Business Times - 04 Aug 2009
Singapore's evolution into a financial centre started way before it gained independence 44 years ago. JAMIE LEE speaks to three banks that have been in Singapore for more than a century
STANDARD Chartered Bank, known then as The Chartered Bank, was set up in Singapore in 1859, or 150 years ago.
The Chartered Bank not only financed the rapidly developing rubber and tin industries, it facilitated trade with China by dealing in the foreign exchange business with the Chinese. The bank was also authorised to issue bank notes until the end of the 19th century.
The bank's first branch was on Prince Street before it moved to Battery Road. The original classical styled building was designed by Swan & Maclaren, the oldest architectural firm in Singapore that also designed the famed Raffles Hotel and the Victoria Theatre and Concert Hall.
Business was disrupted by World War II when the Japanese seized control of the bank buildings.
When Singapore was liberated, the bank's staff returned to intact buildings emptied of equipment and furniture. So for a while, staff worked while sitting on the floor.
Also tapping the rubber industries was Citigroup. The bank - which started out as the City Bank of New York to serve a group of New York merchants - arrived in Singapore in 1902 as part of its expansion from America into parts of Asia and the United Kingdom.
Known then as the International Banking Corporation, the first American bank to be set up here was focused on trade finance. From its first branch at 1 Prince Street, the bank dealt especially with tin and rubber exports from Malaya.
Another legacy bank is Dutch institution ABN AMRO, which will mark its 151 years in Singapore this year.
Formerly known as NTS (the Netherlands Trading Society), the bank was started as a commercial enterprise to revive the Dutch trade in the region, following the opening of its first unit in Batavia, modern day's Jakarta, in 1826.
For a monthly rent of about $80, NTS ran its first office near Chulia Street on Boat Quay.
In 1865, the office moved to Collyer Quay and to the building's second floor, joining plenty of offices that were relegated up the stairs.
With plenty of stores occupying the ground floor to make up the shophouse trade - a point of nostalgia for many Singaporeans today - many offices were pushed one floor up.
Through its evolution into a full-fledged bank, NTS moved away from Collyer Quay, returned, before moving again to Cecil Street, at the corner of d'Almeida Street, in 1902.
The move was linked to NTS's heritage as a Netherlands bank. The site was known then as the 'Dutch Corner'. Other Dutch outfits that settled there included KLM, Philips, the Dutch Consulate General, and Nationale Handelsbank.
With Singapore's rapid development that earned it a reputation for using upgrading as a political carrot, the Dutch corner was lost as the site had to be vacated to make way for extensive renovations of the Singapore harbour.
In 1991, NTS - by then known as Algemene Bank Nederland (ABN Bank) - married Amro Bank to give birth to today's ABN Amro.
ABN Amro went through yet another merger in 2007, when the Royal Bank of Scotland (RBS) bought it as part of a consortium, putting most of its Singapore operations under RBS today.
With a keen eye on the new wealth created from Singapore's economic success, all three banks began tapping the consumer market - a move that was cemented after they were awarded the Qualifying Full Banking licence in 1999.
This allowed banks to expand beyond corporate banking into retail banking, jostling into the privileged space that was once the prerogative of the local banks. These banks' automated teller machines (ATMs) started sprouting across the island, while Singaporeans and residents here were presented with more choices from these foreign players.
Banks also began targeting the rich with wealth management services, such as preferred banking and concierge services for their top-tier customers.
Singapore will continue to be an important financial centre as banks expect more growth from business in the city-state, thanks to the country's efficiency and strong infrastructure.
'We plan to continue to invest in building Singapore into a key business and operational hub for RBS, supporting our chosen clients in the region in their investment banking, trade finance and cash management needs,' said Muhammad Aurangzeb, RBS country executive Singapore.
The rising influence of Asia will present a unique opportunity for the financial industry of Singapore, said chief executive of Standard Chartered Lim Cheng Teck.
'Customer profile is likely to broaden, not only in sophistication, but also in terms of geographical coverage,' said Mr Lim.
Citibank CEO Jonathan Larsen also expects Singapore to take advantage of the wealth accumulation in the economies of China, India and South-east Asia.
But the financial crisis had thrown the spotlight on the financial institutions - which, in the US, have been largely blamed for not watching their high leverage levels and for selling products to investors that were not as safe as claimed.
Products such as the Lehman Brothers' minibonds have since soured after the collapse of the investment bank, leaving many retail investors with nothing from their investments.
With recent guidelines outlined on fair dealing, financial institutions are now held to a higher set of standard aimed at protecting the interests of retail investors, said Mr Larsen.
'With more positive news on the global and domestic economic front, there has been an improvement in investor sentiment and return of risk appetite. Nonetheless, investor expectations have changed: investors are increasingly mindful of how they invest their money and are seeking a clearer understanding of investment products they buy,' he added.
Standard Chartered's Mr Lim noted: 'Following the recent crisis, financial regulators around the world are looking to enhance their financial regulatory systems.
'How these developments will play out for Singapore remains to be seen but the outlook for Singapore as a leading financial hub in the region remains strong. Financial institutions in Singapore are in good shape and well capitalised, and therefore well prepared for such challenges.'
Singapore's evolution into a financial centre started way before it gained independence 44 years ago. JAMIE LEE speaks to three banks that have been in Singapore for more than a century
STANDARD Chartered Bank, known then as The Chartered Bank, was set up in Singapore in 1859, or 150 years ago.
The Chartered Bank not only financed the rapidly developing rubber and tin industries, it facilitated trade with China by dealing in the foreign exchange business with the Chinese. The bank was also authorised to issue bank notes until the end of the 19th century.
The bank's first branch was on Prince Street before it moved to Battery Road. The original classical styled building was designed by Swan & Maclaren, the oldest architectural firm in Singapore that also designed the famed Raffles Hotel and the Victoria Theatre and Concert Hall.
Business was disrupted by World War II when the Japanese seized control of the bank buildings.
When Singapore was liberated, the bank's staff returned to intact buildings emptied of equipment and furniture. So for a while, staff worked while sitting on the floor.
Also tapping the rubber industries was Citigroup. The bank - which started out as the City Bank of New York to serve a group of New York merchants - arrived in Singapore in 1902 as part of its expansion from America into parts of Asia and the United Kingdom.
Known then as the International Banking Corporation, the first American bank to be set up here was focused on trade finance. From its first branch at 1 Prince Street, the bank dealt especially with tin and rubber exports from Malaya.
Another legacy bank is Dutch institution ABN AMRO, which will mark its 151 years in Singapore this year.
Formerly known as NTS (the Netherlands Trading Society), the bank was started as a commercial enterprise to revive the Dutch trade in the region, following the opening of its first unit in Batavia, modern day's Jakarta, in 1826.
For a monthly rent of about $80, NTS ran its first office near Chulia Street on Boat Quay.
In 1865, the office moved to Collyer Quay and to the building's second floor, joining plenty of offices that were relegated up the stairs.
With plenty of stores occupying the ground floor to make up the shophouse trade - a point of nostalgia for many Singaporeans today - many offices were pushed one floor up.
Through its evolution into a full-fledged bank, NTS moved away from Collyer Quay, returned, before moving again to Cecil Street, at the corner of d'Almeida Street, in 1902.
The move was linked to NTS's heritage as a Netherlands bank. The site was known then as the 'Dutch Corner'. Other Dutch outfits that settled there included KLM, Philips, the Dutch Consulate General, and Nationale Handelsbank.
With Singapore's rapid development that earned it a reputation for using upgrading as a political carrot, the Dutch corner was lost as the site had to be vacated to make way for extensive renovations of the Singapore harbour.
In 1991, NTS - by then known as Algemene Bank Nederland (ABN Bank) - married Amro Bank to give birth to today's ABN Amro.
ABN Amro went through yet another merger in 2007, when the Royal Bank of Scotland (RBS) bought it as part of a consortium, putting most of its Singapore operations under RBS today.
With a keen eye on the new wealth created from Singapore's economic success, all three banks began tapping the consumer market - a move that was cemented after they were awarded the Qualifying Full Banking licence in 1999.
This allowed banks to expand beyond corporate banking into retail banking, jostling into the privileged space that was once the prerogative of the local banks. These banks' automated teller machines (ATMs) started sprouting across the island, while Singaporeans and residents here were presented with more choices from these foreign players.
Banks also began targeting the rich with wealth management services, such as preferred banking and concierge services for their top-tier customers.
Singapore will continue to be an important financial centre as banks expect more growth from business in the city-state, thanks to the country's efficiency and strong infrastructure.
'We plan to continue to invest in building Singapore into a key business and operational hub for RBS, supporting our chosen clients in the region in their investment banking, trade finance and cash management needs,' said Muhammad Aurangzeb, RBS country executive Singapore.
The rising influence of Asia will present a unique opportunity for the financial industry of Singapore, said chief executive of Standard Chartered Lim Cheng Teck.
'Customer profile is likely to broaden, not only in sophistication, but also in terms of geographical coverage,' said Mr Lim.
Citibank CEO Jonathan Larsen also expects Singapore to take advantage of the wealth accumulation in the economies of China, India and South-east Asia.
But the financial crisis had thrown the spotlight on the financial institutions - which, in the US, have been largely blamed for not watching their high leverage levels and for selling products to investors that were not as safe as claimed.
Products such as the Lehman Brothers' minibonds have since soured after the collapse of the investment bank, leaving many retail investors with nothing from their investments.
With recent guidelines outlined on fair dealing, financial institutions are now held to a higher set of standard aimed at protecting the interests of retail investors, said Mr Larsen.
'With more positive news on the global and domestic economic front, there has been an improvement in investor sentiment and return of risk appetite. Nonetheless, investor expectations have changed: investors are increasingly mindful of how they invest their money and are seeking a clearer understanding of investment products they buy,' he added.
Standard Chartered's Mr Lim noted: 'Following the recent crisis, financial regulators around the world are looking to enhance their financial regulatory systems.
'How these developments will play out for Singapore remains to be seen but the outlook for Singapore as a leading financial hub in the region remains strong. Financial institutions in Singapore are in good shape and well capitalised, and therefore well prepared for such challenges.'
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