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HSBC PHOTO

HSBC to bolster Asia private banking headcount, double client assets

HSBC aims to increase its Asia private banking headcount by two-thirds in five years and double client assets in eight as it eyes a bigger share of the business in the world’s fastest-growing wealth market, top executives said.

The lender’s private banking expansion plan in Asia, which accounted for 75 percent of group-level profit last year, comes as the unit that caters to the rich is focusing once more on growth after years of painful restructuring.

“Asia is the key driver for future profitability in the private bank … it’s been the driver for growth even through the difficult times and it’s always remained profitable,” Peter Boyles, CEO of HSBC’s global private banking business, told Reuters.

HSBC’s Asia private bank will add 700 people by 2022 from a headcount of 1,100 at the end of 2017. The increase will add staff in various roles including relationship managers, product specialists and family wealth planners, said Siew Meng Tan, Asia Pacific head of private banking.

HSBC’s global private banking business manages $330 billion (£253.69 billion) worth of clients assets, and Asia accounts for 39 percent of the total, making it the single largest market for the bank.

It also aims to double Asia-based client assets by 2025, in-line with consultant Capgemini’s overall wealth growth forecast in the region over the same period, as it expands its presence in the banking hubs of Hong Kong and Singapore and also vies for a bigger share of offshore Chinese wealth, Tan said.

Asia has emerged as the main battleground for global wealth managers, with higher economic growth, rapidly rising wages and a thriving entrepreneurial ecosystem producing rich clients at a pace faster than the western world.

Asia Pacific accounts for 34 percent of the world population of high net worth individuals, or those having investable assets of $1 million or more, and 31 percent of their wealth – ahead of North America, as per Capgemini’s 2018 wealth report.

Growth Mode

Clients with more than $5 million of investable assets are served by the bank’s private banking unit, while those with less than that threshold are taken up by HSBC’s retail banking and wealth management division.

HSBC’s private banking business had a torrid time following embarrassing data leaks in 2008 allegedly showing tax evasion by clients, prompting probes into the tax affairs of some of its Swiss account holders in a number of European countries.

The bank in 2015 admitted failings in compliance and controls in its Swiss private bank in the period up to 2007. It has since then taken significant steps to implement global standards and tax transparency initiatives.

The private banking unit, which brought in just over 3 percent of the bank’s adjusted global revenues in 2017, shrunk its footprint and exited some clients in the last few years as it sharpened its focus on compliance and profitability.

“We have done the repositioning work and we are now seeing net growth coming through because the drag effect from business exits has now diminished,” said Boyles, who took over his current role in 2012 and spearheaded the restructuring.

“We actually had a first year of growth for many years, both in assets under management and in net profit, in 2017. And moving into 2018 we have seen continued progress,” he said.

IT PHOTO

Italy’s next prime minister could be a mostly unknown law professor

Italy’s Five Star Movement (M5S) and Lega party have reportedly agreed on who the next prime minister should be — taking another step closer to implementing their governing coalition and restoring a political structure to the country.

Speculation is rife that M5S and Lega’s leaders, Luigi Di Maio and Matteo Salvini, have chosen a private law professor Giuseppe Conte as the new prime minister. Relatively unknown in political and public life, even Italian newspapers are publishing profiles and biographies on the professor to give the country’s voters the lowdown on their next possible leader.

The 54-year-old comes from the Apulia region of southeast Italy and graduated from La Sapienza University in Rome after studying law, before “perfecting” his studies at places like Yale, Duquesne, the International Kultur Institut in Vienna, La Sorbonne in France, Cambridge and New York University, according to a profile page.

But the Corriere della Sera newspaper stated that while Conte has “a very long curriculum (vitae)” he doesn’t “have a clue about politics.” The newspaper did concede that Conte “is certainly a technician” and has experience in business and administrative, financial and civil law. La Stampa newspaper added that he has been the director of “numerous legal journals.”

In addition, the paper noted that Conte is a member of the Scientific Committee of the Italian Notary Foundation, was a part of the Board of the Italian Space Agency and in 2013 the Parliament appointed him as a member of the Board of Directors of Administrative Justice.

Meanwhile, La Repubblica newspaper noted that Conte’s CV states that he is also an expert on “managing large companies in crisis,” which the paper noted “will be useful in events such as Ilva or Alitalia.” Ilva is an Italian steel company going through a pollution scandal and Alitalia is national airline that recently went bankrupt.

Conte has taught extensively in Italy and currently lectures in private law at universities in Florence and Bologna.

A friend of M5S

Conte’s name was initially flagged up by M5S just ahead of the election in March when the movement’s leader, Di Maio, stated that the professor would be nominated as minister for public administration and simplification (a ministry charged with simplifying laws and regulations) in any M5S-led administration.

During the election campaign, Di Maio had called Conte a “sburocratizzatore” — akin to a “de-bureaucratizer” — while Conte himself declared during the campaign that Italy needs to “abolish useless laws” (he said there were more than the 400 indicated by Di Maio) and that Italy’s anti-corruption laws need to be strengthened. He also stated that reforms to transform poorly-performing schools must be introduced.

Ahead of the election, Di Maio denied that a cabinet featuring experts and academics like Conte (and other professors then tipped to lead various ministries) would represent a technocratic cabinet, arguing instead that people like Conte “know what they are talking about,” Reuters reported.

Now, with M5S’ all-but certain coalition with the Lega party, Di Maio and Salvini are expected to present Conte as their candidate for prime minister, as well as a proposed cabinet formed of M5S and Lega ministers. They will seek approval from Italy’s President Sergio Mattarella Monday.

Salvini, leader of the anti-immigrant, euroskeptic Lega party, confirmed the deal over the leadership on Sunday, posting a message on Facebook stating, “We’ve closed the deal on the prime minister and ministers this morning.”

The Lega leader did not give the names of the candidates but Conte is expected to be premier with Salvini taking the interior minister post and Di Maio becoming a minister for economic development or labor (and a possible melding of the two posts), according to Italian newspapers. The economy ministry would reportedly go to Giancarlo Giorgetti.

Inconclusive election in March

Di Maio and Salvini’s decision to elect a prime minister rather than take the role themselves comes after a delicate process of negotiation in a bid to form a coalition government in Italy after an inconclusive election in March. Obstacles have been presented by political alliances and antipathies along the way.

M5S was the single most popular party in the election but Lega was the most popular party in a coalition of far-right and center-right parties, which included former Prime Minister Silvio Berlusconi’s Forza Italia party.

After multiple insults traded between Berlusconi and M5S’ Di Maio, however, a possible coalition between M5S and the center-right coalition looked unlikely, leaving Lega’s Salvini to take the lead and Berlusconi and other coalition partners seemingly out in the cold.

The alliance between Lega and M5S has yet to be tested, however, and could spell trouble for Europe with the maverick parties announcing Friday plans to increase public spending. They are also expected to call for an end to sanctions on Russia and want to renegotiate how much Italy pays into the EU budget — all plans that could create headaches for the European Union and euro zone.

Legere PHOTO

T-Mobile agrees $26bn mega-merger with Sprint

US telecoms giant T-Mobile has agreed to buy its rival Sprint in a $26bn (£18.9bn) deal.

The merger of America’s third and fourth largest mobile carriers is designed to create a more competitive firm with about 130 million customers.

However, the deal is expected to attract regulatory scrutiny over its potential impact on customer prices.

T-Mobile boss John Legere said the new firm would spend $40bn on building a 5G mobile network in the next three years.

It comes after months of negotiations between T-Mobile’s controlling shareholder, Deutsche Telekom, and Japan’s SoftBank, which controls Sprint.

Under the deal, Deutsche Telekom will own 42% of the combined company and control its board. Softbank will hold a 27% stake.

Mr Legere will lead the new firm which will take the T-Mobile name and have a market value of $146bn.

Analysts say the combined company would have more clout to compete with the first and second biggest US telecoms firms, Verizon and AT&T, each of which have more than 100 million subscribers.

In particular, they say it would be better positioned for America’s looming shift to next generation 5G mobile broadband technology.

They also believe that, without T-Mobile, Sprint lacks the scale needed to upgrade its network.

Competition concerns

Sprint and T-Mobile had been in talks about a potential tie-up since 2014, when the Obama administration scuppered a previous merger attempt over competition concerns.

Under the Trump administration, regulators have continued to challenge deals they believe could push up prices and are likely to scrutinise this latest takeover closely.

The US Justice Department is currently trying to block AT&T’s deal to buy US media giant Time Warner for $85bn, warning that “consumers all across America will be worse off” if it goes ahead.

It has also allegedly opened a probe into claims of co-ordination by AT&T, Verizon and a telecoms standards body to hinder consumers from easily switching provider, Reuters reported earlier in April.

In a statement, Mr Legere said the merger between Sprint and T-Mobile would lower prices and help the US accelerate its development of 5G, amid fierce competition from China.

He also said it would create tens of thousands of jobs in rural America – factors analysts say could help sway officials in the Trump administration.

“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own,” Mr Legere said.

Rosen Law Firm announces investigation of securities claims against Intel

Rosen Law Firm, a global investor rights law firm, announces it is investigating potential securities claims on behalf of purchasers of the securities of Intel Corporation (NASDAQ:INTC) resulting from allegations that Intel may have issued materially misleading business information to the investing public.

On January 2, 2018, news outlets reported that a significant design flaw in Intel’s processor chips could allow malicious software to read protected areas of a device’s kernel memory, causing Intel’s processor chips to be “vulnerable to hackers” “rais[ing] concerns about the company’s main products and brand.” Then, on January 3, 2018, Reuters reported that Intel’s CEO, Brian Krzanich, said “Google researchers told Intel of the flaws ‘a while ago.’” The Reuters article further stated that “Google said it informed the affected companies about the ‘Spectre’ flaw on June 1, 2017 and reported the ‘Meltdown’ flaw after the first flaw but before July 28, 2017.” On this news, shares of Intel fell $1.59 per share or over 3.5% from its previous closing price to close at $45.26 per share on January 3, 2018.

Then, on January 4, 2018, news outlets reported that Intel’s CEO sold millions of dollars worth of shares after Intel was informed of vulnerabilities in its semiconductors but before it was publicly disclosed. Intel’s CEO sold about half his stock months after he learned about critical flaws in billions of Intel’s microchips and now holds only the minimum number of shares he’s required to own. On this news, shares of Intel fell $0.83 to close at $44.43 on January 4, 2018.

Rosen Law Firm is preparing a class action lawsuit to recover losses suffered by Intel investors. If you purchased shares of Intel, please visit the firm’s website at http://www.rosenlegal.com/cases-1265.html or more information. You may also contact Phillip Kim or Daniel Sadeh of Rosen Law Firm toll free at 866-767-3653 or via email at [email protected] or [email protected].

Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm or on Twitter: https://twitter.com/rosen_firm.

Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Since 2014, Rosen Law Firm has been ranked #2 in the nation by Institutional Shareholder Services for the number of securities class action settlements annually obtained for investors.

Venezuelan authorities arrest six top executives from US-based oil company

Venezuelan authorities have arrested six executives from a US-based oil refiner, the country’s chief prosecutor has revealed.

Reports said authorities arrested Jose Pereira, the acting president of Citgo, a US-based and Venezuelan-owned refinery, during an event at state oil company PDVSA’s headquarters in Caracas. Five other executives from the company were also detained.

Reuters said prosecutor Tarek Saab said he was leading a crusade against “organized crime” within PDVSA. Since taking office in August, he has arrested around 50 oil managers in the widening corruption investigation, the news agency said.

Mr Pereira was promoted in April as interim president of Citgo, the US refining and marketing unit of the nation’s state oil company PDVSA.

Citgo owns three refineries and a network of terminals and pipelines in the United States.

He was previously Citgo’s vice president of finance. He replaced Nelson Martinez, who was named as Venezuela’s oil minister in January.

The news agency said that in the case of the Citgo arrests, Mr Saab said his office had uncovered a $4bn planned deal with foreign firms that would have seen Citgo “unfairly” indebt itself and even be offered as guarantee for the loan.

“This board of directors put Citgo in danger. That’s corruption, corruption of the most rotten nature,” Mr Saab said in a statement.

Citgo did not immediately respond to a request for comment.

President Nicolas Maduro’s government and PDVSA, which is formally known as Petroleos de Venezuela SA, have repeatedly vowed to take steps to combat corruption.

Yet opposition leaders say PDVSA has been crippled by poor management, corruption and under-investment during 18 years of socialist rule. They attribute the arrests to in-fighting among rival government factions.