The Future of Asian Banking - Volume 2

Crouching Tigers – the rise of Asian regional banks.

With overall revenues growing at an annual rate of 9% over the last three years, cross-border trade and financial flows continuing to grow, and financial strength and profitability at an all-time high relative to global levels, Asian banks are increasingly in a position to take advantage of the difficulties faced by Western banks and expand their presence internationally.

Oliver Wyman’s report, The Future of Asian Banking – Volume 2, estimates that Asian banks are not yet fully realizing this opportunity and are missing out on potentially $25 billion per annum in value from optimizing their regional and international strategies.

The report, the second in a series, finds three broad strategies that Asian banks can apply:

  • Customer Based: Following customers and customer flows - providing cross-border trade and transaction banking, treasury solutions,capital raising, and developing targeted wholesale markets capabilities
  • Liquidity Based: Exporting / importing liquidity - using domestic treasury capabilities to support offshore lending
  • Capabilities Based: Exporting / importing capabilities - through cross-borders acquisitions and partnerships

Regionalization is not necessarily right for every Asian bank.  A strategy to focus on the domestic market can be just as profitable (as will be seen in the forthcoming Volume 3).  For financial institutions that do get regionalization right, the opportunities are substantial.

The Future of Asian Banking - Volume 2