International News
Merrill Lynch and HSBC have set up a joint venture to create a global online banking and in-vestment services company.
Merrill Lynch and HSBC have set up a joint venture to create a global online banking and in-vestment services company.
The new company will start in the UK with Australia to follow around October this year
The two financail services heavyweights say the new company will be backed by up to US$1 billion in start-up capital and will be aimed at non-US clients with at least $100,000 to invest.
Under the terms of the deal, both group will take a 50 per cent stake in the venture which will be co-branded and based in London. The two will follow individual strategies within the US but hope the joint effort offshore will help in getting ahead of rival such as Citigroup.
The new venture will offer a range of products and services such as domestic and international equities dealing, fixed-income investments, money market accounts, managed funds and unit trusts. Other products on offer from the venture will include margin lending and access to a cur-rent account. Later, mortgages, bill payment facilities, credit cards and even options will be added.
While customers will have access to research, investments through the account will be self-directed and individual advice will not be offered.
The new operation intends to combine Merrill's investment research with HSBC's international presence and processing skills and hopes to capitalise on the growing demand for private bank-ing around the world.
The new venture will be aimed at a more affluent market than that already served by the fledg-ling hsbc.com business, focusing on clients with between $100,000 and $500,000 of liquid as-sets.
The service is expected to be rolled out in about 21 countries by 2004, about a year before it is expected to break even.
HSBC group chairman Sir John Bond says the driver behind the deal was "specifically designed to gain new customers for HSBC".
Both groups deny the move is a prelude to the full-blown merger that some analysts have pre-dicted.
Non-government firms will be allowed to invest in India’s insurance industry for the first time, under new Reserve Bank of India (RBI) guidelines.
Conditions will apply with groups needing a minimum of US$1.15 billion to undertake insurance business and with a cap on a bank’s equity in insurance joint ventures. The other eligibility con-ditions laid down by RBI are that the level of non-performing assets should be reasonable and that the entrant should have a net profit for the last three continuous years.
AXA SA, the French arm of the global AXA group, is to purchase the remaining 43.7 per cent share it does not own in UK life company Sun Life and Provincial Holdings (SLPH). The re-maining stake in the group is valued at US$3.68 billion and the deal follows a steep decline in SLPH's share price over the past year after its £3.4 billion acquisition of Guardian Royal Ex-change last year.
Mercantile Mutual’s Dutch parent company ING is to buy US life insurer ReliaStar Financial Corporation for US$5.1 billion, plus US$1 billion of debt. The deal will enhance ING's US in-surance and mutual-fund businesses in the US market where it has been keen to expand.
ING will finance the deal through internal means and has stated in the past it had up to US$13.7 billion to spend on expansion plans. The purchase of ReliaStar with US$38.4 billion of assets under management will make ING the eighth-largest insurer in the US, up from a previous ranking of 19. ING previously tried to purchase Aetna in a joint takeover worth $10.5 billion which fell through when Aetna shareholders rebuffed the deal.
Colonial First State is to sell its UK life insurance and pensions business to Winterthur, the in-surance arm of Credit Suisse Group, for $891million. Colonial's UK operation will now focus on growing its international funds management business, Colonial Stewart Ivory Investments, which was acquired by Colonial in March. At the same time Colonial Stewart Ivory Investments will retain a contract to manage £3.5 billion of life and pension fund investments for Winterthur. Winterthur has also entered into an agreement to distribute full retail investment products sour-ced from Colonial Stewart Ivory Investments.
Colonial has $98 billion in funds under management and the conclusion of the long-mooted sale clears the decks ahead of the imminent takeover of the group by the Commonwealth Bank.
UK based global bank Standard Chartered have bought Grindlays' Middle East and South Asian operations from ANZ for US$1.34 billion in cash. The deal will make Standard Chartered the leading bank in India, Pakistan and Bangladesh, and the second largest in Sri Lanka and United Arab Emirates.
AUTHOR
Jason Spits
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