Singapore is reforming its banking sector. Source: Wikimedia
Malaysia’s Maybank said it had held talks to incorporate its operations in Singapore, saying the city-state “is an important part of the bank’s strategy to continue growing its international business”.
“We have had ongoing consultations with MAS [Monetary Authority of Singapore] on the incorporation of our operations in Singapore and reaffirm our commitment to this,” Maybank announced. It added that it saw the tiny republic as a key market and an important gateway to the rest of Asean.
After operating in Singapore for 55 years, Maybank is considered by MAS as one of the city-state’s seven “domestic systemically important banks”.
These face extra supervisory measures, which include a requirement to locally incorporate their retail operations. Such a move will allow Singapore authorities to “ring-fence” retail deposits in Singapore should the parent bank run into difficulties.
Besides Maybank, the other domestic systemically important banks are DBS Bank, Oversea-Chinese Banking Corp, United Overseas Bank, Citibank, Standard Chartered and Hongkong and Shanghai Banking Corporation.
All have incorporated their retail operations in Singapore apart from HSBC which said it planned to do so. HSBC was among the four foreign banks on the list.
HSBC’s Singapore branch announced on February 5 that it planned to transfer its Retail Banking and Wealth Management (RBWM) businesses to a Singapore-incorporated subsidiary by May 9.
The transfer of the business units to HSBC Bank (Singapore) Limited is subject to regulatory and court approval, it said. If given the green light, the latter will oversee the running of the two business units.
HSBC Singapore branch’s move to subsidiarise its RBWM business follows the statement by the Monetary Authority of Singapore last April that HSBC was named on the domestic systemically important banks list for the city-state.
Guy Harvey-Samuel, HSBC’s Singapore CEO, said: “The transfer of our Retail Banking and Wealth Management business in Singapore to a locally incorporated subsidiary reflects the success, scale of growth and significance of our retail business in this market.”
Regulators around the globe are trying to ring-fence the retail operations of multinational banks to protect domestic customers.
Matthew Colebrook, head of HSBC retail banking and wealth management in Singapore, said: “Our customers remain central to HSBC and we will ensure that the transfer of customer accounts to the subsidiary is a seamless and largely behind-the-scenes process.
“More broadly, HSBC aims to be a primary bank for affluent and aspirant Singaporeans and those with international needs.”