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has serviced more of the inbound investors than any other bank
offering a service here. Those that have responded to the survey
are not noticeably enthusiastic about the quality of the services
they receive, though scores in the market as a whole are relative-
ly low and UniCredit does perform better than average. Clients
are not concerned that the bank will lose their cash or securities,
or fail to settle their trades, or collect their dividends. They like
the staff they deal with, and their relationship managers, but are
looking for better account management, more information about
the whereabouts of their assets, the events that affect them,
and the risks they face. They would like lower prices and better
technology too.
M A R K E T S ]
Americas
Société Générale Securities Services
Société Générale purchased SKB Banka in Slovenia in 2001 and
merged it with its own operation in Ljubljana. Slovenia is an
attractive market for a universal bank to be in, since the standard
of living is high, and the economy is growing. Société Générale
added a direct custody and clearing service here in 2012, as the
exchange began to pick up. Though it is servicing international
as well as local clients, not enough of them have responded to the
survey to pronounce authoritatively on the quality of the services.
UKRAINE ARGENTINA
The rumbling conflict with Russia did not prevent the value of
the PFTS Stock Exchange – the leading Ukrainian Exchange
since the crisis of 1998 – climbing by four fifths in 2018. In
fact, it has risen steadily since a new government took office in
2016 and put an end to the prolonged uncertainty that followed
the Maidan uprising of 2014. The Ukrainian Exchange, which
jettisoned Moscow Exchange as a 43% shareholder in March
2016 – has also climbed remorselessly since. It will help that the
National Bank of Ukraine has announced a further liberalisation
of the currency regime, which previously banned repatriation
even of dividend income. The long-term prosperity of inbound
investors here lies in the ability of the government to com-
plete its reforms, and especially to liberalise the exchange rate,
restructure the financial system and clean up business practic-
es. The country is still not attracting much real direct foreign
investment, let alone portfolio investment. The unsustainable
boom of 2004-08, which at one stage saw foreign investors
active in this market offered a choice of no less than four foreign
sub-custodian banks, still feels like a country far away in space
as well as time. The Argentine Stock Market (MERVAL) has enjoyed a run
strong enough to be unusual among emerging markets since
exchange controls were lifted in 2015, but the absence of the
country from the emerging market indices until the middle
of this year has denied custodians the high levels of foreign
interest that drive investment in improved services. The country
dropped out of the MSCI emerging markets index ten years
ago, after the previous government-imposed exchange controls.
MSCI will not restore Argentina to its previous status until mid-
2019, which has inhibited foreign interest.
Raiffeisen Bank International
The Vienna-headquartered direct custody and clearing network
services clients active in this market via its local subsidiary,
Raiffeisen Bank Aval. The staff clearly do a good job for the few
clients which have responded, since the average scores in all
service areas fall somewhere between excellent and perfect.
Citi
The American bank top scored here last year. Twelve months on,
the outcome, based on a small sample, is little changed in gener-
al or in particular – though the 2018 weakness in asset servicing
has disappeared. Clients still see Citi as relatively expensive.
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Global Custodian
Spring 2019
Citi
Nobody thinks the giant American bank is at risk of losing their
assets here but, of the areas where Citi would expect to shine,
only technology is less than ordinary. A major client says that
Citi Buenos Aires “very slowly answers, openings always take
more time than expected. They need to improve the service.
We need always to chase for answers.” The detail yields a more
nuanced picture, in which settlement does fall short of the
high standards the bank sets itself around the world, but client
service and the management of cash and collateral fall short on
particular issues rather than in general.
HSBC
HSBC has a long and colourful history in Argentina dating back
more than century, which the commitment of the parent bank to
the emerging markets has only reinforced. The bank maintains a
visible presence here in consumer as well as corporate banking.
Unfortunately, it attracted an insufficient number of responses
to assess the quality of the custody services HSBC provides, but
those clients which have offered a verdict are not impressed by
anything except the people they deal, their ability to settle trades,
and keep assets safe and service them – and their ability to keep
their clients on the right side of the local regulatory regime.