Wealthtech Luma Financial Technologies has opened an office in Switzerland and launched in the Europe market.

Luma is a multi-issuer structured products platform in the US. It has launched in Zurich to provide more firms access to its platform, which streamlines the process of using and creating structured solutions.

The Luma Europe office will be led by David Wood, managing director of Luma Financial Technologies’ international business. He holds 18 years of experience in investment banking and previously served as managing director at both Societe Generale and Barclays.

Wood also was part of the team behind Asian structured product platform Contineo, having served previously as a board member and chairman at the firm.

Furthermore, Wood will build a local team in Switzerland, focused on business development and client services.

“As a leading structured solutions fintech platform, we look forward to bringing our technology to wealth managers and private banks in Europe,” said Tim Bonacci, CEO of Luma Financial Technologies. “Having recently expanded our presence into Latin America and now Europe, we’re excited to help advisers on a global scale deliver a more predictable and transparent investing experience to their clients in the most efficient way possible.”

Wood said: “Luma is a high-quality, scalable platform that can be seamlessly integrated into buy-side infrastructure to deliver market-leading lifecycle services and consistent processes and controls. Luma’s focus on partnering with advisers to deliver better service has been key to its success and I am delighted to be leading its ambitions in Europe as it expands to meet the needs of clients around the world.”

Launched in 2011, Luma has helped advisers in the US and Latin America to learn, source, compare, create, price, and implement structured products. The platform is also fully interactive and customisable to match desired offerings, unique product approval, work flow, and certification requirements.

British banking major HSBC has set up a fintech subsidiary in Shanghai to scale up its business in mainland China.

HSBC Fintech Services (Shanghai) Company Limited is said to be the first fintech subsidiary opened by a foreign financial institution in China.

Situated in the Lingang area of the Shanghai Free Trade Zone, the venture will offer centralised technology and data services to HSBC Pinnacle Venture.

HSBC Pinnacle Venture is the banking group’s mobile financial planning service in China.

Through this service, HSBC targets clients outside the branch network, primarily for its private banking business in China.

HSBC Bank (China) president and CEO Mark Wang commented: “Fintech has been developing quickly in mainland China in the past few years which has enhanced its overall financial services capabilities.

“We believe technology can help provide better customer services, which can spur growth of the real economy.”

“The opening of HSBC Fintech reflects HSBC’s commitment to investing in mainland China and also our support to developing technology and innovation in the financial world,” finews.asia quoted Wang as saying.

The bank also launched the service’s first solution, which happens to be a corporate employee benefits proposition.

Digital platform will encompass financial planning, employee benefits as well as wellbeing platforms.

“Through this corporate platform, we hope to provide dedicated financial services traditionally available only to high net worth customers to corporate employees on a broader basis, creating positive commercial value for companies, and bringing mutual benefits to both companies and employees,” the publication quoted Trista Sun, vice chair of HSBC Insurance Asia Pacific and execute director of HSBC Fintech Company, as saying.

Swiss banking group Credit Suisse has launched a branch in the Saudi capital of Riyadh to expand its wealth management operations in the kingdom.

The move follows the receipt of a local banking licence by Credit Suisse in the kingdom in 2019.

The new Riyadh outpost will offer a range of wealth management services to Saudi Arabian clients.

These include foreign exchange and treasury products, account management and deposits, along with lending services.

In addition to these services, the bank already offers local and international trading capabilities and investment banking services, which these clients will continue to access.

Majid Al-Gwaiz will lead the Riyadh location as its CEO and report to Credit Suisse CEO of Middle East and North Africa Bruno Daher.

In the new role, Al-Gwaiz will be tasked with serving HNW and UHNW clients, family owned companies, government and government-related entities and Saudi corporations by developing local solutions and building upon business area initiatives.

Daher welcomed the latest development, calling Saudi Arabia a key growth market.

“Under Majid’s leadership, we look forward to building on and enhancing our current market position while providing an integrated banking experience for our high net worth individuals and institutional clients in Saudi Arabia,” Daher noted.

Credit Suisse entered the kingdom of Saudi Arabia in 2005, with its Middle East presence dating back to 1967.

Credit Suisse has flagged that it may swing to a net loss in the fourth quarter of 2020 (Q4 2020) after putting aside an additional $850m provision for a prolonged legal dispute in the US.

The case concerns municipal-bond insurer MBIA, with whom the bank had been engaged in a tussle since 2009 over a US residential mortgage backed security (RMBS) issued in 2007.

Credit Suisse had already booked a $300m provision over the dispute and last month said that it faces up to $680m in costs over the dispute.

Commenting on the decision, the Zurich-based bank said: “Although Credit Suisse previously set aside USD 300 million in provisions in connection with this case and continues to believe it has strong grounds for appeal, we indicated on December 1, 2020, that we would evaluate the need for additional provisions.

“This review is now concluded, and we expect to increase our provisions for the MBIA case and other RMBS-related cases by a total of USD 850 million.”

However, the bank intends to start its share repurchase programme on 12th of this month.

The bank also gave an update on its trading performance in December 2020.

It said that its wealth management operations reported stronger year-on-year transactional activity, mainly in Asia. This partially offset the adverse FX translational impact from the strengthening of the Swiss Franc and pressure on net interest income.

The bank further said that its investment bank “continued to perform well”, with 4Q20 USD revenues growing by over 15% from the previous year.

The latest provision comes on top of the $450m impairment it booked last November for a stake in alternative investment firm York Capital Management, which intends to wind down its European hedge funds business.

Credit Suisse, which took a stake in the investment firm in 2010, will take the charge in Q4 2020.

The bank is scheduled to post its Q4 20 results on 18 February 2021.

These provisions will affect the performance of Credit Suisse, which has shown resilience last year despite Covid-19 headwinds.

In Q3 2020, Credit Suisse reported a 38% year-on-year slump in net profit, missing analyst expectations, with the exclusion of a one-off gain that lifted prior year’s performance.

The bank’s net income attributable to shareholders was CHF546m in Q3 2020, compared with CHF881m a year earlier.

Premier Miton registered a 13% increase in assets under management (AuM) following the completion of its merger integration.

According to the group’s Q1 statement for the current financial year, Premier Miton recorded closing AuM of £12bn ($16.3bn) at 31 December 2020, a £1.4bn increase from 30 September 2020.

The growth is attributed to the net inflows of £166m during the quarter, alongside a strong market performance generating £1,213m. Equity funds and multi-assets funds were a large part of this, generating £737m and £355m respectively.

The latest unaudited statement of AuM comes as welcome news to the group, following a fall in profit during its first full-year results.

Commenting on the results, CEO – Mike O’Shea said: “It is pleasing to see a return to net inflows for the Group driven by positive flows into our equity and fixed income strategies. Unfortunately, we continued to see outflows from our multi-asset multi-manager funds although there has been a noticeable improvement in short-term investment performance.”

The merger between Miton Group and Premier Asset Management Group closed in November 2019 and cost the business £4.5m. Administrative expenses were £14.4m greater than anticipated. Consequently, the group’s profit before tax dropped to £9.6m from £13.7m.

Referring to the integration of the two firms, O’Shea continued: “I am also pleased to report that during the quarter, the final operational stages of the integration of the former Premier and Miton businesses were completed. This allows the Group to move forward with a single operating platform across our entire fund range.”

Coinciding with the closure of the Premier Miton’s financial period, the UK successfully managed to establish a trade agreement with the EU, which O’Shea hopes will “end the economic and political uncertainty around Brexit”.

O’Shea added: “This should be positive for UK equities, which have suffered an extended period of relative underperformance. Premier Miton has a range of top performing UK equity funds that are well placed to capture market share as investor interest returns to this area of the market.”

Looking forward to the future, Premier Miton will launch its Global Smaller Companies Fund on the 22 March 2021. Managed by Alan Rowsell, the new fund will further the group’s experience with small businesses across UK, US and European equities. Rowsell previously ran a similar fund at Aberdeen Standard Investments.

Over four-in-five (85.6%) of wealth management firms, financial advisors and other retail investment firms steered clear of the red during the pandemic.

This is according to data from the Financial Conduct Authority (FCA) that has revealed thousands of financial companies, including wealth management, on the brink of collapse after the COVID-19 pandemic.

Insights from the FCA revealed that by November 2020, 4,000 of the firms surveyed had low financial resilience and faced a greater risk of failure. Despite these figures, the data remained largely positive for the retail investments category, which had one of the highest numbers of profitable firms.

Sheldon Mills, Executive Director of Consumers and Competition commented: “At end of October we’ve identified there are 4,000 financial services firms with low financial resilience and at heightened risk of failure, though many will be able to bolster their resilience as and when economic conditions improve.”

Mills continued: “These are predominantly small and medium sized firms and approximately 30% have the potential to cause harm in failure.”

In response to the pandemic, the FCA has been monitoring the effects of the economic slowdown on firms’ solvency through rapid collection of data. Two surveys were sent out to 23,000 firms split by a 3-month interval, from February to June.

Explaining the significance of the survey, Mills commented: “We are in an unprecedented – and rapidly evolving – situation. This survey is one of the ways we are continuing to monitor the potential impact of coronavirus on firms. A market downturn driven by the pandemic risks significant numbers of firms failing.”

JPMorgan is reportedly in initial talks with China Merchants Bank to set up a Chinese joint venture (JV) in the wealth management space.

The bank is looking to launch an entity, further expanding its strategic partnership with the bank signed in 2019, according to Bloomberg.

While the two parties are yet to decide on the ownership, JPMorgan is not likely to have control, the people familiar with the matter told the publication.

The plan is not yet finalised and could also collapse, the sources added.

JPMorgan Asset Management and China Merchants Bank did not comment on the development.

JPMorgan’s China moves

In November last year, JPMorgan reportedly decided to almost double the number of private bankers in Singapore over the next two years, who serve rich Chinese clients.

The same month, JPMorgan raised its stake in its China securities JV to 71% from 51%.

Last June, the China Securities Regulatory Commission (CSRC), the country’s securities watchdog, cleared the application of JPMorgan to operate the first entirely foreign-owned futures business in the country.

In 2019, the company received the final regulatory approval to open its majority-owned securities JV in China.

China moves by other firms

The opening of China’s $53trn economy has tempted international banks to solidify their presence in the region and capitalise on the evolving financial space.

The Chinese financial market is anticipated to grow by $30trn in the next two years.

Recently, a Chinese unit of German banking group Deutsche Bank reportedly obtained a domestic fund custody licence, in the latest sign of China’s financial services sector liberalisation.

Last month, American investment bank Goldman Sachs signed an agreement to take 100% control of its securities JV in China.

In November 2020, Pictet Asset Management, the asset management arm of Geneva-based Pictet Group, established a unit in Shanghai in a bid to tap the evolving fund market in China.

Credit Suisse Group AG has announced the completion of its 2020 share buyback on 30 December 2020 for a total of CHF324,993,871 ($369m). Commencing on 6 January 2020, the firm repurchased 28,446,000 of its shares for an average price per share of CHF11.43.

The registered CSG shares were available for acquisition on a second trading line on the SIX Swiss Exchange, in order to repurchase the shares for the purpose of a capital reduction. Only CSG were able to purchase shares on the second trading line, via the bank mandated to execute the programme.

Sales of CSG shares on the second trading line were subject to Swiss federal withholding tax at a rate of 35 % on half of the difference between the repurchase price of the CSG shares and their nominal value. This was subsequently deducted from the repurchase price.

Ordinary trading in CSG shares remained unaffected by the second trading line. Any shareholder hoping to sell CSG shares was thus able to choose between the ordinary trading line or to CSG for subsequent capital reduction on the trading line.

Initially anticipating a share buyback total of CHF1bn, Credit Suisse suspended the programme in March 2020 due to COVID-19.

The bank shelved its buyback plans following calls from financial regulators to pause dividends and buyback programmes this year. Such efforts helped to preserve capital for use as a buffer from the pandemic-related shocks.

The repurchased shares were approved for cancellation by means of capital reduction at the firm’s AGM in 2020 and cancelled in July 2020. The remaining registered shares are expected to be cancelled at a future AGM of shareholders.

Based on the closing price of the CSG shares on SIX Swiss Exchange on 27 December 2019 of CHF 12.155, Credit Suisse were able to repurchase a maximum of 114m CSG shares. This figure represents up to 4.46% of the current share capital and voting rights of CSG.

As of 26 December 2019 CSG directly and indirectly held 124,632,322 CSG shares, corresponding to 4.88 % of the share capital and voting rights.