from the actual insurance policy and are paid out upon settlement of the claim.

The thing to understand is that these operations would have taken place with or without the intervention of the receivables company. It’s just that by providing the funding the operation happens sooner and the injured party can resume a normal life much faster. The hospitals also provide the surgery at a discount, because they get paid sooner instead of having to wait for the settlement of the claim.

However, unlike factoring, where a company buys a pool of debt and simply hopes enough will be good to enable a profit to be made, in our case, the Medical Accounts Receivables Company pick and choose the cases they wish to fund and, on average, three out of every four cases reviewed are rejected, as investor safety is paramount.

Furthermore, exposure to each individual insurance company is limited to 10 percent so that in the event of bankruptcy investors remain protected, as over half of the insurance companies could fold and still enable FTM to receive their principal back.

The risks surrounding insurance companies tends to be misunderstood because in the event of a massive bear market it would ravage the balance sheet of the insurance company, as their liabilities would be unchanged but their assets substantially lower. But in general, insurance companies have liabilities that are years or decades in the future.

The remainder of the portfolio is split with five percent – 15 percent held in cash and a maximum of 10 percent in FX trading, set with a maximum stop loss of 35 percent. In this way, FTM has created a portfolio that is perfect for retail, institutional investors or pension funds alike, while knowing in advance that the maximum downside is 3.5 percent of the total portfolio and the upside is far better than the long term average of most markets, with far less volatility.

I know it’s easy to assume that FTM only works because it’s in a lax jurisdiction, or cuts corners, but nothing could be further from the truth. FTM utilises an administration company to calculate the NAV values each month, then every quarter these figures are given to an independent accounting firm for verification and, of course, FTM is audited annually.

But if that isn’t enough, I wanted to say a few words about Vanuatu and the strict laws and guidelines its financial services industry operates under.

Introducing Vanuatu
Located in the South Pacific, Vanuatu is a hidden jewel, a prominent international finance centre wrapped around a relaxed friendly atmosphere, what many would call “paradise” and ranked as the happiest place on earth in 2006 and again in 2010 in the Happy Planet Index.

Vanuatu is a member of the British Commonwealth and has a legal system based upon British Common law. Vanuatu is also on the OECD’s white list of countries and is a member of the French League of Nations, the United Nations, The Secretariat to the Pacific Community, the World Bank, the Asian Development Bank and the Melanesian Spear Head Group.

Vanuatu’s financial service industry is regulated by the Vanuatu Financial Services Commission (VFSC) whose mission is to effectively and efficiently regulate and supervise Vanuatu’s finance industry in accordance with government legislation and international standards so that Vanuatu is recognised as having an internationally reputable and commercially attractive finance centre.

The VFSC is responsible for the regulation of Mutual Funds, Securities Dealers, Public and Private Companies, International Companies, Offshore Limited Partnerships, Registration of Patents, Registration of Trade Marks, Unit Trusts, Trust Companies and a range of other services.

The VFSC was formally established in 1993 and, although only 18 years old, it prides itself on being proactive, continuously looking to strengthen its regulatory regime and taking the lead from jurisdictions with the best regulations in their particular fields, while updating and changing outdated and outmoded regulations that no longer work.

In this respect, the VFSC is similar in nature to the SEC in the US or FSA in the UK or even ASIC in Australia. However, the major difference is that, because of their relative youth, the VFSC operates in a more streamlined manner, as it does not have decades of outdated laws to contend with. Vanuatu is compliant with world standard best practices and has passed inspection by the IMF and FATF to name a few. In fact, is it easier to open a bank account in most western jurisdictions than it is in Vanuatu.

The VFSC prides itself on adopting best practices within the financial service industry, with its new companies act based on New Zealand legislation, the service providers act based on Isle of Man legislation and the International Companies act based on the British Virgin Islands.

Vanuatu remains a great place to live and conduct business in, while its financial services industry offers far more competitive prices than other jurisdictions that provide similar services.

Vanuatu is not only paradise for the eyes, but businesses also find it to be paradise, as there are no income taxes or direct taxes levied.

So, now that you know that FTM can generate returns irrespective of market conditions and direction and that it operates with strict oversight and regulatory supervision. You owe it to yourself, your family and your future to take a closer look at FTM.

Endre Dobozy is Managing Director of FTM, a licensed securities dealer and master certified member of the H.S Dent Advisors network. For more information www.ftmmutual.com

WTS Group outlines consulting ‘pillars’

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WTS is an international group of consulting companies operating in the areas of tax consulting and business consulting. The core of WTS’ work includes tax and legal advice to multinational groups, national and international SMEs and private individuals. The range of services has recently been significantly extended in the areas of investment tax law, M&A, private clients and non-profit organisations. In business consulting, WTS specialises in particular in financial advisory as well as national and international accounting services. With more than 400 employees in seven German offices, the group of WTS professional companies is one of the largest international tax consulting practices in Germany. The group is represented in more than 90 countries through WTS Alliance. WTS exclusively focuses on consultancy services to avoid any potential conflicts with auditing activities. Members of the board of directors at WTS Group are Fritz Esterer and Prof Dr Alexander Hemmelrath.

The company’s success rests on its main pillars: tax and business consulting with a total of twelve areas of competence.

Tax consulting
WTS offers legal and tax consulting services with both general tax experts and specialists in specific areas of taxation. Its consultants are comprised of tax advisers, tax representatives and lawyers. Due to its worldwide network, WTS is able to offer its clients expertise around the globe. Tax consulting includes expert advice in the following disciplines:

– Corporate Tax Advisory
– Integrated Tax Services
– Transactions
– Asset Management and Financial Services
– Real Estate Taxes
– Supply Chain Strategy
– Governance and Compliance Advisory
– Private Clients and HR Tax Services

Business consulting
Business consulting operates under the brand name Fortesse Consulting and is responsible for the fields:

– Financial Advisory
– Restructuring and Turnaround
– Process and Risk Management
– Accounting Services

Within the WTS Group, Fortesse Consulting offers CFO-close business consulting. The range of services includes both, comprehensive project consulting as well as the acquisition of commercial services in the context of business operations. These include in particular the advice on accounting, compliance and risk management, as well as restructuring. The implementation-orientated advice is based on in-depth business knowledge combined with years of practical experience. This guarantees the provision of high quality and proactive advice to international companies, medium-sized private and public companies and financial investors.

Around the globe through WTS Alliance
WTS Alliance is a global network of selected tax consulting firms and is represented by its partners in more than 90 countries. Since its foundation in 2003, WTS Alliance is regarded as a trendsetter in cross-border tax cooperation. WTS Alliance’s activities are coordinated by German-based WTS Steuerberatungsgesellschaft mbH. For the admission of new members WTS Alliance has imposed strict selection criteria. In 2010 the members improved their uniform market presence by founding the WTS Alliance Association.

Private clients
Advice to individuals on personal-legal and tax issues requires a trustworthy tax and legal advisor, who understands the unique situation and acts proactively. To the circle of our national and international private clients we count not only wealthy families or individuals, but also managers and CEOs of large corporations.

Among other issues, the work revolves around tax optimisation of domestic and international investments, business succession or charitable activities. Private client advisory provides a comprehensive approach. Apart from preparing income tax statements, support is offered in cases of cross boarder relocation, fiscal change of status and tax audits, issues on residency and double taxation. Tax advice is also rendered on share-based payment instruments (stock options, phantom stocks, stock awards, etc.), deferred compensation and pension plans, respectively.

To family-run companies frictionless succession arrangements are crucial for securing the continuity of the company. Prof Dr Hemmelrath and his team develop concepts for suitable company and wealth succession, create and customise prenuptial agreements, contracts of inheritance, articles of association as well as wills. They also provide advice in the fields of inheritance tax law, gift tax law as well as valuation law for national and international constellations along with the preparation of inheritance tax and gift tax declarations.

Non-profit organisations such as foundations, associations and charitable limited liability companies are provided with formation advice by Prof Dr Hemmelrath and his team, including the assistance during the entire formation process such as the generation of statutes and articles of association and the processing of non-profit status issues.

Tax declarations are prepared, assistance at audits is offered and compliance processes are implemented. All business transactions and accounting services are carried out in cooperation with Fortesse Consulting.

Tax services for HR departments
WTS’ international and national network of experts renders advice to companies as well as expatriate employees.

Global expatriate services encompass all aspects of delegation of employees in tax, labour and social law issues relating to cross-border delegations and the preparation of domestic and international income tax returns.

Another important aspect of HR tax services is wage tax advice. Payroll tax for employees is paid by the employer directly to the state. Changes in income tax law inevitably have financial and administrative consequences for the company. The legal regulations in the field of income tax are not only subject to constant change, but may also seem to be getting increasingly confusing. This causes a high risk for companies as they might pay too little income tax, for instance due to wrongful lump sum consolidation. Wage tax audits can then result in substantial interest payments which will incriminate a company’s operating profit.

WTS emphasises a practical approach to consulting, developing creative, tailored and pragmatic solutions. This again is reflected by the integrative approach to consulting, in which both the interests of the company as employer and the employee are borne in mind. It is important to identify tax risks at an early stage to optimise wage tax payments and keep the administrative burdens to a minimum. WTS experts, being the clients’ permanent advisors, provide advice and support during projects such as income tax audits, in the conception of corporate policies (travel expenses, company cars, hospitality, corporate events, etc.), or by generating flexible systems of remuneration and working time models (occupational pensions, working time account models, etc.). The WTS team further renders expert reports on current legal issues and obtains appeal information from fiscal authorities.

The strategies for success
WTS’ integrative and tailored approach to consulting makes a definitive contribution towards reducing tax-related risks. Experienced generalists and high-calibre specialists from major companies, consulting firms and the tax administration make up the teams of WTS advisors. WTS employees guarantee the success of the client’s business. With excellent qualifications, they work enthusiastically and effectively at the highest professional level.

They are solution-focused with a high degree of personal responsibility. With decision-making as one of their key strengths, our employees are appreciated by clients as valuable business partners.

WTS consistently pursues its strategy to attain a leading market position in all important areas of tax and business consulting while also providing  its clients with access to a highly efficient worldwide network.

Prof Dr Alexander Hemmelrath is a board member of WTS Group

For more information tel: +49 (0) 89 28 646 0; Email: alexander.hemmelrath@wts.de; www.wts.de

Bank calls for a single European voice

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 With many considering the banking slide to have served it’s term and new regulations on the offing, several financial institutions have recognised this as the time to make profitable steps. Bank Austria has presented a strong and distinct message to the industry.

What does recognition as the “Best Banking Group – Austria 2011” mean to you?
Banks around the world lost massive amounts of trust during the global financial crisis. In this, people differentiated very little between investment and commercial banks. I see this distinction from World Finance as an important milestone on our path to winning back lost trust by coming even closer to our customers, offering higher service intensity, and offering simpler, real-life products. In other words: It is both confirmation and motivation for my team and me.

As part of UniCredit with its broadly diversified business model in terms of regions, product groups and customer groups, Bank Austria already proved to be very robust during the crisis and closed every quarter since the collapse of Lehman in 2008 with a profit. And unlike other Austrian competitors, we did not draw on any government assistance. In fact, we began utilising synergies early and were the driving force behind the consolidation of the Austrian banking market.

How was the first quarter of 2011 for Bank Austria?
We got off to a good start in 2011. The upward trend seen in the past few quarters continued in the first three months of the current year. It is particularly noteworthy that we have further improved our performance in commercial banking business with customers while the provisioning charge in Austria and in Central and Eastern Europe continued to decline. On the basis of these two factors, net operating profit increased by 38 percent, and net profit reached €341m. Although the economy is gaining momentum, especially in our CEE markets, we have not yet attained the pre-crisis level. We need to maintain stringent cost discipline and further improve our productivity in order to absorb the additional burdens resulting from the bank levies in Austria and Hungary and to meet the new capital requirements under Basel III.

What opportunities do your home markets offer for the future?
Austria is a mature, saturated bank market with more or less fixed customer shares. Bank Austria has a broad base as a universal bank and is the leader in many areas. For example, the University of St. Gallen named our retail business the “most customer-oriented service provider for 2011.” The European Customer Service Champions competition is based on concrete customer feedback, customer survey tools and complaint management as well as on service quality initiatives and innovative service models. In this connection, we recently introduced SmartBanking, a flexible package for the online generation – a customer group that completes most of its banking business over the internet and with smartphones and that does not want to be bound to branch business hours. I would also like to mention corporate banking, where we are the clear number one, and private banking, where we are the largest asset manager in Austria.

The key to growth in this market is customer satisfaction and absolute customer orientation. For this reason, we increased the number of special branches across Austria for serving small and medium-sized businesses with annual sales of up to €50m to approximately 60 over the past year.

And in Central and Eastern Europe?
There are still major opportunities in banking in CEE. On the one hand, the region is expected to grow at 4.4 percent this year and 4.0 percent in 2012, twice as fast as the eurozone. On the other, the convergence process in terms of prosperity and the use of financial services is far from complete. Take mortgage loans, for example: they only made up eight percent of the region’s GDP in 2010. In the eurozone, they make up 40 percent. There is also massive potential in corporate financing. It comes in at 26 percent of GDP in CEE but 52 percent of GDP in the eurozone. Taken together, all of these factors form a solid basis for continued growth in the banking sector in Central and Eastern Europe.

What risks are you confronted with right now?
Overall, our risk costs have fallen considerably compared to two years ago. Nevertheless, there is a great deal of uncertainty on the markets, especially because of the sovereign debt crisis. In this context, I am really disappointed to see how quickly our common Europe is cast aside time and again because of national interests.

We need more Europe, not less, to assert ourselves as one of the most potent economic areas in the world. It is time to act with solidarity and speak with a single voice. Speculative attacks against large economies in the eurozone are attacks against Europe.

What lessons have you drawn from the financial crisis?
It is no coincidence that Bank Austria and its parent company, UniCredit, have posted a profit every quarter since the eruption of the crisis. In fact, it is impressive evidence of how crisis-resistant our business model is, our model of a universal bank with broad diversification in terms of regions, customer groups and product groups. Other key factors are our conservative risk policy, strong deposit business and continuous efforts to improve our efficiency.

Nevertheless, the confidence crisis is also affecting our bank group. And we can’t fix this overnight with a slew of new high-gloss brochures. It will take hard work and absolute customer orientation.

What do you think of the coming new regulations, like Basel III?
The global financial crisis we just went through was precipitated by a number of factors. These include the blind trust investors placed in the little-regulated rating agencies, a jungle of shadow banks that is not monitored by the various supervisory authorities, insufficient liquidity at some banks, and the Fed’s policy of printing cheap money for many years.

Don’t get me wrong, I think that the new, stricter capital requirements are sensible, but they are not enough by themselves. The system will not be made more secure by highly regulating commercial banks like UniCredit Bank Austria, a traditional “bread-and-butter” bank with a high level of deposit-taking business, and letting the shadow bank system go about its business as usual. The business model and risk management system must also be taken into account here.

Lehman Brothers had a core capital ratio of 11 percent when it collapsed in 2008. What would have been a comfortable safety net for a customer-oriented commercial bank proved to be insufficient for one of the leading investment banks.

What strategy will the group pursue in the coming years?
As I said, Austria is a saturated bank market with a multitude of financial providers. This fierce competition makes it impossible for us to increase our margins at will. For this reason, we will continue focusing strongly on innovative offerings for new customer groups and on using the economies of scale provided by our membership in one of the leading European bank groups, UniCredit. For example increasing our productivity by combining IT activities.

We are striving to achieve organic growth in Central and Eastern Europe in the coming years. For example, we are planning to open around 900 new branches in selected markets such as Turkey, Romania, Hungary, Russia, Bulgaria and Serbia by 2015. The conditions are promising. All countries in the UniCredit bank network will post positive GDP growth for the first time in four years in 2011, and this should facilitate further recovery in the banking sector.

Are there business segments that your bank group wants to focus on in particular in this context?
We are currently completing a strategic assessment of all of our activities in CEE. In general, we want to maintain and expand our leading market position in the region. To this end, we will provide our subsidiary banks in Central and Eastern Europe with more capital for their customer business, focusing on the countries with higher growth rates. We want to grow selectively, organically and sustainably – quick, short-term profits are not part of our philosophy.

Willibald Cernko heads Bank Austria, UniCredit’s CEE sub-holding

‘Russia must address fundamentals’

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In a nutshell, the vision of the Russian government for future development of the national banking sector may be summarised as follows: Russian banks must become bigger and stronger. Having fought the liquidity crisis throughout 2009 and dealt with the fight’s consequences throughout 2010, in the coming several years, Russian banks will be addressing fundamental challenges. Last April, the government jointly with the Bank of Russia published the Banking Sector Development Strategy for 2011-2015. How will the strategy be implemented and how is the national banking sector expected to evolve in the coming five years?

To begin with, credit institutions will be required to hold at least RUB300m in equity capital. Secondly, banks will need to grow their assets, while stepping up loan issuance at the same time. At the beginning of 2011, total bank assets as percentage of GDP were 76 percent. Total capital of the Russian banks was 10.6 percent of GDP, while loans to retail customers and non-financial organisations stood at 40.8 percent. By 2016, however, bank assets are expected to reach 90 percent of GDP, while capital and loans should grow to 14 -15 percent and 55 -60 percent of GDP, respectively. Thirdly, and apart from capital growth, adequate coverage of the Russian banks’ risk exposure by capital is stated as another important condition for development of the banking sector and improvement of the banks’ stability.

In itself, the aim of the regulator to make the system as stable as possible is totally understandable and absolutely legitimate. However, results of the pursuit of the banks’ financial stability may turn out to be exactly the reverse. According to rating agency projections, the average capital adequacy ratio of the Russian banks may drop from 18.1 percent to 15 percent as early as in 2011. While Russia is seeking to implement Basel II and Basel III standards, a number of Russian standards are already tighter than those adopted in the Basel accords. At the same time, a requirement to further increase provisions may force banks to fold their customer programs, which they have just unfrozen after the crisis. This time, however, they would do so because of declining margins, which make their business unprofitable, and not due to financial problems.

As opposed to a state-owned bank, a private bank is above all a commercial entity, a business, even though it also unquestionably has a social function. The main objective of a private bank is profit generation. In other words, a banker is obliged to perform the constant balancing act between business profitability and, at the same time, its competitiveness. Of course, this is true not only for the banking community and not only for Russia but nowhere else is this line more pronounced than in our country. It is not surprising then that bankers were totally dumbfounded by the emergence of a draft law envisioning an unprecedentedly high risk ratio for provisioning in case of insufficient loan security. The proposed ratio would equal 1.5, while any mortgage contract with initial payment below 20 percent would be deemed as insufficiently secured. Fortunately, the initiative fell through. Only government-owned banks were not concerned about the potential change in provision requirements, as their shareholder would supply them with any necessary funding. Midsize and smaller banks however, especially regional banks, faced two alternatives: shut down or sell to a stronger nationwide player.

So, what needs to be done to ensure a smooth development of the banking sector? First and foremost, the government has to create conditions for fair competition among banks, and the first steps in this direction have already been made. The government announced a plan to privatise state-owned banks and reduce its shareholding in such banks to a blocking stake. And while remaining government participation will still leave state-owned banks in an advantageous position from the financial flexibility and maneuverability point of view, market relations are expected to become more balanced, while competition for the customer, despite its intensification, more understandable. However, this will not happen overnight: the process is expected to stretch at least until 2015.

Development strategy
It must be said though that banks are currently not folding their credit products but, to the contrary, are actively developing them. Credit quality of both potential retail and corporate customers has been progressively recovering, which marks the return to profitability of lending operations. PSB is no exception. We are resolved to increase our loan portfolio. 2010 results showed that we are on the right development path. PSB posted IFRS net profit of RUB2.5bn, of which RUB1.9bn was generated in the second half of the year. At the same time, our loan portfolio was up 19.5 percent, significantly outperforming the market with its 12.5 percent average growth. The strong results confirm a solid competitive position of our bank. We intend to pursue further growth of our portfolio in both retail and corporate segments, by offering our customers a fine-tuned business interaction process, high service quality, a broad range of products and services, as well as simplicity and convenience. Corporate business remains our key focal area and will continue to generate the bulk of PSB loan portfolio. In corporate business we intend to maintain our leadership in both lending to and funding from corporate customers. With approximately a 25 percent market share, PSB ranks first in the factoring market, and intends to maintain its leadership in the years to come. The same is valid for our market shares in international financing and standard credit products. In addition, we are aiming to build a stable and diversified (through stronger commission revenue) revenue base.

In the retail segment, lending activity will mainly be driven by general-purpose loans and credit cards, as envisioned in our 2011 development strategy. In addition, PSB resumed mortgage lending. Our target total 2011 retail loan portfolio is RUB50bn, while we are aiming to become a Top 10 bank in terms of retail lending volume by 2013. The share of retail business in the total PSB loan portfolio is expected to reach 25 percent by 2013.

Innovation
In today’s rapidly evolving high-tech world, ambitious goals may be achieved only through innovation. Introduction of the best and newest technologies is therefore one of the key strategic priorities at PSB. To this end, we have been developing a business process enabling us to identify, assess and introduce innovative products, services and technologies system-wide.

We also maintain our strategic goal for 2015, which remained unchanged even amid the global economic crisis. Our goal is to become Russia’s #1 privately owned bank. However, as opposed to several years ago, when we focused essentially on asset value as the key leadership criterion, we now rather target superior market value of our business, its capitalisation. Clearly, this would require a market valuation of PSB’s business. We receive many interesting proposals from potential investors and consider them thoroughly, taking into account attractiveness of both pricing and expertise, which new shareholders would be able to bring in. Our existing shareholders are open to negotiations on further diversification of PSB ownership structure, although such diversification is not a burning priority.

To conclude, I would like to say that we are optimistic about the future. A well though-out progressive strengthening of the Russian banks should eventually make the entire financial system stronger. PSB current market position is stable, as reflected in our actual results, with a positive development outlook. And our solid strategy creates all the necessary prerequisites for achieving our goals.

Nordea targets top European tier

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This year Nordea celebrates its 10th anniversary. Not that much for a bank perhaps, but Nordea is a result of approximately 300 mergers within the Nordic countries and the oldest bank is from the early 19th century.

Between 1997 and 2001, leading banks in each Nordic country merged to form Nordea – the Nordic idea. This means we have a unique platform compared to our peers. Not only are we by far the biggest bank in the region, we also have a natural “hedge” in our balance sheet and profit and loss accounts given our geographical diversification. As a result we have been able to deliver high and stable results all across the financial crisis, which has enabled us to invest in and upgrade our platform further.

Nordea has branch operations in nine markets, and with 11 million customers, 1,400 branches and an AA credit rating; Nordea has become a top 10 European retail bank and one of two Nordic companies on Forbes 100.

Besides leading positions in the four Nordic markets, Nordea has also built market leading positions in the three Baltic markets, a growing niche position in Poland and a profitable corporate bank in Russia.

Customer experience
Since 2007, Nordea has focused on its relationship strategy, with the aim to improve and get a lead relationship with its customers. We think that this is in the best interest for our customers, staff and for our owners and we also believe that our relationship strategy is designed to meet the New Normal challenges.

It enables a great customer experience with safe and stable long term relations, where we can offer a full range of advice and high efficiency in service. It also enables us to be efficient in capital and funding usage, as well as keep the risks at a minimum. This strategy has served as well so far and since 2007 we have done significant investments into our strategy and to upgrade our platform. In 2010 alone we invested around €200m.

Within the household segment we have increased the number of Gold customers (a customer with five products or more) by more than six percent per year, and we now have around three million customers in this segment. We have been able to achieve this growth of new Gold customer due to an improved branding and with a structured customer approach, where our 360 degree meeting is central. In these meetings, we go through the entire financial situation with the customer, and with a holistic advice approach we are able to identify and meet every financial need for the customers.  65 percent of the new Gold customers in 2010 were new to the bank. Since January 2010 we have increased the number of 360-degree meeting per advisor by 44 percent. We can clearly see a correlation between number of meetings and the increase in Gold customers. We also see an increased customer satisfaction within the Gold customer segment as well as a low risk and improved financials; a Gold customer generates more than five times higher revenues than a non-Gold customer, whilst the loan losses are negligible.

Within the corporate segment we have invested in several areas in order to strengthen the relationship such as corporate finance and equities, cash management systems and risk management products. Cash management is a typical entering product when a lead relationship with a corporate is established. Also in the corporate area we have made good progress and we now have a leading position in three out of four markets; in Denmark we have moved from the number two to the number one position, in Sweden we have moved from a number three position to a joint number one position, in Norwegian shipping and offshore industry and in Finland we have been the number one large corporate bank for a number of years. In Sweden we have increased the lead relationships from 31 percent to 43 percent of the large corporate between 2008 and 2010 according to the latest Greenwich study. Our strengthened relationships have also lead to an improved revenue profile; our non-interest income has grown significantly in the Corporate and Merchant Banking segment, from 47 percent till 53 percent between 2008 and 2010. In 2010, our loan book “only” grew by 3 percent while revenues grew by 25 percent. This means that we can offer our customers more capital-, funding- and liquidity light products which has a positive impact on our profitability.

Nordea’s financials have improved significantly due to our increased customer acknowledgement and relationships, our revenues have increased by almost 30 percent between 2006 and 2010. At the same time we have managed to maintain loan losses at a low level, so during this time period we have been able to report the highest and (evenly important) most stable Return on Equity amongst our Nordic peers. We have managed to grow our Risk-Adjusted Profit (with normalized loan losses and taxes) by almost 40 percent, and the target to double this profit 2006-2013 is still within reach.

As a consequence of the new regulatory environment after the financial crisis, our cost of “raw material” has increased significantly since 2007. Our Core Tier 1 ratio has increased from 7.5 to 11 percent, our liquidity buffer has increased from €23bn to €56bn and our average maturity of bonds have increased from 2.3 till 3.7 years. The trend across the sector is basically the same. This will put pressure on the Return on Equity for the entire sector and will increase the demands to deliver more efficient solutions for customers and increased operational efficiency in order to deliver competitive returns to shareholders.

We think we can improve our profitability even further: Our current Return on Equity is around 12 percent and we assess that the best banks in Europe can deliver a RoE of around 15 percent (with normalised loan losses of 25bps). We are committed to take all necessary steps to be in the top league in Europe. There are three key elements for us to reach this level, where the two first elements will give us the ticket to the third.

1
Improve our Risk-Weighted Asset efficiency. This means we will develop new and RWA efficient product solutions, to optimise our RWA processes and methods and to tactically manage our RWAs. In 2010, we were able to reduce our RWAs by more than €5bn and in 1Q 2011 by another €1.2bn, due to RWA efficiency work.

2
Improve overall cost efficiency. We will have a continued focus on efficiency across value chain and to migrate customer activities to efficient channels. Since 1Q 2009, our business volume per FTE is up by 27 percent; our manual transactions in the branch network is down by 30 percent, while our transaction in the private netbank is up by 16 percent. The transactions on the netbank are now seven times higher than the manual in the branch network.

3
Maintain our growth momentum. We will continue the roll-out of new distribution model to improve customer experiences and to ensure the full share of wallet. We have more than 100 branches in new formats, which is fully focused on advisory business. Our own surveys shows that customers are significantly more satisfied with these new branches. Higher interest rates will also benefit our top-line; we estimate that a 100 bps increase in interest rates will improve our Net Interest Income by around 10 percent and our total revenues by five percent.

A high Return on Equity is not only beneficial for the shareholders, it will enable us to have access to low funding and liquidity costs which is an increasingly important competitive advantage for a bank. We have already now one of the lowest funding costs across Europe and we intend to maintain this position. More importantly, to be a financially strong bank will enable us to be a trustworthy and safe financial supplier to our customers.

Localisation and evolving products

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In June 2009, two elite companies – Fubon Life and ING Life Taiwan – officially merged to become Fubon Life, in one of the most significant M&A projects in the Taiwanese life insurance industry. Before the deal was made official, the management team of both companies had developed a clear and definite strategy of business consolidation. The new Fubon Life announced immediately after the merger that because human resources are the most important capital for the company, it would be retaining all its employees. The company also actively informed its clients of the merger and ensured their rights and benefits would not be affected.

In the meantime, the management team consolidated the strengths from both sides of the merger and ensured they complemented each other in terms of human resource, product portfolio, customer service and distribution channels. It is because of these efforts that the company could maximise the operational benefits and demonstrate synergy faster than any other merger in Asia.

This synergy manifested itself in the company’s 2010 results. The first year premium income reached TWD 310.2bn ($10.4bn), a growth of 50.8 percent from 2009. The market share of Fubon Life moved up to 26.7 percent. Its earnings of TWD 8.62bn ($288.2m) and EPS of TWD 5.03 ($0.17) both topped the life insurance industries in Taiwan. The total asset value also increased significantly after the merger, growing 23 percent to reach TWD 1.62trn ($54.2bn) by the end of 2010. This strong performance was widely recognised in the industry, helping Fubon Life win the title of Most Admired Insurance Company in 2009 and 2010.

Comprehensive service philosophy
Fubon Life is founded on a customer-oriented philosophy to provide considerate and comprehensive service to its customers. To further improve its service quality, Fubon Life customer call centre has led the industry by introducing a 24/7 manned phone answering service. It also launched an internet phone service to serve the growing online customer population.

To integrate the sales systems of the two merging companies and improve service efficiency, Fubon Life launched the Fubon House project. These one-stop service centres incorporate a sales management system, customer service centre, training facilities and other corporate functions such as banking, securities and property and casualty insurance in the same office building for the convenience and benefit of customers. As of December 2010, more than 90 Fubon Houses have been established around the country to provide a localised service to customers.
 
Evolving products
In light of the aging society and the decreasing birth and marriage rates, Fubon Life has developed a variety of innovative insurance products to meet new market demand. In addition to basic life insurance, health and casualty insurance products, Fubon Life has introduced a series of protective insurance products such as surgical insurance, female life insurance, and major disease, specific disease and injury riders to help its clients create a comprehensive safety net.

Fubon Life also offers traditional foreign currency insurance policies and innovative investment-linked insurance products to fulfil the demands of its customers. Through the balanced development of tied agents, bancassurance and alternatives, Fubon Life can not only ensure its competitiveness, but also allow customers of different segments or regions access to its diversified product portfolio and service in a more convenient way.

A CSR role model
Fubon Taipei Marathon has become one of the largest marathon events in the world. It not only enjoys an attendance of more than 100,000 people, but also attracts champions of city marathons around the world to come to Taipei for the event.

In addition to promoting healthy exercise, Fubon Life has devoted significant effort to disaster relief projects, care for underprivileged children, and the promotion of cultural activities. After the Japanese earthquake in March, Fubon encouraged its employees to donate one day’s income to help the victims rebuild their homeland. Fubon Life therefore not only performed well in corporate earning and customer satisfaction, but also won numerous recognitions in Taiwan.

Aggressive expansion overseas
Fubon FHC, the parent company of Fubon Life, has been operating in the Taiwan market for 50 years. It has subsidiaries in banking, life insurance, property insurance and securities to offer a comprehensive and diversified financial product and service portfolio. The company has expanded overseas to Hong Kong, the United States, Vietnam and Mainland China with total assets of more than TWD 3.49trn ($116.7bn). In Taiwan, Fubon FHC has topped all listed financial holding companies in profitability in 2009 and 2010.

In addition to the continual development in the Taiwan market, Fubon Life is actively expanding its business into overseas markets with great potential, such as China and Vietnam. The company’s subsidiaries – Fubon Life Vietnam and Fubon Property Insurance (Xiamen) – and a branch office in Beijing have all been in operation since 2010. A joint venture with Nanjing Zijin Investment Co. is scheduled to be open in 2012.

A swiss tour d’horizon

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Switzerland remains a solid location for financial and corporate investments. While the country officially went into recession in early 2009, the Swiss economy recovered quickly. Switzerland has not experienced a severe credit crunch as seen in other parts of the world: positive action, some of it in response to the crisis and some of it long-planned, has maintained stability in the country’s financial system.

As well as measures and legislative activity regarding the stability of the finance industry, tax reliefs for families and additional funding of unemployment insurance, the federal government has implemented certain stabilisation measures for the overall Swiss economy in three steps. The cost-effectiveness of these measures was split over the fiscal years 2008-10.

These three-step stability measures covered, most importantly, the labour market (short-term work compensation for enterprises, and the prevention or mitigation of youth and long-term unemployment), but also contained stimulus measures regarding, for example, the export risk guarantee, infrastructure projects (road, railway), high water protection, environment protection, green energy, and the refurbishment and maintenance of buildings. As of May 2011, the unemployment rate is at a low 2.9 percent.

Switzerland hosts, since its formation in 1930, the world’s oldest international financial organisation, the Bank for International Settlement (BIS), which acts as bank for the most important central banks. Switzerland is a member of the Basel Committee on Banking Supervision. Other prominent international organisations such as the International Committee of the Red Cross, the World Trade Organisation, the World Intellectual Property Organisation and the World Economic Forum are also located in Switzerland.

International attraction
Switzerland attracts foreign companies and (ultra) high-net-worth individuals and employees for reasons such as free capital flows, open markets – including the labour market – legal, political and economic stability; as well as its strong, independent currency, high legal certainty, effective protection of social and economic privacy and high personal quality of life.

Businesses are supported by the country’s pragmatic regulation of its financial services industry, reasonable taxation, excellent educational systems on all levels, and availability of skilled employees (both Swiss and foreigners). Furthermore, the real estate market is robust.

For example, the Society for Worldwide Interbank Financial Telecommunication, which counts among its members the 2,500 largest global banks, has established in Switzerland a new operating centre for processing all European wire transfers.

And it is not just finance firms, such as hedge fund managers and insurers, which are increasingly moving to Switzerland. Industrial firms are also looking to the country when establishing their European or global headquarters, operation centres, research entities or manufacturing or trading sites – including Procter & Gamble, Kraft and Cadbury, McDonald’s, Cargill, Transocean, Sempra Energy, Amgen, Google, Yahoo and Ebay.

Autonomy
Switzerland is not a member state of the European Union or the European Economic Area, but of the European Free Trade Association and Organisation for Economic Co-operation and Development. This renders Switzerland the autonomy to regulate its financial services industry as it deems appropriate.

Swiss financial market regulation is based on two pillars: supervision of the market actors such as stock exchanges, banks or securities-dealers, with a focus on the secondary market rather than regulating the primary market; and self-regulation. Already since 1977, based on self-regulation promulgated by the Swiss Bankers Association (SBA), Swiss banks have adhered to know-your-customer rules and implemented and constantly improved means to identify account holders and beneficial owners.

Switzerland introduced legislation to penalise both insider trading and money laundering in 1990; further legislation, including the Anti-Money Laundering Act – which came into force in 1998 – translated the recommendations of the Financial Action Task Force on Money Laundering into national law.

Market surveys such as the Swiss Financial Centre Watch show that the Swiss financial market has experienced a veritable boom, not so much due to banking and insurance but mainly due to new financial services providers such as hedge funds, private equity firms, venture capital firms, independent asset managers and trust companies. There has been no private equity crisis at all in Switzerland.

Switzerland is one of the world’s leading financial centres; supervised, since 2009, by the Financial Market Supervisory Authority (FINMA). Incorporating the former banking, insurance and anti-money laundering authorities, the new body streamlines financial regulation, making auditing and enforcement uniform across different financial sectors. Despite its start during one of the busiest periods for financial regulators, FINMA has coped well.

Another important pillar of the Swiss financial center is the SIX Group, which provides financial infrastructure services to national and international participants. SIX Group was formed at the start of 2008 through the merger of the three main Swiss infrastructure providers. SIX Group’s fields of business therefore include securities trading (SIX Swiss Exchange), securities services (SIS) and financial information and payment transactions (Telekurs).

In good company
There are many Swiss financial intermediaries of international weight. Most – notably UBS and Credit Suisse – provide not only global asset management, but also investment banking services, and are able to advise large international enterprises on a global scale. Zurich Financial Services and Swiss Re are very strong global (re-)insurers. Glencore, which went public in May 2011, and Mercuria are among the world’s leading commodities traders; XStrata is a leading global mining enterprise.

Switzerland is also a stronghold for pharmaceutical enterprises, such as global players Roche and Novartis, as well as more niche biotech companies. The country is the home base for large nutrition companies such as Nestlé, and hosts Swatch, Rolex and other luxury watch manufacturers. It hosts a number of companies that are not only listed at SIX, but also on the New York and London stock exchanges.

Mitigating bank risks
Overall, Swiss banks are in a comparatively strong position, having avoided the worst of the sub-prime crisis and the collapse of Lehman Brothers. The deposit guarantee for Swiss investors was increased from CHF 30,000 to CHF 100,000 ($90,000) in December 2008 by the Swiss parliament, which is a clear and meaningful sign to boost business confidence. The insurance comes from the banks themselves, which are required to hold assets in Switzerland that amount to 125 percent of the protected deposits. It’s a typical Swiss solution that, to every extent possible, no taxpayer money is involved.

Furthermore, in the aftermath of the financial crisis, FINMA took the initiative to mitigate systemic risks of large Swiss banks that are systemically important for the Swiss economy. It has also proposed measures strengthening the resilience of such banks, thus limiting the economic impact of a crisis in the financial system and promoting financial stability.

This initiative is embedded in the global framework, in particular of the Basel Committee on Banking Supervision, which issued new rules (Basel III) in September 2010. Switzerland will implement the Basel III proposals within the internationally agreed time frame.

These revised rules would be applicable to all banks regardless of their systemic relevance, but banks with higher systemic importance should maintain a higher solvency. It is currently planned to require large international banks to have a capital of 19 percent of their risk-weighted assets; i.e. the 4.5 percent RWA minimum capital requirements under Basel III, the capital conservation buffer of 8.5 percent RWA, and a progressive surcharge of 6 percent RWA based on current calibrations. The necessary legal changes are currently being debated in the Swiss federal parliament.

Staiger, Schwald & Partner, founded in 1964 and with offices in Zurich, Berne and Basel (notary office), is a Swiss business law firm advising top-quality domestic and international clients. Its professionals advise companies, financial institutions and high net worth individuals in national and international M&A, venture capital, private equity, corporate and finance transactions, banking, capital markets, insurance and any type of commercial project. Driven by personality and commitment, they are dedicated to the client’s goals.

Mark-Oliver Baumgarten is a partner at Staiger, Schwald & Partner and head of the banking, finance and capital markets team

For more information Tel: +41 58 387 80 00; Email: mark-oliver.baumgarten@ssplaw.ch; www.ssplaw.ch

Closing the forex gap

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Squared Financial Services Ltd (SFSL) launched its platform in 2005. At that stage, electronic trading – especially on the foreign exchange side – was changing rapidly. Like many asset classes in the electronic space, both over-the-counter and exchange based, forex was becoming more transparent and efficient.

The origins of this transformation predate the NASDAQ ECNs by many years, and although the equity and futures markets adopted the values of transparent centralised trading more completely, it could be argued that forex, due to its range of products, trading models and participants was approaching true global price discovery more rapidly.

But there were still substantial gaps between retail, professional and institutional markets – and unlike most financial markets, foreign exchange was further complicated by the commercial and treasury related participants in each of these segments.

Nevertheless, even at this level trading venues were becoming more competitive, performance-oriented and user friendly. And above this level, true institutional and professional players were beginning to aggressively bridge the gaps so that the lack of transparency and centralisation which was once an outstanding drawback of forex trading now began to evolve into an advantage, as the asset class achieved broader and broader global penetration.
In the following years these trends greatly strengthened. Technology and innovation in both trading and clearing services allowed a great diversity of primary and niche players to offer specialised ways to trade even more specialised products.

The same advances allowed customers and vendors alike to develop their own best execution environments and economies of scale. In this environment, one of the primary missions of our platform sales team was to continuously review the landscape with customers and adopt the markets and models which offered greater benefits and trading opportunities.

In many cases these are driven by the newer ECNs and MTFs, but just as many are driven by traditional venues introducing enhancements. It’s a very competitive environment with increasingly sophisticated and knowledgeable customers, and no single venue can afford to be complacent with its current offering.

From this perspective, offering the traditional ECN principles of speed, transparency and price discovery is merely one of several foundations required for efficient foreign exchange and multi asset trading. This type of development and interaction has become so pervasive that forex is becoming a widespread component of price discovery in other asset classes, and vice versa.

Virtually every electronic product or market is becoming available to both retail and institutional traders in one form or another. Although there are legitimate concerns about best execution and leverage standards at the uninformed retail level, for the more informed, true multi asset global price discovery is becoming a reality. Perhaps ironically though, all the rapid developments have created even greater variation in the standards of liquidity, market data, execution, and rules of engagement.

Fluctuating standards and lack of clarity around the trading process itself create their own challenges. These may well outweigh the benefits of greater choice; especially if the customer and the platform are operating under different assumptions. At SFSL we very carefully assess these to ensure we communicate properly through the demo phase.

Platform development
Most of the platforms in production today either maintain the model which was dominant at the time of their launch or altered their rules of engagement as the market changed. At SFSL we followed the progression from single bank, to multi bank, to multi bank and non bank trading, but we did not abandon earlier incarnations, so that now we offer a broad range of liquidity pools, order types and trading methods – all enhanced with the latest technology.

Maintaining system integrity was slow and labourious, but it allowed very high customer retention and critically it kept us up to date on precisely which profiles gained the greatest value from which setup. Not incidentally, this flexibility is the most important factor in our recent white label success.

We are not restricted to rebranding our technology wholesale: instead we are able to reconfigure the entire platform, including trading interfaces, strategic partnerships and trading principles, so they match the client’s objectives and trading environment.

In this way we can rapidly roll out a range of end to end, user friendly solutions: from simple and functional retail MetaQuotes solutions, to complex corporate and regional banking structures.

In our system it is not unusual for a professional trader to execute his systematic EUR/USD limit orders and OCOs in our aggregated bank and non bank market service, and have his stops routed to a designated LP for low slippage execution. It is also not unusual for a mid-tier bank in our system to trade market orders for five million EUR/CHF against our non aggregated single bank quotes while working smaller orders inside the bid offer spread on our aggregated market and trading the same price on both. Efficient trading today is largely about understanding the interests of all parties to the trade and applying the appropriate rules of engagement.

Innovation and technology
As products become more complex this merging of innovation and technology becomes ever more important. Take the case of a liquid and competitive aggregated Spot to Futures Swap market. It provides endless opportunity for participants of both markets, but it also facilitates competitive quotation of OTC equivalents to those exchange traded products – and of course also functions as an alternative Forward market.

When it came to launching emerging markets on our platform we quickly realised that understanding the nature of order flow, liquidity, the trading process and clearing efficiencies were essential just to get regular business done. Here again the rules of engagement varied wildly from RFQ to competitive order driven aggregations depending on currency, order size, credit, and the nature of the flow itself.

I believe it is clear that electronic markets are not converging on one set of principles or trading architecture; instead they are continuously fragmenting and regenerating disparate products and areas of value. The service providers who will capture market share in this environment are those that take the time to understand their customers’ objectives and piece together the solutions in an efficient and user friendly way.

Jeff Grossman is Head of Sales and Marketing at Squared Financial Services Ltd

Platform pushes democracy

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The great thing about online foreign exchange trading is that it democratises the financial markets. Once a field for professionals only, now thanks to online platforms such as eToro the currency market and its inexhaustible opportunities have been opened up to anyone interested in financial investment. However, many beginner traders still find their first steps in the currency market to be challenging, and are even tempted to quit after a string of a few bad trades. After all, it takes time to acquire the knowledge and the discipline to trade responsibly and to achieve a consistent success rate. However, in the busy rat race of modern day life, most of the people that get involved in financial trading simply don’t have the time or the patience to do so.

So what is a novice trader to do? Absorb the losses and try to slowly improve, or just give up the dream of a career as a financial trader? eToro’s groundbreaking OpenBook application makes sure that you don’t have to do either.

The idea behind eToro OpenBook is that trading expertise can be shared. There is no reason for every trader to go through the same teething pains when they begin trading currency when there is a entire community of expert traders who have already paid their dues and know how to make consistent profits in the market. By connecting traders with each other, OpenBook unleashes the power of social networks onto the financial markets and enables users to trade smarter together. It is a place of sharing ideas and collaboration, like a giant lab of creative thinking about financial trading. Online social networks have already proven the extent of the effect they can have on the way people go about their daily lives, and OpenBook is set to make the same revolution in the way people trade financial instruments.

The advantages that OpenBook brings to the inexperienced investor are enormous. Instead of fumbling alone in unknown territory, novice traders can look at more experienced traders as guides and follow them as they make their trading decisions. This means that they can learn and gain experience from watching expert traders make their moves in the market instead of learning the hard way – making mistakes that are often costly and completely avoidable.

Through OpenBook traders can see live trading feeds of the entire eToro trading community, follow particular traders and even copy trades automatically. With all due respect to the standard educational materials provided by online trading platforms such as books, tutorials and courses (all of which incidentally are also provided by eToro), nothing beats actual exposure to live trading in the markets. With OpenBook, novice traders are constantly exposed to unending flows of live trading activity, and they don’t need to risk any of their funds to gain this essential live trading experience because other traders are doing it for them. Better yet, they can start making profits by following successful traders and copying their moves before they even start the learning process.

The obvious question that arises is then how can I know which traders to follow? This is a very important decision since as an inexperienced trader you don’t want to follow someone who doesn’t know what he/she are doing. Fortunately, OpenBook makes the choice rather easy. In the financial markets, a trader is only as good as his/her profits, and so OpenBook provides live updated rankings of eToro’s top profiting traders. On the ranking page, you also have the option of choosing the period for which you want to see the top profiting traders (1 week, 1 month, 3 months, 6 months, 1 year), which basically means choosing between rising stars vs. seasoned veterans. The most profitable trader of the week may turn out to be a very lucky guy, but not someone you’d want trust with your own funds.

Another way of going about choosing which traders to follow is to have a look at eToro’s Market Leaders. This is a feature that gives FourSquare style badges to users who out-trade their peers, with leaders elected by country and by trading instrument. So for example, if you’re interested or more familiar with trading a particular instrument, for example EUR/USD, and you live in France, it would make sense to go to the Market Leaders page and find the top profiting EUR/USD traders from your area.

This is a very effective method of finding traders who are compatible with your personal trading style because you can automatically eliminate traders who trade instruments that you have no interest in trading. Why look through the profiles of traders who mainly trade indices when you only want to trade commodities? The added geographic categorisation of eToro’s market leaders can help you overcome language barriers if you want to get in touch with the trader personally. You may also prefer to follow a trader who is a market leader when it comes to the currency of his/her own country – for instance a Swiss market leader who is leading the field in trading the CHF.

Whichever is your preferred method of top trader spotting, you can always click on any trader’s user name to view their profile. This gives OpenBook users a better idea of each trader’s trading style and enables them to take a look at their statistics – the instruments they usually trade, the leverage they usually use, the success percentage of their trades, etc. By looking at a trader’s profile you can both determine whether or not this is a trader you want to follow and also learn about successful trading strategies.

The personal trader profile is also the gateway to getting socially involved in the investment network. It is through the profile that you can view and comment on the trader’s trades, see who they are following and who is following them, and add them to your friends list by choosing to follow or copy them. You can even start a discussion on the trader’s discussion wall where they can answer your questions, give you expert tips and advice, and generally share the wisdom they’ve gained from years of trading.

Finally, if you see that following a certain trader’s position brings you consistent profits, you can choose to use OpenBook’s CopyTrader feature to copy their trades automatically. With CopyTrader you can set aside as much as 20 percent of your funds to copying any one trader’s positions while maintaining full control of your trades and full transparency. You will still have control of any copied trade and you will be able to stop copying a trader’s positions at any time.

New dawn
This is an amazing revolution in currency trading, because now instead of currency trading, you can people trade – ie build your own dream team of traders to trade for you! In a way, through the CopyTrader feature, OpenBook users have the chance to instantly promote themselves to a managerial level position in which they no longer have to trade themselves, but spend their time managing their team of traders instead. Like any manager, the users can recruit traders, distribute responsibilities in the shape of the percentage of their balance they entrust to each trader, and even fire traders that don’t perform as well as they expect. Where else can you go from being a newbie to being the boss in a matter of seconds?

With so many features and options, the uses of OpenBook are virtually endless, and the greatest thing is that by coming together as an investment community, everybody wins! Novice traders get to use the knowledge of experts to their advantage and expert traders get rewarded for their followers with the soon to be launched Guru reward program. eToro OpenBook is a true revolution in financial trading and we have not yet seen the full potential that this one-of-a-kind social trading network can achieve.

For more information www.openbook.etoro.com

Estlander: Pioneering new ideas

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The Finnish CTA, Estlander & Partners, has shown the market that it is possible to learn from the errors others make in the industry and use it to its advantage. This magazine awarded the firm Best UCITS Compliant Product in Europe, citing in particular its fund offers to investors looking for an investment that does not correlate with other risky assets, and which provides an excellent opportunity to broaden their portfolio.

The company has built on the knowledge that capturing and locking-in opportunities for financial success requires extremely fast decision-making abilities founded in comprehensive and structured market information.

Its resourceful employees made use of this information in an innovative and systematic way as they developed a combination of information, advanced IT capabilities and risk management, supported by a committed R&D strategy and constant product refinement.

Martin Estlander in his humble Finnish manner explains: “Some of our competitors who implemented a comparable trading style have also been quite successful. The trading style we adopted however has been positive so far as we have never experienced a negative calendar year with it. Our holding period is shorter and we are more reactive to the market environment. This provides good returns and excellent diversifications. It is our long track record of achievement and our solid return characteristics which make us different.”

The latest published data showed Estlander & Partners manages $1bn, within its three distinctive investment programs: Estlander & Partners Global Markets, Estlander & Partners Freedom and Estlander & Partners Alpha Trend. Each one of the three programmes is a systematic CTA created to take advantage of any change, which denotes fluctuations in global asset prices and modifications in risk appetite. One of the CTAs most successful products has been the Estlander & Partners Alpha Trend, which has been in operation nearly 20 years and is a diversified short term trend structure which is active on more than 70 futures markets and offers a systematic programme with a highly selective trading process. The “Alpha Trend” offers investors the ability to hold positions for an average period of 20 to 30 days, delivers steady and consistent returns and has so far never experienced a year of negative returns. According to Estlander it has delivered a positive performance in 95 percent of its six month periods.

The investment philosophy within the different products of Estlander & Partners is straightforward. The CTA systematically and in a disciplined manner, without losing focus on constant innovation and enhancement, capitalises on market movements driven by investor behaviour. “Estlander tries to deliver high, absolute returns and strong risk adjusted returns by implementing rigorous risk control at every stage of the investment process,” the CTA says.

Estlander has been able to combine its employee’s individual trading experiences, quantitative skills and sophisticated modelling capacities to successfully tackle the complexity of the markets at any moment. The CTAs investment philosophy states: “We know that quantitative analysis is an effective way of profiting from market movements and historic price data repeatedly provides identifiable investment opportunities.”

It is Estlander’s belief that diversification across a broad range of markets maximises opportunity and ensures liquidity and that a systematic approach to investment decision-making enables the CTA and its clients to benefit from investor behaviour in a disciplined and risk controlled manner.

Meanwhile, CTAs nowadays use a plethora of electronic techniques such as algorithmic trading to achieve efficient execution. Institutional investors also increasingly use algorithmic trading in identifying and executing trading opportunities. Demand for advancing systems has led to technology constantly changing the markets and the way the industry conducts its business and is shaping next generation financial services delivery.

Estlander’s CEO notes: “Advanced technology has been an important part, has a big impact on the market and will continue to have an impact because it emancipates investors and allows for more liberty. The investor need to depend less on the  human brokers  and more on the platforms. It is a big change. Algorithmic trading has changed the industry especially for banks and professional players it has changed the market.”

Estlander & Partners is aware and welcomes the ever-changing landscape of alternative investments and regulation change for European funds. Institutional grade controls, increased transparency, liquidity and flexible product strategies are driving fundamental changes in the very fibre of the industry. Estlander feels this is a great opportunity for the industry. He says: “Added and appropriate regulation of products and the industry as a whole will assist in making it more regulated and comparable to other investments. It will also be easier to focus on benefits and bring about a change of mentality by making it more onshore. This is a very positive trend.”

The CTA has not yet adopted UCITS IV, which was transposed into national law on July 1, but noted, it will look into it in detail shortly. Estlander’s CEO said: “We welcome UCITS IV very much.It improves the regulatory framework further and is clear step in the right direction, making cross  boarder sales more efficient. The reason of our growth has been due to UCITS as they provide us with the freedom to speak openly and communicate unreservedly, which has helped to promote transparency and will continue to do so.”

It was at the end of April when the CTA announced that its assets under management had gone past the $1bn landmark, which was an asset growth of over 100 percent on its year on year growth. Estlander commenting on the importance of the $1bn milestone and the significant growth, said: “We have seen increased interest in CTA strategies over the past year in addition to our amplified our focus on raising assets through the strengthening of our client relations with added client meetings.” He noted: “Estlander’s daily liquidity, uncorrelated profits and a long and successful track record have been welcomed by investors. This, in addition to onshore UCITS wrappers without any restrictions for investments or non-transparent added costs, seems to have attracted further investors. It has also helped the managed futures sector grow at the expense of other hedge fund strategies.”

The CTA operates out of two of the key university cities in Finland, Helsinki and Vaasa. Estlander says: “We are surrounded by outstanding people and co-operate with the academic world through sponsorship as well. In return this gives us very good access to creative people and superior thoughts. The pool of people we work with is paramount to us.”

The CEO of Estlander moreover feels that being based in Finland ranks highly because the business environment is considered one of the most commendable due to its high employee loyalty, job satisfaction, low corruption and strong corporate environment. In addition to the Finland offices the company also has an office in Munich. Its location close to the universities helped Estlander to enlist top talent, who then maintained their relationships with the company and assisted in the realisation of Estlander’s target objectives.

Estlander commented on the company’s distinctive location: “Our unique location, away from the main financial hubs, has supplied us with the freedom to employ a non conformist way of thought and provided an opportunity to approach unconventional solutions.” He added: “It feels good to have the freedom of thought, to work on our ideas and maintain a particular, unique focus without too much influence of how others do it or investors expect it to be done.”

The CTA recently opened an office in Zurich, Switzerland, to strengthen its presence further in continental Europe, and will be especially focusing on servicing high net worth individuals and institutional investor clients within the Benelux countries, Switzerland and Sweden. The strategy behind the move is simple according to its CEO: “An office in Zurich allows us to show our strong, more personalised, commitment to our clients. We are now closer to them as we can meet them face to face and in that way can serve them better.”
Estlander & Partners employs 45 professionals with reputable, thriving track records in fund management, trading and distribution and considers them the key element to their success. Estlander’s CEO notes: “As Finns, it is no surprise we want to be based in our own country, if possible. Our employees are our main asset and that’s key. Since our current location works for our clients and is important to our employees, it all works out just right.”

There are a few things in the pipeline for Estlander & Partners but there will first be a waiting phase until Zurich is fully up and running. Estlander says: “Once Zurich gets up to speed we will see what will develop next. It is so hard to predict the future but it more important to be reactive. Although it is too early to give specifics we do have an eye on further increasing our exposure to Asia, which is exciting as we increasingly observe demand from that region.”

Estlander & Partners upholds a positive outlook for the future due to an extremely strong investor demand but takes nothing for granted. Estlander commenting on the CTAs prospects: “The challenge and focal point for us will be to take care of our clients. We need to focus, research, pioneer new ideas and continually refine our methods. We also need to make sure we can keep up with providing investors with excellent, personalised service.”

5 year plan sees review at Boubyan

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Winning the Best Islamic Bank award in Kuwait from Arabian Business magazine, and the Best Islamic Bank in Kuwait for Customer Service from Service Hero, was proof the bank is on the right track, whether with respect to product and service development or distinction in customer service.

During 2011, the bank continued the implementation of its local expansion strategy by offering more distinguished Islamic products and services in addition to the geographical expansion throughout the different areas of Kuwait to reach the largest ratio of the various categories of society.

Thanks to the developments witnessed in the bank, it ranked 44th among the top 500 Arab companies as per a report published in the last issue of Al-Iktissad Wal-Aamal magazine stating the top 500 listed companies according to market capitalisation for the two years 2009 and 2010.

Noteworthy is that the bank underwent a set of major developments during the last two years; namely since April 2009 with the formation of a new board of directors followed by a step towards enhancing stability by the entry of new stakeholders to the bank; chief among which is the NBK with a shareholding exceeding 47 percent.

During this period, and thanks to its professional management team, Boubyan Bank successfully shifted from loss to profitability and significantly regained the trust of shareholders and clients. Moreover, the bank developed a clear vision and strategy as professionally set by the present board of directors, which is carefully and continuously implemented by its departments in such a way that realises all the desired objectives.

The mentioned period witnessed a set of developments, basically the entry of NBK as a major stakeholder, following which an accurate assessment of the bank’s conditions was conducted for around two months, then a set of parallel steps were taken including contracting with a prestigious international consulting firm to prepare the bank’s strategy now in action.

As for the second step, the bank made a capital increase of 50 percent; thus raising its equity to above KD 235 million, which, in its turn, contributed to raising capital adequacy ratio to above 30 percent, the highest among Kuwaiti banks.

The third step was represented in the cleaning the bank’s budget by the write-off of precautionary provisions, whereas the last step was dedicated to strengthening the bank’s human resources, and completion of the executive team structure by soliciting a number of highly efficient banking executives.

Islamic values have played a major role in establishing the standards and principles of the bank and its operations. These values have been adopted throughout all sectors, departments and branches to reflect our genuine identity and ideals that are based on integrity, transparency, and honesty. In addition, the bank is committed to the society it operates in, and this is reflected through various social responsibility initiatives and programs. This has aided in the recruitment of talented Kuwaiti youth to join a promising banking environment.

The bank has succeeded in moving forward and has witnessed numerous operational growths, which includes the progress of private banking services and the expansion of its network, which will include more than 20 branches throughout Kuwait by the end of the year. In addition to this expansion, Boubyan Bank ATM machines will soon be located in more commercial and residential areas.

The bank has also developed its Platinum banking services to meet the needs of special clients such as company owners and executives. This service provides them with an exclusive package of privileges and services offered by our personal banking officers who respond to our elite customer queries and communicate with them on a regular basis to keep them updated on the latest services while providing them with trustworthy financial and banking advice to meet their expectations.

Boubyan private banking services has proven to communicate with customers effectively and efficiently by providing them with a number of leading services, including setting wealth management plans, reviewing the financial statuses of clients, and supporting their investments. We are committed to providing our customers with all the banking support they need while protecting their investments and assets by offering credit and Sharia’a consultation at all times.

The bank continued its policy aiming at becoming the first choice for companies desiring to deal with Islamic banks, as the new management adopted a clear strategy set by a leading international specialised entity.
The management structure was reorganised in accordance with the new strategy based on diversifying the banking relationships to encompass all economic sectors while focusing on productive sectors and targeting medium and large size enterprises to realise best banking service.

In addition, providing all banking needs through highly qualified specialised account managers for provision of best service, whereas their role is not confined to studying and granting credit to companies but also attending to the comprehensive banking relationship.

Despite the tough economic conditions, Boubyan Bank managed to realise remarkable growth rates in the credit portfolio reaching 30 percent by the end of the year, which is considered one of the highest growth rates in the local market, by soliciting many well-known productive high financial and economic worthiness companies, whilst strictly abiding by the highest credit worthiness standards, studying and diversifying risks.

Structured Finance and Syndicated Finance Division plays a key role in provision of new finance instruments whilst focusing on growth in syndicated finance for productive companies and development plans’ projects, as seen in arranging a syndicated finance transaction for Zain Sudan where the Division successfully gathered a number of local and international banks to participate in this transaction, thus increasing finance value to €270m. The Division also undertook the restructuring of some syndicated finances for some local companies, thus helping these companies overcome the tough conditions of the Global Financial Turmoil.

The year also witnessed assignment of a division for following up investment companies, which is entrusted with following up clients and adopts a policy based on negotiation with the defaulting client, the fact that resulted in rescheduling many files, improving collaterals’ ratio and correction of the conditions and composition of the bank’s credit portfolio.

In line with the restructuring process throughout 2010, the focus of the financial group was broadened from providing timely, adequate and effective information to also accommodate deploying a comprehensive framework for strategic performance management. This has enabled to benchmark the bank’s operating model against best practices that support senior management and effectively contribute into decision making.

During the year 2010, the bank’s human resources development continued, as the accredited trainees’ base expanded both on the local and international levels, in addition to retraining and qualification of all the staff of consumer banking, corporate banking and treasury services groups through an integrated training system.
To the end of creating a professional organisational environment, the preparation of career path plans for each position in the bank’s organisational structure was completed, and as part of the national labour support policy as a pivotal strategy, the Human Resources Group managed to realise a ration of 63 percent for Kuwaiti nationals of the total bank’s staff.

Bank eyes conservatism

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Banco Industrial do Brasil is a privately owned Brazilian bank, established in 1994, headquartered in the city of São Paulo, with branches in the main states of the country. It operates essentially as a credit bank focused on the financing of small and medium sized enterprises (SME), offering competitive products to fit the needs of its clients.

With a long history and experience in the SME segment, the bank developed a profitable and sustainable business model based on three pillars: (i) focus and specialisation in credit market niches with high growth potential; (ii) agility in the origination of quality assets; and (iii) strict credit, liquidity and internal control policies.

Established as a multiple bank, Banco Industrial do Brasil is authorised to conduct credit, foreign exchange, and leasing operations, among other business lines, according to the Brazilian regulation.

History
The history of Banco Industrial do Brasil begins with the acquisition of Banco Santista by Carlos Alberto Mansur. Founded in 1988, Banco Santista was the financial arm of Bunge Group and its business model was focused in treasury operations.

After acquisition by Mansur, the bank changed its strategy focusing in SME credit operations, providing working capital, trade finance, foreign exchange and lending operations.

In 2000, Banco Industrial do Brasil began the process of opening new branches, in order to expand its activities. Currently, the Bank has seven branches and three offices providing services to the main economic centers of Brazil.

Focusing on diversifying its funding base, in 2002 the bank established a short term notes program of US$50 million, issuing its first tranche in the same year. In the following years, the bank has also raised funding with multilateral banks, such as DEG (Deutsche Investitions and Entwicklungsgesellschaft MBH), Inter-American Development Bank (IADB) and International Finance Corporation (IFC).

Corporate profile
Banco Industrial do Brasil prioritises the high quality of its loan portfolio, adopting a conservative credit policy. Clients are evaluated according to objective parameters that take into account the financial capacity, the liquidity of the guarantees, punctuality in meeting their obligations and the performance of the receivables portfolio.

The bank seeks to establish a long-term relationship with its customers, ensuring a deep knowledge of their needs and agility to meet their demands, offering a diversified portfolio of products, highly qualified human resources and decision-making oriented technological environment.

All transactions are analyzed by the Credit Committee, comprising of the bank’s executive, and approved only by unanimous decision. The bank has over 90 percent of its loan portfolio covered by guarantees such as receivables and other collaterals, thus contributing for the maintenance of a non-performing loans rate below 2.0 percent of the bank’s total credit portfolio.

The market risk is managed with a high conservative level. Treasury is not a profit centre. Its main function is to assure competitive and proper funding for the bank’s assets, avoiding exposure in currency, tenor and interest rates.

The main characteristics of the bank’s business model is conservatism featuring a low leverage level, strictness in lending and the maintenance of a high-liquidity level.

Credit portfolio
The credit transactions of Banco Industrial do Brasil are oriented to companies with annual revenues between $10m and $300m. The bank has developed a wide base of products, grouped into three categories: working capital, financing and trade finance.

The working capital loans are conducted by the lending of free resources, designed to industrial, commercial and service sectors, in order to meet the cash needs of the clients. They are generally for short and medium term and are guaranteed by receivables, pledge of goods, equipments, and certificates of deposit (CDs). The main products offered for this modality are: guaranteed account, working capital, hot money and discount of receivables.

The financing products consist in lending operations with directed resources, to industrial and commercial enterprises, in order to facilitate the acquisition of machinery, vehicles and other equipment. The main products offered for this modality are: lending from BNDES (Brazilian development bank) and lease sale.

Concerning the trade finance products, the bank conducts import and export financing operations and international remittances for foreign exchange settlement. These products are designed to agribusiness, industrial and commercial sectors and rely on credit lines from international banks and multilateral institutions.

Funding
The funding structure of Banco Industrial do Brasil is well diversified and appropriate to its assets’ profile. The management of the funding portfolio is aimed to prevent terms, interest rates and currency mismatch, and to guarantee the liquidity needed for the institution’s daily operations.

The local market is the main source of funding, which is vastly comprised of asset companies, investment funds, financial institutions, enterprises and individuals. This funding is raised through certificate of deposits.

International funding is structured through the issue of eurobonds and from multilateral institutions. Trade finance operations are financed by correspondent banks. The bank has credit lines with over 30 banks throughout the world. And is also a member of the Trade Finance Facilitation Program from IADB and the Global Trade Finance Program from IFC.

Corporate governance
Banco Industrial do Brasil adopts a solid corporate governance policy, based on sound practices, believing that it contributes for the evolution of its internal structure, improving its decision processes, as well as its internal control system, thus guaranteeing consistency, fairness and disclosure to the information flow.

The bank’s management comprises a Board of Directors and an Executive Board. The independent directors represent two thirds of the Board of Directors members.

The bank has established a Code of Ethical Conduct, applicable to all of its managers and employees, defining the guidelines that must be followed in all of its activities. It reflects the bank’s values, cultural identity and commitment with the markets where it operates and with the communities to with it relates.

The Internal Control System is established by a structured process involving all the bank’s employees, in order to enable secure, adequate and efficient conduction of activities.

Banco Industrial do Brasil also relies on an Anti Money Laundering program, developed in order to prevent that its products and services are used to intermediate illicit resources. Every single employee attends an annual training program.

Risk Management is conducted according to the principles of Basel II, regulated in Brazil by the Brazilian Central Bank. Such structure relies on the indirect participation of all areas of the institution and includes identification, evaluation, monitoring, control, and mitigation of risks, in addition to the requirements established by regulators, when specified.

The Bank’s Management opted to outsource the Internal Auditing, reinforcing its commitment with the independence needed to conduct such activity. In order to do so, the bank has hired a well known global auditing company, which annually defines the internal auditing plan along with the Board of Directors.

Banco Industrial do Brasil provides all information regarding its history, operational profile, and ownership structure on its Investor Relations website; in addition, there are downloadable versions of its financial statements, institutional presentations and rating reports. The Investor Relations website is available in Portuguese and in English.

Growth with solidity
Banco Industrial do Brasil conducts its business model through a client-orientation and relationship-based structure. The capability to anticipate its clients’ needs and the agility to meet them with competitive solutions are the bank’s main differential to maintain its growth throughout the years. Thus, the conservative management policies allied with its appropriate funding structure and comfortable capitalisation and liquidity levels allow the bank to maintain a solid financial position.

For more information: www.bancoindustrial.com.br/ri

Private banking in the polder

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A new beacon in private banking excellence, ABN AMRO MeesPierson was formed in 2010 by the integration of two of the Netherlands’ oldest and most-respected names in wealth management – ABN AMRO Private Banking and MeesPierson.  Private banking has historically been a key strength for the centuries-old Dutch bank ABN AMRO, and its former subsidiary MeesPierson was a purveyor of premium services for high-net-worth (HNWI) and ultra-high-net-worth (UHNWI) individuals in its own right. The two banks are now united in a powerful private banking combination offering clients total solutions tailored to individual needs, at home and abroad.

Frans van Lanschot is the man at the helm of ABN AMRO MeesPierson, which services HNWI, as well as UHNWI through the bank’s exclusive private wealth management proposition. “We are proud to have made this strong start following significant corporate changes at ABN AMRO and despite the financial crisis, and once again occupy a leading position among Dutch private banks,” says Frans. He believes that the new private bank’s success comes from a keen understanding of client needs rooted in strong, long-term relationships. “Clients today seek quality and not conspicuous consumption, and managing their wealth requires the same prudence,” he explains. “We carefully weigh risk and return so that our clients know their money is in good hands.” Frans says this requires being aware of market developments, responding proactively, and doing everything possible to understand what clients really need and crafting innovative solutions that are simple, clear and workable, and above all, suitable.

From families to family businesses
The new private bank has long addressed the specific needs of family wealth, including its transfer to the next generation. Its pioneering Generation Next educational programme prepares the children of clients for future assets. Foundations and charitable (non-profit) organisations are also supported with dedicated expertise through the Institutions & Charities proposition, which can also facilitate philanthropic matchmaking between prospective patrons and beneficiaries. In a related effort, ABN AMRO MeesPierson has recently begun working with clients on impact investing, whereby private capital generates social and environmental change and return. “Through our extensive internal and external networks, we’re able to facilitate direct or indirect investment in local enterprises, such as microfinance, or funds representing a pool of projects,” says Frans. Impact investing is a way for clients to apply their entrepreneurial experience, values and passions towards building a living legacy.

In terms of entrepreneurship, ABN AMRO MeesPierson is strongly positioned to draw on ABN AMRO’s broader commercial banking capabilities and focus on entrepreneurs and their enterprises. Frans: “This encompasses family businesses and their owners, for whom professional and personal needs are often intertwined.” He notes the importance of defining and structuring financial matters for this segment, evaluating all business and personal aspects against potential risks so that assets are not only protected but optimised. “ABN AMRO MeesPierson offers a special service that helps clients who bank with ABN AMRO both as individuals and as entrepreneurs to achieve this balance,” he says.

A specialist approach
Similarly, a Professionals & Executives team serves executives in various fields, including lawyers, accountants and consultants and also targets senior management of listed companies. “Such clients face complexities in their personal finances because of the nature of their functions, so they also require specialist services,” Frans explains.

“Our dedicated service teams address these individual needs and provide independent, appropriate advice directly supported by subject-matter experts.” These are just some examples of how ABN AMRO MeesPierson innovates on the basis of clients’ specific circumstances and goals.

Another example is ABN AMRO MeesPierson’s dedicated International Private Banking service for clients living abroad and requiring wealth management services both in the Netherlands and in their countries of residence. “Our specialised advisors offer the international orientation and local support essential for this segment to manage their assets worldwide,” Frans adds.

Holistic solutions and services
With client business dealings and lifestyles crossing borders and time zones, Frans also emphasises that an integrated and international service model is now more important than ever. “We have therefore defined the following three leading principles: we take a holistic approach to our clients rather than focusing solely on their investments; we always provide our clients with a strong set of products and solutions, offering considerable choices; and we deliver our services through an international network and professional staff,” Frans says. All this is essential to being perceived as a trusted advisor, putting client interests at the heart everything ABN AMRO MeesPierson does, from operations to investment recommendations. “It’s about being professional, independent, committed and transparent,” he affirms.

That’s why the bank recently redesigned its product philosophy with aligned local and global product and solutions capabilities covering investment advisory, treasury and special products, wealth structuring, discretionary portfolio management, structured products, private lending, investment products, insurance and research and strategy. This combines capabilities and expertise, leverages scale, streamlines policies, monitors consistency and ensures transparency – to the benefit of clients. As such, independent and transparent advice in these areas complements a rich array of services and products. For example, the research and strategy team – the cornerstone of the bank’s investment policy – analyses worldwide market developments and generates regular macroeconomic views, market forecasts and research on all asset classes and instruments (except investment funds). “These are all used for strategic and tactical asset allocation within client portfolios, which reflect carefully calibrated risk profiles,” Frans describes.

ABN AMRO MeesPierson’s open-architecture platform has also expanded to allow access to a broader range of products and opportunities whereby clients are offered the best selection of products available, irrespective of provider. Investment funds are thoroughly scrutinised by A.A. Advisors, the bank’s wholly-owned yet independent centre of excellence for fund selection and multi-management solutions based on industry-leading quantitative and qualitative analysis.

Network and know-how
In addition to its prominence within the Dutch private banking landscape, ABN AMRO also features a strong local presence in 27 countries in Europe and Asia. This includes trusted brands ABN AMRO Private Banking as well as Banque Neuflize OBC in France and Delbrück Bethmann Maffei in Germany. All enjoy proud traditions of service excellence spanning centuries, coupled with outstanding brand recognition and strong local reputations.

Networks and know-how are leveraged so clients experience truly international yet personal service. “Meanwhile, our World Citizen Services teams in Spain, France and Switzerland provide tailored advice to clients relocating to those countries,” says Frans. This exclusive assistance can range from structuring international assets, financing a home abroad and providing personal and business contacts in the local market.

Professional and knowledgeable client-facing and support staff are crucial. Therefore, ABN AMRO MeesPierson is committed to investing in and cultivating the capabilities of its 1,100 employees through ongoing training and development in partnership with leading local and international business schools. The ABN AMRO INSEAD Private Banking Certification Programme was recently launched to certify 550 private bankers in the Netherlands and the bank’s international network by 2013. “We strive for constant improvement, learning from one another – and from our clients. We want to remain a leading private bank not only in terms of market share but by setting the standard for service delivery within the sector,” says Frans. “That means ensuring that employees have the knowledge and skills to interact with clients at the highest level, and thereby, truly become trusted advisors.”

Committed sustainability
Frans points out that in addition to gaining and retaining client confidence, another challenge for financial institutions is to incorporate sustainability principles into investment processes. “This is an area in which the industry can create impact, both by embedding sustainability criteria in investment practices and with sustainable investment opportunities,” he says. The private bank offers such products through its joint venture with Triodos Bank – Triodos MeesPierson – as well as through Neuflize OBC. Sustainability is also part of ABN AMRO MeesPierson’s services, for example, sustainable portfolio management as well as its business operations. “Clients place increasing emphasis on sustainability in personal and business decisions, so making it a business priority shows that we understand and embrace our clients’ values,” Frans explains.

Sustainability is therefore another example of how ABN AMRO MeesPierson puts client interests first and continues to win their trust, through lasting relationships based on clear communication and accountability. “The only way to achieve this is by taking the time to listen to clients and get to know their specific needs and aspirations,” Frans confirms. According to him, these convictions reflect ABN AMRO MeesPierson’s passion to connect with clients and create sustainable value. “We will always stretch our boundaries and aim to achieve more for clients,” he concludes.

For more information Tel: +31 20 6286606; www.abnamromeespierson.nl

Asian stocks higher but uncertainty lingers


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Asian markets rebounded on Tuesday following a series of losses last week after released data showed improved manufacturing activity in China and buoyancy that Federal Reserve Chairman Ben Bernanke may unveil steps to boost the US economy. 



Hong Kong’s Hang Seng climbed 1.99 percent to 19,875, Japan’s Nikkey rose 1.2 percent to 8,733 while the Kospi in South Korea posted the largest gain to 1,777, a 3.86 percent increase.


Market uncertainty continued to prevail however as investors sought out the safe haven of the bullion, leading to gains of an all time high of 1,901,80 an ounce, up $10.60, in Tuesday’s electronic trading.


Platinum traded at $1903.25 after it rose by 0.7 percent or $1,916 an ounce, to its highest price in three years.