Standard Chartered's Next Worry: A $1 Billion Indonesian Loan - NYTimes.com

This is a tendentious article from today's New York Times, and undoubtedly covers only a piece of what is really going on.  Unfortunate for the bank, who probably are constrained about correcting any misperceptions here.  But also bad news in general for SCB and tough luck for fans of the bank's EM focus and strategy.

--Jan Cherim

Standard Chartered's Next Worry: A $1 Billion Indonesian Loan - NYTimes.com

The Hazard of Second Best | Het Financieele Dagblad

I want to applaud and draw attention to an opinion piece by Mohamed El-Erian which appeared (amongst other places) on FD.nl.  El-Erian points out, in the second part of the article, that the Nigerian Ngozi Okonjo-Iweala a (female) former Finance Minister and senior World Bank executive is far and away the most qualified candidate for the World Bank presidency.  If El-Erian is correct, even the US administration are embarrassed by the fact that Okonjo is head and shoulders more appropriate as a new WB President than the Obama nominee, Dartmouth President Jim Yong Kim.  The question is whether European countries have the guts and good sense to back the current groundswell swinging to Mrs Okonjo.

--Jan Cherim

The Hazard of Second Best | Het Financieele Dagblad

Beijing Considers Legalizing Informal SME Lending System

The article below appears in today's WSJ, Asian edition and online.  It reflects the Chinese government's preoccupation with boosting -safely- the flow of investment and lending to the vast SME sector across the country.  China has the world's largest "informal banking" sector, and they now are trying to get some of this activity out into the daylight, with the prospect of (light) regulation and perhaps some consumer/client protection.  Interesting stuff of significant relevance to other countries.

--Jan Cherim

14 Mar 2012 23:42 CST WSJ: Beijing Considers Legalizing Informal Lending System

   By Dinny McMahon
   Of THE WALL STREET JOURNAL

BEIJING (Dow Jones)--In a potentially major shift in how Beijing regulates the world's No. 2 economy, China's premier said officials are looking for a way to bring the nation's underground lending system into the light.

China's informal-lending system--a collection of small firms, wealthy individuals, loan sharks and others--has been crucial for the small businesses and rural areas often eschewed by the nation's major state-owned banks, which focus on lending money to big state-owned enterprises. Figures are hard to come by because such lending is unregulated and can be illegal depending on the terms. But UBS AG (UBS, UBS.VX) in October estimated it could be between two trillion yuan and four trillion yuan in total, or $316 billion to $632 billion, or as much as one-tenth of the country's gross domestic product.

Premier Wen Jiabao said Wednesday that authorities are looking at ways to make the informal-lending sector legitimate. His comments come as officials increasingly realize that despite repeated hectoring of state banks to lend more to small borrowers, the formal financial sector is ill-structured to fully plug the funding gap.

Wen said that China's central bank and the China Banking Regulatory Commission are considering launching trial reforms of informal lending in the Chinese city of Wenzhou, a city with a reputation as a center of private enterprise and informal lending.

"We should guide and permit informal capital into the financial arena, standardizing it and bringing it into the open, encouraging its development and strengthening its supervision," said Wen, who was speaking at a news conference marking the conclusion of the annual meeting of China's legislature, the National People's Congress. He also said that informal loans should have clear legal safeguards.

Wenzhou, in Zhejiang province, brought the funding pressures of China's private sector into sharp relief late last year when Beijing tightened monetary conditions, making it even more difficult for the city's small manufacturers to access credit or repay high rates of interest. More than a dozen business owners shut their factories and skipped town leaving their creditors behind, according to state media reports.

Wen's comments were in response to a question about Wu Ying, an entrepreneur in Zhejiang who was sentenced to death for "fraudulent fund-raising."

Wu, at one time China's sixth-richest woman according to Shanghai-based research firm Hurun Report, was found guilty after borrowing as much as 770 million yuan from private lenders whom she promised to pay an interest rate of up to 80%.

Sympathy for Wu has been widespread, partly in response to the extreme sentence meted out for an economic crime. "This incident reflects how the development of informal finance has still not adapted to the development of our economy and society," said Wen.

He added that the Supreme Court had issued a notice on the "careful" handling of informal-lending disputes and was "taking an extremely cautious attitude toward the Wu Ying case."

Economists say the scale of informal lending has recently expanded. Government efforts to tighten monetary conditions since 2010 spurred demand for loans. Meanwhile, many of China's savers and wealthy individuals saw lending out their money as a better investment than banks--which have long offered interest rates lower than the pace of inflation, meaning savers lose money by keeping their cash in deposits--and the stock market, which has been stagnant in recent years.

Now with the economy slowing, the government worries that investors in this unregulated area might lose their savings as borrowers default.

The process of legitimizing informal finance could involve giving existing underground lenders a license to operate as small-loans companies while imposing deposit collection and capital requirements. However, how that works in practice is likely to vary between areas.

Beijing, in efforts in recent years to get credit flowing to those parts of the economy that need it, allowed new types of financial institution to proliferate, including credit guarantee companies, pawn shops, small-loan companies, and microfinancing companies.

Technically informal finance refers to loans without the involvement of such institutions, such as lending between family and friends, between companies, by consortiums of people with excess cash, or underground banks.

But it can also include some of these new-style financial companies who often exceed their charter by collecting deposits and making loans.

(This story and related background material will be available on The Wall Street Journal website, WSJ.com.)

Hug your hairdresser

The Financiële Dagblad published an unfortunate league table earlier this week, naming and shaming the 100 worst-performing Dutch pension funds, as published by the Central Bank.  Pity your poor hairdresser: the Hairdressers Pension Fund came in dead last, underperforming the regulator’s benchmark by a hefty 24%, meaning that the fund, without repair, is only capable of covering some four-fifths of its pension obligations over time. 

What does this imply for your average 30-year-old girl with a tattoo, who washes your hair, listens to your issues with the kids, chats happily about the last vacation, and moans about their love life?  It is bad news, the more so as many of today’s young hairdressers probably don’t participate in the professional group pension scheme and, if they do, probably don’t realise in what dire straits the fund has landed.  Like most young people, ideas about retirement are infinitely distant: old folks’ problems. 

OK, most hairdressers (why?) seem to be young.  They have time to deal with their futures.  But still something bothers me about this.  The hairdressers seem to me a particularly vulnerable vocational group.  They don’t strike me as particularly financially literate, and neither it seems are their professional pension providers.  Is this a case for state intervention?  Maybe so, I’m not sure.  But in the meantime, do an extra colour shot, have a touch-up, a blow-dry, whatever.  Bring your spaniel in for a trim. The idea of an old-age hairdresser with neither her clients’ laments nor a basic pension as comfort does not strike me as fair.

-Jan Cherim

Amsterdam, February 2012

The lengthening road to Basel III

Speaking at a seminar organised by Financial Access for senior Indonesian bankers last month in Amsterdam, a Director of DNB (the Dutch Central Bank) argued that implementing the more stringent capital, liquidity, and risk management requirements agreed in the context of "Basel III" was an urgent business.  But not so urgent that a weak but quick and "politically achievable" deal should be agreed fast, just for the sake of showing rapid action.  The markets and analysts would see through this, and real progress in improving systemic stability would be hollowed-out in the process.  Much better, Paul Hilbers argued, to take a couple more years about implementing a set of measures with real bite.

Judging by what is now emerging, the MerKozy axis is listening.  Germany and France are apparently preparing a proposal that would phase compliance with Basel III over a longer period than initially mooted, allowing substantial breathing room to Euro-banks out to 2018 for the nastiest bits of the new rules (on ALM and funding/asset structures).  Isn't this introducing so much delay that the effects of the new initiatives are effectively killed?  The argument advanced is that the effect of the new regulation on bank lending and the "real economy" must be taken into consideration.  But by 2018 we could easily see a full credit cycle, a commodity boom and bust, or a European real estate slump that is only just starting to recover by then.  Surely the new rules make sense, and deserve real implementation pressure, or they are simply wrong, and don't?  Banking will always have risk; that's inherent in the function and healthy for the economy.  Does Basel III go too far?

The French and German banks clearly think so, and have raised sufficient noise in the right circles to get some heavyweight support.  The Dutch banks probably agree, but as usual have no grip on their regulators, who are trying to play 'best kid in the class'.

-Jan Cherim

Here is today's Financial Times scoop on the Franco-German initiative:
http://www.ft.com/intl/cms/s/0/7f8485a8-4500-11e1-a719-00144feabdc0.html#axzz1kH2YF4XU

Lazy Greeks and deja vu

As the Greek debt negotiations wheeze towards a (temporary) resolution with the banks, the former Greek finance minister and current energy minister George Papaconstantinou was in Holland plugging some Greek energy and export projects, as well as shoring-up support with the Dutch government for EU assistance. The Netherlands may not be big, he told the FD in an interview summarised in today's edition, but it is influential in EU financial circles particularly, and Holland is an important trading partner anyhow. Reason enough to drop by. But he had some other interesting observations about the current Greek problems which have wider relevance.

Credit crunch

Papaconstantinou notes that perfectly capable Greek exporters and domestic producers are being killed at the moment by the banking system's lack of liquidity and highly restrictive lending policies. Where have we heard this before? All through central and eastern Europe since 2009 the banks have not been doing their jobs, and the EU and multilateral DFIs see this (see the 'Vienna Initiative' as a response) but are not doing enough. The domestic Central Banks are not responding sufficiently (some can't) in these countries, and the already overreaching ECB's mandate is restricted to Euroland.

In the discussion about disappointing Greek economic performance this doesn't get enough play. Stimulus is needed, and the banking sector should be central to the efforts.

Lazy Greeks

The minister regrets that even mainstream European political parties seem to dabble now and again in national stereotyping -- e.g., the lazy, tax-avoiding, malingering Greek who doesn't deserve help. Seeking explanations for economic non-performance in cultural profiling is an old and long-discredited line of analysis. It reminds me of early development studies blaming African and Asian cultures and social structures for their 'backwardness'. The so-called 'Amoral Familism' of southern Italians was a famous academic version of this from the 1950s.

Papaconstantinou puts his finger on it when he points out that, statistically, the Greeks work at least as hard as anyone else. But the institutional structure of the country has failed, and if it can be reformed sufficiently actually to enable growth and production, then the current crisis may yet have a salutary impact. I am not sure how convinced he is this is achievable, but at least a lot of energy is going in this direction at the moment.

Rational debate?

The last point our visitor makes is that 'the debate in Europe could be a bit more rational.' He points to the large German and Dutch export surpluses with Greece, and other factors which undermine the dominant theme of one-way benefits traffic North-to-South. Rational public debate? This may be asking for too much. Although compared with the US Republican primaries, the debate here is serene and academic in tone!

-Jan Cherim

Read the FD article here:

‘Beeld van luie Griek klopt van geen kant’ | Het Financieele Dagblad

The “Vienna” Initiative 2.0 - serious business

When we read about bureaucrats, Eurocrats and Central Bankers getting together to discuss vague 'co-ordination' of banking oversight and regulation across Europe, the reflex reaction is a massive yawn. But there are truly serious things afoot. The Vienna Initiative was launched at the height of the credit crisis in order to avoid meltdown in emerging Europe's banking systems. Multilateral and European financing institutions co-operated with international banking groups present in the West and East/Central Europe to ensure adequate liquidity was available, to avoid a stampede for the exits, and generally to try to keep some credit flowing. While credit flows to the real economy in most of CEE were drastically run-down in the crunch period, the system didn't crash, and multinational banking groups like Italy's Unicredit and the Austrians were encouraged to support their CEE subs and branches in a period of genuine stress for those banks.

Two years on, we are hearing about Vienna 2.0 -- the Eurocrisis has spooked the markets sufficiently that, again, banking systems in CEE are suffering from seriously reduced cross-border funding access, and a new credit crunch threatens in emerging Europe (let alone the West), even before bank lending had really recovered from round one. In the Balkans, for example, credit growth was still positively anemic, with high levels of non-performing loans and difficult funding. This has taken another hit recently.

The role of the multilateral DFIs is critical in helping to ensure that Eurozone regulators and CEE regulators do not take measures so driven by local interest that life is made impossible for the cross-border banking groups still active in the region. It may be grey and obscure - but the wonks meeting in Vienna have serious work to do, and it deserves wider attention.

-Jan Cherim

Here is the World Bank's press release with full detail:

Europe and Central Asia - Special Meeting of the European Bank Coordination “Vienna” Initiative

Chinese banking problems, again

Interesting piece in today's WSJ Asia edition, detailing the way in which the Chinese regulatory agencies are trying to balance control on credit growth and off-balance sheet structures in the banking industry with softening the blow to the banks in the aftermath of the monster stimulus efforts.  Like always in China's case, the stimulus was executed in 'public-private' fashion, with the 'private' end -- the banks -- doing precisely what was required of them: lending big-time to local authorities and special purpose entities created to pump liquidity into the system nationwide.  This was remarkably successful.  But as with the round of 'privatised debt' to the state-owned enterprises of a decade ago, this will leave an NPL hangover of substantial proportions for the banks.  The CBRC and their political masters no doubt feel that a measure of regulatory forbearance is in order.  S&P, however, are unhappy about this.  The current situation is an interesting illustration of the tensions implicit in increasing openness in the banking sector, adherence to international standards whilst the system as a whole is still heavily guided by a not-so-invisible hand.

-Jan Cherim

Here is the full article from the WSJ's Dinny McMahon:

13 Jan 2012 07:40 CST China Acts Against Credit Risk --- Beijing Takes a Step to Keep Banks From Moving Commercial Paper Off Balance Sheet ---- By Dinny McMahon

BEIJING -- China's banking regulator took new steps to clamp down on risks in the financial sector, even as a report from Standard & Poor's said political considerations might force authorities to grant banks some leeway on loans to local governments. The China Banking Regulatory Commission on Thursday said it has told trust companies, which are lightly regulated investment vehicles, to stop selling investment products backed by commercial paper held by banks. The products allow banks to move the commercial paper -- a type of short-term financing for companies -- off their balance sheets, freeing the banks to increase the amount they lend even though they are still on the hook if the loans turn sour. Analysts say the total amount of these investment products is still modest, but the regulator is acting pre-emptively to prevent them from growing large enough to create potential instability. Analysts say Beijing, after spending much of the past year trying to bring prices under control, is likely wary of allowing banks to buck credit controls, even though inflation is falling. Data on Thursday showed consumer prices rose 4.1% in December from a year earlier, down from 4.2% in November. A report from rating firm Standard & Poor's Ratings Services, also issued Thursday, said regulators will likely allow banks to postpone recognition of losses on some local-government loans. While that might make a cosmetic improvement to bank finances in the short term, it could result in greater losses down the road and harm the sector's reputation, the report said. Starting in 2008, China's stimulus efforts in the face of the global financial crisis were led by the banks, with much of their new lending going to companies set up by local governments to help fund infrastructure investment. Since then, the banking regulator has been working to shore up the banks' capital base, repeatedly bumping up the amount of capital they need to hold on their books and trying to ensure that the banks are properly accounting for their risks. According to the S&P report, the political need to keep cash-strapped local governments afloat is now likely to trump the CBRC's commitment to scrutiny. "In the short term, extending the debt maturities to facilitate payments would . . . avoid a surge in nonperforming loans," the report said. "But it is also likely to undermine investors' confidence for some time to come . . . and highlight the CBRC's lack of independence from the government." Saying the move would be a "backward step," S&P estimated that such forbearance could reduce local banks' credit losses by as much as 80 billion yuan to 100 billion yuan ($12.7 billion to $15.8 billion) per year, assuming Beijing relaxes its standard for the next three years. The National Audit Office estimated last year that China's local-government debt totaled 10.7 trillion yuan -- the equivalent of 27% of 2010's gross domestic product. S&P estimates that about 30% of loans made to local-government financing companies could go bad over the next three years in the absence of public support. S&P's managing director for financial-institution rating in the Asian-Pacific region, Ryan Tsang, said he "can't say for sure" whether Beijing will go ahead with the regulatory relaxation, but that it is likely. The CBRC declined to comment on the S&P report. Meanwhile, the crackdown on trust products signals the regulator is unlikely to loosen its efforts to bring the informal lending sector under control. The move to stop trust companies from selling commercial paper is the latest effort by the regulator to ensure that risks don't start accumulating in the financial system without proper oversight. "At the end of the day it's a bank liability," said Standard Chartered economist Stephen Green about commercial paper. Trust companies occupy an unusual niche in China's financial sector. Less tightly regulated than other institutions, they operate more like hedge funds than anything typically labeled a trust in other countries. The trusts typically raise funds from wealthy individuals that they invest in many ways, including leasing, real-estate purchases and private-equity investments. The regulator last year cracked down on banks using trust companies to move ordinary loans off their books, requiring them to bring all loans packaged as trust products back onto their books by the end of 2011. "Trust companies then started looking for other ways to continue the business that wasn't expressly prohibited by the regulator," said Ivan Shi, senior associate with Z-Ben Advisors, a Shanghai-based consulting firm that tracks investment companies. He said the result was a shift into commercial paper. --- Natasha Brereton-Fukui, Rose Yu, Wang Ming and Eliot Gao contributed to this article.

Financial Access Newsletter No. 1 - January 2012

HAPPY NEW YEAR 2012!

Dear Friends,

Financial Access is pleased to wish all of you a happy, healthy, and successful 2012.  We wanted to take this opportunity, as the fireworks are still fresh in our memories, to take note of some of the more interesting highlights, initiatives and developments of 2011 involving FA, our clients and partners.  We expect more big bangs in 2012 and hope to co-operate happily with all of you in the New Year.

This is the first Newsletter of the year, but we’ll keep you up to date regularly going forward – also on our website, as well as the LinkedIn, Facebook and Twitter feeds. Do follow us!   

With our best wishes,

Financial Access

In this Newsletter:

v  FA launches NIFSEEP – a Public-Private Netherlands-Indonesia banking expertise exchange program

v  African initiatives – deals in East and West Africa, and a strategic partnership with African Century

v  Strategic partnership with NIBE – the Dutch banking and insurance training and certification group

v  Banking advisory deals in Africa, the Middle East, CEE and Asia

v  Sustainable Finance mandates pick up momentum

v  People updates

NIFSEEP -- The Netherlands-Indonesia Financial Sector Expertise Exchange Program

is a private sector initiative, designed and initiated by Financial Access and supported by the Dutch Government and program participants. NIFSEEP is aimed at the transfer of specialist knowledge and skills from the Netherlands to the financial sector in Indonesia.

At the time when the global financial landscape is rapidly changing, with on the one hand more regulation and supervision, and on the other hand promising opportunities arising in areas such as sustainable finance, renewable energy financing and SME Banking, NIFSEEP was created to share experiences and to develop expertise in these domains for Indonesian financial institutions.

The interactive knowledge transfer methods used, and the focus on applicability and implementation, position NIFSEEP as an innovative approach. By sharing specialised knowledge with banks, regulators and banking executives, NIFSEEP provides a platform to establish long-term business, client and partnership arrangements between the financial sectors of Indonesia and the Netherlands, with a focus on tailored training, advisory, financial, investment and other services. 

NIFSEEP consists of a number of seminars, roundtable discussions and workshops in the Netherlands and Indonesia. Full roll-out of individual training programs, advisory services and delivery of other banking services by the NIFSEEP participants to Indonesian banks will then commence at terms that will ensure the Program’s long-term commercial viability.

In late November and early December, an Executive Banking Forum was held in Amsterdam for 20 Indonesian financial executives in Amsterdam. Participants from the Netherlands included senior representatives from the Dutch Central Bank, FMO, ING Bank, ABN-AMRO, Unilever, Nyenrode University and NIBE-SVV, the Netherlands Bank Training Academy.  During the Forum, an MOU was signed between Perbanas, BARA, IBI, Nyenrode University, NIBE-SVV and Financial Access for the development of training and knowledge transfer programs for the financial sector in Indonesia.

As part of the NIFSEEP Program, Financial Access and the Dutch NIFSEEP corporate partners together with the National Banks Association (Perbanas), the Ikatan Bankir Indonesia (IBI), the Indonesian Risk Management Association for Banks (BARA), the Indonesian Institute for Banking Training (LPPI) and the International Finance Corporation (IFC), will host a Banking Seminar and a number of workshops in Jakarta in February 2012, to introduce new concepts and innovative solutions in a number of key banking areas in Indonesia.

For a 5 minute video-blog of the Amsterdam kick-off, follow this link. (Control+click to follow)

African Initiatives in 2011

Financial Access, in co-operation with African Century (see below), was awarded an internationally-tendered IFC contract to provide advisory services under IFC’s Africa Micro, Small and Medium Scale Enterprise (MSME) Finance Program to Bank of Africa Group (BoA) affiliates in Tanzania, Burundi, Kenya and Uganda. We will assist the BoA local operations to increase their lending and other non-lending services in the target segments.

We signed the contracts last August and in October and November we conducted initial market studies, diagnostic reviews of the banks involved and presented an Implementation Plan. We also will embed a Resident Adviser (RA) in each Bank over the implementation period, supported by short-term technical experts. We have agreed on a set of activities to be carried out in areas including (but not limited to) management information systems, credit risk management, product development, human resources development, and the review and upgrading of SME Banking policies, processes and procedures.

BoA Group is a pan-African financial services group established in 1982 supporting the expansion of financial services in the African region. The Bank is is represented  in 12 countries across Africa, specifically Kenya, Uganda, Tanzania, Burundi, Benin, Burkina Faso, Democratic Republic of Congo, Mali, Niger, Senegal, Ivory Coast  and Madagascar (as well as offices in Europe).  The Bank is keen to revamp their commercial activities to significantly increase its market share in the SME segment.

Financial Access will introduce a new monitoring methodology for the product development and rollout plan which will be used by all parties to track and evaluate progress on the project including profitability, volume of business and number of SME clients.  We also will also provide assistance with the feasibility, development, piloting, and rollout of several new SME banking products, e.g.  supply chain finance, mortgages, sector specific loans, and structured SME products which utilise alternative collateral and trade finance and treasury products.

IFC 

The BoA advisory assignment is linked to a several loan facilities IFC is providing the BoA Banks.

FA is also providing ongoing Trade Finance training to IFC-invested banks in many countries around the world.

The latest mandate in this program is for training sessions in the Comoros, Niger and Guinea.

In 2011 we also concluded a strategic partnership for African advisory and investment-related business with the Washington-based African Century Capital Group.

African Century has a powerful network of relationships across the region and we look forward to accelerating this collaboration in 2012, building on our co-operation in the BoA assignment.

Strategic Co-operation signed with NIBE- SVV

In August, Financial Access and NIBE-SVV, the Dutch banking and insurance training institution, signed a strategic co-operation agreement. The co-operation aims to combine the international banking advisory experience and skills of Financial Access with the financial training expertise of NIBE-SVV to develop performance enhancement and knowledge sharing initiatives for financial institutions in developing countries and emerging markets. 

Banking Advisory deals – selected highlights

v  E-Banking Advisory, Vietnam

In September, 2011 Financial Access advised Techcombank, one of the largest private commercial banks in Vietnam on the effective development of E-banking channels to improve client service and product distribution in the increasingly competitive Vietnam banking market. 

v  Structured Finance and Investment Banking Development, Kuwait  

Financial Access is currently advising and developing the structured finance and investment banking activities of one of the largest banks in Kuwait. Due to our involvement the bank has raised its profile in these areas and has recently won a number of leading project finance and fixed income mandates in Kuwait.

v  Valuation and strategic options for a Ukrainian Bank

FA advised the owners of a niche bank in Ukraine who required an operational assessment as well as valuation ranges for the bank in various scenarios.

v  Ongoing work for Bank South Pacific in Papua New Guinea

We continue to advise BSP, the largest bank in PNG, on a range of issues associated with retail banking, risk management and operations.

v  Advice to African Capital Alliance, FMO and other investment partners on a major Nigerian banking acquisition

For more than a year FA has been working with a consortium of private equity investors led by ACA and including FMO on the acquisition of one of Nigeria’s largest banks.  Advice has covered elements of due diligence, transformation planning, NPL management, as well as the disposition of various subsidiaries.

v  Sathapana Bank, Cambodia – IT procurement advice

FA advised Sathapana Bank, a private sector (micro-) lender in Cambodia, on the acquisition of  a new IT system and its applications to the bank’s operations.

v  National Bank of Fujairah, UAE – advice on non-performing loan (NPL) management

Training was provided to this major financial institution in the UAE on issues associated with their NPL portfolio, the approach to management issues in the Risk Management Department, and organisational implications.

v  Caixa Económica de Cabo Verde

With the support of an international shareholder, FA provided the first phase of advice to Caixa, one of Cape Verde’s most important local lenders, on credit risk management enhancements. 

Following the initial diagnostic phase, work will continue in 2012 on designing improved procedures and policies, as well as continued training to bank staff.

Sustainable Banking & Finance

v  AEGON Asset Management, Netherlands

During the summer of 2011, Financial Access advised AEGON Asset Management, one of the Netherlands’ largest life and pensions businesses, on the development of its global responsible investment policy.  FA was able to support our client in creating an approach that addressed its unique business mix, organisational structure and geographical footprint.

Our advisory work included the creation of a set of credible standards, conforming to UN Global Compact environmental and social benchmarks as well as international best practice in the area of governance, clearly to demonstrate the company’s ambitions to investment staff and stakeholders. The global responsible investment policy was launched publicly in November 2011.

v  Rabobank Group/De Lage Landen, Netherlands

Financial Access advised the asset leasing arm of Rabobank on sustainability trends within its client portfolio. This involved an assessment of best practices within sectors, and the activities of individual companies within each sector.  Through understanding the business and sustainability strategies across the business portfolio, the bank has been able to identify potential areas for business development with a group of priority clients.

v  FMO/Diversified banking operation, West Africa

Financial Access undertook due diligence of a West African bank of environmental & social management, and labour practices for a prospective investment by FMO. Looking into the sustainability trends in the country, the organisation of the bank and its core business activities, Financial Access was able to develop an action plan for establishing an environmental & social management system (“ESMS”) that meets the requirements of potential development finance investors and addresses the underlying sustainability issues in the country concerned. Through its assessment of the labour situation, and in discussion with senior management and labour unions, Financial Access was able to clarify labour issues within the bank and advise FMO accordingly.

v  Diamond Bank, Nigeria - ESMS

FA was mandated in December to assist Diamond Bank with the enhancement and implementation of its Environmental and Social (Risk) Management System.

Diamond Bank is one of Nigeria’s best regarded listed banks, with highly respected international shareholders such as the UK’s Actis and the Netherlands development bank FMO.  In common with other leading Nigerian banks and with strong Central Bank support, Diamond is seeking to be amongst the first African banks fully to implement international best practices in ESMS.

People  Updates

v  Alexander Issaev has joined us as Analyst and will be working on all areas of the firm’s business.  Alexander has investment banking experience with several major firms and has degrees from Bulgaria as well as the University of Amsterdam.

v  Rosa Sarkeyeva, who worked with us nearly from FA’s launch, has moved to a new challenge with Triodos Investment Management as investment officer for Central Asia.  We wish her all the best in this role.

v  David Yong, our Representative in Vietnam, has taken on an exciting new role as CEO of Andara Bank, Indonesia, a microfinance lender.  We look forward to working with David in his new capacity.

v  Watch this space: New partnerships are being developed to extend our presence and reach in Vietnam, Indonesia, Ukraine, the Gulf, and East Africa.  We’ll keep you up to date in future Newsletters.

BEST WISHES TO ALL FOR 2012!