Foreign banks squeezing Asian market
(08 March 2013 – Asia) It appears ANZ Bank is not the only one reporting squeezed margins due to increased foreign competition in Asia.
Slower growth and fierce competition has slightly hit two of the biggest foreign banks in Asia – United Kingdom’s HSBC and Standard Chartered have both reported.
Standard Chartered reported slowing income growth in several key Asian markets, as its 2012 profits edged up by less than 1 percent to US$4.79 billion (A$4.67 billion), compared with 12 percent growth a year earlier.
Standard Chartered, heavily focused on emerging economies, said its income growth in Hong Kong had slowed to 6 percent, from 19 percent in 2011, and income in Singapore rose 5 percent, compared with 27 percent a year earlier.
While it had experienced a surge in income from China, the bank described the previous year as ''challenging'' and predicted this would continue into 2013.
London-based HSBC, one of the biggest banks in the world with a major presence in Asia, also this week reported that its net interest margin had narrowed in the year to December to 2.32 percent, from 2.51 percent a year earlier.
Group Finance Director Iain Mackay said its margins in Asia outside Hong Kong had been squeezed by the slump in global interest rates, but were holding up "remarkably well".
He made the comments after HSBC handed down a 6 percent slump in pre-tax profit to US$20.6 billion, after it was hit with hefty fines in relation to money-laundering charges in the US and Mexico.
Although HSBC and Standard Chartered were optimistic about China's growth prospects, their results highlighted the challenge created by economic uncertainty and more competition in the region.
HSBC Chief Executive Stuart Gulliver said the bank was expecting economic growth of 8.6 percent in China this year, compared with growth rates in developed economies of just 1 percent.
''Whilst the operating environment for financial institutions remains difficult, our core business will continue to reap the benefit of recovering economic growth in mainland China and its positive impact on other faster-growing regions,'' he said.
Standard Chartered reported slowing income growth in several key Asian markets, as its 2012 profits edged up by less than 1 percent to US$4.79 billion (A$4.67 billion), compared with 12 percent growth a year earlier.
Standard Chartered, heavily focused on emerging economies, said its income growth in Hong Kong had slowed to 6 percent, from 19 percent in 2011, and income in Singapore rose 5 percent, compared with 27 percent a year earlier.
While it had experienced a surge in income from China, the bank described the previous year as ''challenging'' and predicted this would continue into 2013.
London-based HSBC, one of the biggest banks in the world with a major presence in Asia, also this week reported that its net interest margin had narrowed in the year to December to 2.32 percent, from 2.51 percent a year earlier.
Group Finance Director Iain Mackay said its margins in Asia outside Hong Kong had been squeezed by the slump in global interest rates, but were holding up "remarkably well".
He made the comments after HSBC handed down a 6 percent slump in pre-tax profit to US$20.6 billion, after it was hit with hefty fines in relation to money-laundering charges in the US and Mexico.
Although HSBC and Standard Chartered were optimistic about China's growth prospects, their results highlighted the challenge created by economic uncertainty and more competition in the region.
HSBC Chief Executive Stuart Gulliver said the bank was expecting economic growth of 8.6 percent in China this year, compared with growth rates in developed economies of just 1 percent.
''Whilst the operating environment for financial institutions remains difficult, our core business will continue to reap the benefit of recovering economic growth in mainland China and its positive impact on other faster-growing regions,'' he said.