Republic factors Asia into plans
IN Hongkong, the words conservative and investment are not often linked, but Republic National Bank of New York is hoping its strong performance over the past three decades will more than balance its low-risk approach.
The bank's commitment to this philosophy was made very clear in an interview where the words prudent, safe and conservative were used on a regular basis.
Mr Kurt Andersen, executive director and regional general manager, said that while Asian investors had a higher appetite for risk, they were always aware of the safety and soundness of a financial institution.
''Yes, the investor in Asia does, from time to time, like a certain type of excitement but not with 100 per cent of his capital,'' he said.
Despite the staid image, it is difficult to ignore Republic's success.
With a heavy emphasis on deposit-taking, it has among the healthiest balance sheets and highest equity-asset ratios among the top US banks.
While Republic has private and retail banking divisions in the US, its operations in Asia are focused on private banking, money markets, trade finance and factoring.
Republic operates full commercial branches in Hongkong, Singapore and Tokyo and representative offices in Beijing, Taipei and Jakarta.
The bank's emphasis on growth in Asia was illustrated earlier this year with the appointment of two executives with experience in the banking sector.
Mr Richard Leung was named senior vice-president after working at Citibank where he was director of new products and head of treasury marketing while Mr Robert Chiu left Standard Chartered to head Republic's private banking arm.
The bank has ambitious plans for private banking in a market estimated to be worth $750 billion.
''There has been rapid wealth creation and accumulation, but it is still in an early phase,'' Mr Chiu said.
''The sheer weight of money will provide a great deal of opportunity for a safety-oriented bank and [Republic] is strategically positioned to capture the market.'' With increased trade between China and the US, Republic also has ambitious plans for its debt factoring business.
Mr Henning Kjeldmann, senior vice-president and general manager, said exporters did not have to worry about receiving payment because Republic bought the assigned receivables on a non-recourse basis.
Republic, which charges a fee of one to 1.25 per cent of total export value, also ensures importers are financially healthy.
Mr Kjeldmann said factoring was a new tool in China which had been received favourably by both exporters and banks.
He said Republic, which has earned a reputation as one of the world's leading factoring firms, hoped to sign a factoring agreement next month with a Chinese consortium, which would include a major Chinese bank.