Banking

Vietnam’s banking sector has needed a reboot for some time. Impacted by bad debt, corruption and lax regulation, banks have not reached their potential. In response to the multiple problems, Vietnam is implementing a development strategy to strengthen the sector. The pressure is on banks to comply with new regulations, such as adhering to Basel II capital standards, but banks along with rating agencies generally have an upbeat view of Vietnam banking’s future.

Australia, famous for its coral reefs and koala bears, is also home to some of the world’s most brazen banks. The Royal Commission that spent months investigating the actions of the nation’s top banks uncovered a hornet’s nest of misconduct and customer exploitation. Needless to say, remedial steps are in effect, and the banks involved have been left with little choice but to take swift corrective measures.

For several years now, anti-financial crime (AFC) regulations have prohibited the operation of shell banks.  A shell bank is a bank that has no physical presence in the jurisdiction where it is incorporated or licensed and no affiliation with a regulated financial group.

Diversity and inclusion have recently become top goals in the strategic policies of many banks, but how is execution matching up? Research continues to expose large gaps between good intentions on paper and good outcomes in practice. Diversity and inclusion are more than nice-sounding words; when realized, they boost profitability. Banks that go no further than prioritising these goals in mission statements miss out on playing the ace.

Interbank offered rates, the interest rates at which banks lend and borrow in the interbank market, are being replaced by risk-free rates, partly due to past rate-rigging scandals. In Europe, what is in itself a tricky conversion has been made even more complicated by the implementation of the wider EU Benchmark Regulation. Market participants must not delay in preparing to meet the transitional challenges as the deadline draws nearer.

Basel III, a regulatory framework designed with the goal of enhancing international financial stability in the aftermath of the global financial crisis, was tailored to banks in advanced economies. However, regulators in emerging markets and developing economies (EMDEs) are also embracing these standards, even though doing so may pose challenges to their financial development. How can Basel III be made to work for EMDEs? A new CGD Task Force report makes several recommendations.

The Central American nation of Costa Rica is regarded as economically sound, although rising government debt has raised alarm bells with credit-ratings agencies. Costa Rica’s financial industry is flourishing, and Banco BCT is at the centre of the action. With strong presence in Costa Rica and neighbouring Panama, BCT offers top-notch banking services. In our interview, Mr. Alvaro Saborío, CEO of Grupo Financiero BCT, provided insight into this financial powerhouse’s human-centred strategy.

The sub-Saharan Africa business boom has lost a lot of its momentum in recent years, but mergers and acquisitions have picked up the slack. All across the area, banks are merging as an avenue to improve their balance sheets and gain market share in the lackluster-growth environment. Although this approach may work to achieve some goals, there are downside factors that banks should consider before jumping into the M&A lifeboat.

With federal regulators becoming more receptive to large deals, bank merger approvals have sped up under the Trump administration. Although the anticipated merger activity volume has slowed relative to early 2019 projections, the fact remains that attention to detail in the execution of these combinations has never been more important.

Today, International Banker is joined by Mr. Olukayode Pitan, managing director and CEO of Bank of Industry, to discuss the financial inclusion in Nigeria, the country’s SME sector and the role that the bank plays in improving the economy of Nigeria. Very good to have you here.