Viewing posts categorised under: Bank / Finance / Insurance

Credit Suisse Silently Invested $100M In Alibaba Subsidiary Ant Financial, Set To Benefit Immensely In Public Debut

by swisschambei in Bank / Finance / Insurance

Credit Suisse Group AG is set to reap the benefits of a secret investment it made in Alibaba Group Holding Ltd. (NYSE: BABA) subsidiary Ant Financial Services Group, as the latter goes public in Hong Kong and Shanghai, Bloomberg reported. The Swiss bank invested $100 million during the Chinese financial firm’s latest funding round in 2018, which brought Ant’s valuation to $150 billion, according to Bloomberg. Asset management firm Bernstein projects Ant Financial’s valuation to be $210 billion, a premium of 40% over Credit Suisse’s investment. The lender didn’t previously disclose the amount it invested in Ant and does not have plans to sell its stake, people familar with the matter told Bloomberg.

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China: Reinsurer Advises on Growth Strategy After Pandemic

by swisschambei in Bank / Finance / Insurance

In a recent interaction with the media, Swiss Re China CEO John Chen shared how China domestic insurers should catch up with the rest of the world in the post-pandemic era. “Chinese insurance companies should launch products and services with targeted and customised features to increase the insurance coverage rate during post-pandemic,” he said. According to Mr. Chen, the current challenges facing the Chinese insurance market include – economic recovery after the pandemic, changes in the underwriting cycle, the catastrophe protection gap under climate change, comprehensive reform of auto insurance, the sustainable development of health insurance and digitalisation. He mentioned that the lockdown of cities in response to the pandemic control has brought economic activities and business operations to a halt. This has led to economic growth falling into a gradual recession and global supply chains being hit. In terms of life insurance, he noted that the pandemic has led to the shrinking of the traditional channel of sales.

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Credit Suisse Wins Control Over Chinese Securities Joint Venture

by swisschambei in Bank / Finance / Insurance

Credit Suisse has taken a majority stake in its Chinese securities joint venture, granting it control for the first time over its business with the troubled Founder Group conglomerate. The Swiss bank joins a handful of other financial institutions taking advantage of an expedited opening of China’s financial markets, after years of slow, frustrating developments. Under pressure from the US to allow more foreign participation in domestic investment banking, asset management and insurance, China’s regulators have sped up reforms over the past two and a half years. Since then, UBS, Nomura, JPMorgan, Goldman Sachs and Morgan Stanley have secured majority stakes in Chinese securities joint ventures, or the regulatory permission to do so. Credit Suisse said on Monday that it had increased its shareholding in Credit Suisse Founder Securities from 33.3% to 51%, after receiving regulatory approval in April. The bank is injecting capital into CSFS, diluting Founder Securities’ stake.

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Digital Banking: Swiss Financial Giant UBS has Applied for a Virtual Bank License in Mainland China

by swisschambei in Bank / Finance / Insurance

Switzerland-based UBS Group AG, a global investment bank and financial services firm with around USD 1 trillion in assets, recently confirmed that it is planning to launch a digital banking platform that would reduce operational costs and stimulate growth. However, UBS said its plan depends on whether or not it can secure a digital bank license in mainland China. Edmund Koh, head of UBS’ Asia-Pacific division, says China’s framework digital banking guidelines should be available by June or July of this year. As reported by the SCMP, Koh is hoping that UBS’ virtual bank application (for a countrywide, majority-owned digital bank license) will be approved or at least move forward in some way. If UBS’ application is successful, then it will be joining Chinese tech giant Tencent Holdings’ and Alibaba Group Holding’s banking units in offering cost-effective digital financial services throughout China. Koh, who is planning to incubate the initiative in China and then launch globally, remarked “We need scale, and I’m going to get that scale for UBS, working together with the Chinese authorities.” Private banking has been a highly profitable sector of the financial services industry; however, cost-to-income ratios continue to remain relatively high (around 70-80%) as well.

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Swiss Giant Wins China Nod

by swisschambei in Bank / Finance / Insurance

Credit Suisse achieved a key milestone for its Chinese activities. The Swiss bank won regulatory approval to take a majority stake in Founders Securities, a joint venture it maintains in China, it said in a statement in Friday. Credit Suisse is the latest bank to rush in following the lifting of restrictions. “Credit Suisse will work closely with Founder Securities to make the necessary arrangements to complete the planned capital injection and related procedures,” the bank said. With the move, Credit Suisse’s holding will increase to 51 percent, from one-third currently. Last year, Chinese authorities said it will remove foreign ownership limits for securities, insurance, and fund management companies next year – one year earlier than planned. For Credit Suisse, this means developing onshore capabilities, the bank said. “We intend to continue to invest in this important market to bring our integrated capabilities and our comprehensive range of financial products and services to both domestic and international clients in China,” Asia head Helman Sitohang said.

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China Pacific to Discuss Buying USD 2 Billion Stake in Swiss Re

by swisschambei in Bank / Finance / Insurance

China Pacific Insurance (Group) Co. is in talks to invest at least USD 2 billion for a stake in Swiss Re AG as it seeks to build partnerships overseas, according to people familiar with the matter. Swiss Re would also spend USD 500 million to USD 1 billion for a minority stake in China Pacific as part of the deal, the people said, asking not to be identified because the information is private. Discussions are at an advanced stage and an agreement may be reached soon, though talks could still be delayed or fall apart, the people said. Swiss Re said in a statement it has been exploring a potential investment in a sale of new securities by China Pacific. No definitive agreements have been reached, and a deal would depend on factors including whether China Pacific decides to proceed with the offering, according to the statement.

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Swiss Re Partners with Tencent’s WeBank to Research AI Use in Reinsurance

by swisschambei in Bank / Finance / Insurance

Swiss Re’s Beijing arm has partnered with WeBank, an online lender owned by Chinese investment comglomerate Tencent, to research the potential application of new artificial intelligence (AI) models in reinsurance, according to Shine. The parties signed a Memorandum of Understanding (MoU) to cooperate on federated learning, a new encrypted and distributed machine learning approach that enables training for joint machine learning on decentralised data. Swiss Re and WeBank will work together to explore how the technology can help address the efficiency challenges imposed by data silos, where only one group in an organisation can access a set of data. WeBank reported that its AI team has already created an industrial-level open-source technical framework and developed federated learning standards to promote interdisciplinary cooperation. Swiss Re believes that the partnership will build a foundation for new business supported by federated learning, and will encourage the reinsurance industry to adopt further new framework to improve their technological capabilities.

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Swiss Re Signs Cooperation Agreement with China Pacific Insurance

by swisschambei in Bank / Finance / Insurance

Global insurance and reinsurance giant Swiss Re has signed a new Cooperation Framework Agreement with China Pacific Insurance (Group) Co., Ltd., deepening ties within the important country. Swiss Re has long highlighted China as the likely source of significant growth in insurance and reinsurance premiums for the firm and has been active there for many years. During that time the company has cooperated with Chinese domestic market insurer China Pacific Insurance a number of times, on initiatives ranging from education to specific parametric insurance products. This relationship continues today and Swiss Re has entered into a new cooperation agreement with China Pacific recently. The company told us it could not comment on the nature of the partnership, due to confidentiality in the client relationship. However, it’s assumed that the pair will continue to partner on certain opportunities in the Chinese domestic insurance market, helping Swiss Re to grow its revenue coming from that all-important marketplace. Swiss Re has previously said that China is the market driving insurance growth for the group of emerging economies, and that it sees huge opportunities in the country and region as a result of the Belt & Road initiative.

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