RBS set to cash in on Asia-Pacific transaction banking, trade finance

After restructuring its investment-banking arm to “markets” and “international banking” early this year, RBS is continuing to provide foreign-exchange, debt capital market (DCM), transaction and risk-management services. International banking will be in charge of trade-finance, payment and cash-services management, liquidity and deposits and loans.
RBS can bolster income from this region by providing DCM, risk-management and transaction services, Manfred Schmoelz, head of transaction services origination and network client coverage for Asia-Pacific, said yesterday.
In a press briefing, he said the crucial role in delivering healthy income to the bank would be played by trade finance in Asia and the Pacific because investment is expected to shift to this region from Europe and the United States.
Multinational companies are planning to expand in this region and the Thai government is using tax incentives to encourage foreign investment. Thailand is an exporting country. Both exporters and importers are exposed to risk from currency volatility arising from the debt crisis in the euro zone and the US economic uncertainty. Thailand should reduce its trade activities over there and shift to increasing trade in Asia, Schmoelz said.
RBS, a mostly government-owned UK bank, expects its transaction services in the region and Thailand this year to grow by 20-25 per cent thanks to the investment activities.
“We hope to maintain the growth rate annually,” he said, but added that volatility could affect this goal.
Asia-Pacific transaction services account for 17 per cent of the group’s total income. RBS will strongly promote its services to local companies with offshore investments and multinational companies that invest in Thailand and elsewhere in the region.
Even though the bank has no plan to add a branch in Thailand, it has hired about 60 staff to support customers especially local companies because the bank plans to expand the share of local companies with offshore investment.
Most of RBS’s customers here are international companies.
The market volatility is an opportunity for the bank to encourage customers to focus on payment and cash-management efficiency, Schmoelz said.
“We can support clients’ business growth in the region with services from markets and international banking [units]. The strong network in Europe can ensure that we can offer foreign exchange with a more reasonable rate than others.”