Handelsbanken Shanghai
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Transcript of Handelsbanken Shanghai
www.handelsbanken.com/capitalmarketswww.handelsbanken.com/capitalmarkets
Handelsbanken Shanghai Helping your business succeed in China
19 April 2023
2
Long-term commitment- Founded 1871
- Oldest listed company on the Stockholm Stock Exchange
Total assets of SEK 2,154bn (Q4 2010)
Operating profit of SEK 14.8bn (2010)
Loans to the public of SEK 1,482bn (Q4 2010)
Higher profitability than the other major Swedish banks for 38 years running and most cost-effective universal bank in Europe
- Lower loan losses than competitors
More satisfied customers than other major banks*
High rating
10,850 employees
720+ branch offices worldwide- 461 branches in Sweden, 147 in other Nordic countries, 83 in
Great Britain and 32 in the rest of the world
Operating in 22 countries
Handelsbanken Group – a leading Nordic commercial banking group
*Source: Swedish Quality Index 2010
3
Banking in 22 countries
Global insight…
In other countries
Greater China - Shanghai, Beijing*, Taipei*, Hong Kong
India – Mumbai*
Singapore - Singapore
USA - New York
Malaysia - Kuala Lumpur*
Branches in our domestic markets
Denmark (53)
Finland (45)
Norway (49)
Sweden (461)
Great Britain (83)
The rest of Europe
Austria - Vienna
Estonia - Tallinn
France - Paris, Nice
Germany – Dusseldorf, Essen, Frankfurt, Hamburg, Mannheim, Munich, Stuttgart
Latvia - Riga
Luxembourg - LuxembourgThe Netherlands – Amsterdam, Het Gooi, Breda, Eindhoven, Rotterdam, Schiphol, Emmen
Poland - Gdansk, Poznan, Warsaw, Wroclaw
Russia - Moscow, St. PetersburgSpain – Marbella*
Switzerland - Zurich *Representative Office
4The history of Handelsbanken
In 1970 Handelsbanken started to focus on profitability rather than volume. The goal: Return on equity must exceed the average for other listed banks
Every year, Handelsbanken has achieved the goal of being more profitable than the average of other listed banks
This goal is to be achieved by the Bank having more satisfied customers and lower costs than its competitors
Stockholms Handelsbank is
founded
Listed on the Stockholm
stock exchange
Becomes Svenska Handels-banken
Purchases Skånska Banken &
Oslo Handelsbank
Purchases Stavanger
Bank in Norway
Purchases RKA which becomes Handels-
banken Liv
Purchases Skopbank in
Finland
Purchases Midtbank in Denmark
Purchases Stadshypotek
Purchases Bergens-banken in Norway
Purchases SPP
Livförsäkrings AB
Sells SPP to Storebrand
AS
Purchases Lokalbanken in Denmark
Handelsbanken’s goal
1871 1873 1919 1990 1991 1992 1995 1997 1999 2001 2002 2007 2008
5External rating Nordic banks
Handelsbanken
DnB Nor Bank
Bank Standard & Poor’s Moody’s FITCH
Long-term Short-term Long-term Short-term Long-term Short-term
AA- F1+
SEB A+ F1
Nordea AA- F1+
Swedbank A F1
Danske Bank A+ F1
Aa2 P-1
A1 P-1
Aa2 P-1
A2 P-1
A1 P-1
Aa3 P-1
AA- A-1+
A A-1
AA- A-1+
A A-1
A A-1
A+ A-1
6External rating European banksLogo Bank
Moody’s ratings for listed European banks
Long-term Financial strength
Credit Suisse
Handelsbanken
BNP Paribas
Banco Santander
HSBC Bank Plc.
Nordea Bank
Société Générale
Deutsche Bank
Barclays Bank Plc.
Danske Bank
DnB Nor Bank
SEB
Swedbank
Royal Bank of Scotland
Note: As of February 2011
KBC Bank
C+ Aa2
B- Aa2
B- Aa2
C+ Aa2C+ Aa2
C+ Aa2
Standard Chartered Bank B- A1
C+ Aa3
C+ Aa3
C A1
C Aa3
C- A1
C- Aa3
C Aa3
D+ A2
B Aa1
Credit Agricole
Banco Bilbao Vizcaya Argentina
Intesa SanPaolo
UBS
Commerzbank
Erste Group Bank AG
Lloyds Bank
UniCredit Bank AG
Bank of Ireland
Allied Irish Banks
C+ Aa1
B- Aa2
B- Aa2
C Aa3
C- Aa3
C- Aa3
C- Aa3
C- A1
D Baa2
D Baa3
7Customer satisfactionCustomer satisfaction in Sweden (2005-2010)
50%
55%
60%
65%
70%
75%
2005 2006 2007 2008 2009 2010
Handelsbanken Sector average
Sweden– Corporate market – best among the four big banks
– Private market – best among the four big banks
8
A strongly decentralized organization – the branch is the Bank
Based on the customer’s requirements – not individual products
Profitability always has higher priority than volumes
A long-term approach
We have branches where our customers live and are active
Local branches have overall business responsibility for their customers
No budgets
No bonuses for executive and senior management
Handelsbanken’s corporate philosophy Our way
9
President Hu Jintao shaking hand with Mr. Pär Boman, President and Group Chief Executive of Svenska Handelsbanken, in June 2007 at Handelsbanken’s office in Stockholm
Svenska Handelsbanken opened a representative office in Beijing in 1982 and became the first Swedish and Nordic bank with an office in China
Branch office in Hong Kong opened in 1988, today the only Nordic bank with a branch office in Hong Kong
Representative office opened in Taipei in 1990, until today the only Nordic bank with an office in Taipei
Branch office in Shanghai opened in 2005, once again the first Nordic bank with a branch office in China
In February 2009 Svenska Handelsbanken Shanghai branch became the first Nordic bank to be granted a RMB business licence
Svenska Handelsbanken is also the only Nordic bank with a leasing company in China
Svenska Handelsbanken is also the first Nordic bank to issue an off-shore RMB bond
Your local banking partner in Greater China
1030 years experience of banking in Greater ChinaHandelsbanken’s history in China
11
Handelsbanken’s presence in Great China Comments
Local presence
Handelsbanken currently has two branches and two representative offices in the Greater China region– The branches are located in Shanghai and Hong Kong
– The representative offices are located in Beijing and Taipei
In total Handelsbanken employs roughly 50 people throughout the whole Greater China region, with a mix of local and Nordic staff
Handelsbanken is full service bank and is one of only two Nordic banks that can lend in local currency and is the only Nordic bank that can offer leasing products
Beijing
• Representative office
• Employees: 3
Hong Kong
• Branch
• Employees: 26
Shanghai
• Branch
• Employees: 23
Taipei
• Representative office
• Employees: 1Branches
Representative offices
12
Payments
Domestic payments
Cross-border payments
Entrustment loans
3
Accounts
Local currency accounts
Foreign currency accounts
1
Internet banking
Global Online
2
Trade finance
L/C Guarantees Discounting of Bills & BAD
5
Treasury
FX spot FX forwards Deposits
6
Handelsbanken Shanghai services overview
Shanghai
Financing
Working capital loans
Fixed-asset loans
4
Leasing
Finance Lease
Operating Lease
7
13Accounts and internet banking
Foreign currency accounts
Current account (used for daily transactions)
Pledge deposit (cash collateral as security for guarantees, L/C etc.)
Capital account (used for registered capital injection)
Temporary capital account (pre-operating expenses – can be converted into capital account)
Representative office account
Offshore account (for offshore company’s settlement with China)
Escrow account
Local currency accounts
Ordinary account (for daily transactions, loans, call deposit and etc.)
Temporary account (handling of temporary operations)
Special account (used for special business related to governmental projects)
Term deposit account (term deposit of minimum CNY 1m as regulated for individual account)
Accounts
Note: 1) CNAPS is a local currency settlement system in China
1 Internet banking
Global online
Communication methods– Account information (balance/transaction enquires)
– Cross-border payments
– Domestic payments
Information in real-time for Handelsbanken accounts with internet available at any place in the world
2
14Payments/cash management and financing
Foreign currency payments
Incoming payments (e-port card needed for customs clearing for trade)
Outgoing payments
Domestic payments (only when payer and payee are the same company)
Payments are subject to documentation requirements according to Chinese foreign exchange regulations
Local currency payments
Credit vouchers
Cheques
T/T through CNAPS1
Entrustment loans
Only possible between sister companies
Payments and cash management
Note: 1) CNAPS is a local currency settlement system in China
3 Financing
Working capital loans
Short-term loans– Foreign and local currency
Long-term loans– Foreign currency
Fixed-asset loans
Short-term loans– Foreign and local currency
Long-term loans– Foreign currency
4
15
Treasury
Trade finance and treasury
FX Spot
Local currency vs. foreign currencies (i.e. SEK, EUR, USD, etc.)
Foreign currencies vs. foreign currencies
FX Forwards
Always local currency vs. foreign currencies (i.e. SEK, EUR, USD, etc.)
Deposits
Deposit rates fixed by Peoples Bank of China
Trade finance
Letter of Credit (“L/C”)
Export business– L/C advising, L/C confirmation, L/C discounting
– Bill discount (Bill includes shipping documents, packing list and etc.)
Import business– L/C issuing
– Bill discount
Documentary collection
Guarantee issuance (foreign and local currency) Bid bond guarantee
Advanced guarantee
Payment guarantee
Performance guarantee
Warranty/court/customs guarantee
Advanced payment guarantee
Rental guarantee
Shipping guarantee
Discounting of Banker Acceptance Draft “BAD”
Discounting of Receivables
5 6
16
Leasing
Leasing
Finance lease and operating lease
For new fixed assets investment – Cars, production equipment and machine etc.
For acquiring working capital based on the assets on your book through Sale & Lease Back structure
7
17
Process overview Comments
Entrustment loans
In China corporations can distribute and transfer funds within the group by means of entrustment loans
For RMB transfers there is no need to have locally incorporated holding companies
The transaction is based on a three-party lending agreement between the two sister companies and the Agent Bank
How it works
Cash rich Company A provide funds of RMB 5m to sister Company B through the Agent Bank
The Agent Bank collects interest of [x]% p.a. from sister Company B and transfer it back to Company A
– The interest rate should be based on the arm’s length principle
If the loan is still needed at the time of repayment a new agreement will be established between the two parties
Company A pays a commission fee to the Agent bank
Agent Bank
Company BCompany A
Loan agreement: RMB 5mTenor: 6 months
Fixed interest rate: [x]% p.a.
RM
B 5
m RM
B 5m
Ret
urn
Inte
rest
Collects Interest
18
Process flow overview
Discounting of receivables without recourse
A three party Frame Agreement is established between the Seller, Buyer and Handelsbanken
Buyer receive invoice or commercial draft from Seller
Delivery of goods takes place
Buyer sends an approved invoice or commercial draft, delivery confirmation letter and invoice confirmation letter to Handelsbanken Shanghai
Seller transfers the right of collection of the invoice or commercial draft to Handelsbanken Shanghai
Handelsbanken Shanghai pays seller the discounted purchase price for all approved invoices or commercial drafts
Buyer pays invoice to Handelsbanken Shanghai on the maturity date of the invoice or commercial draft
Buyer Seller
Handelsbanken Shanghai
1
3
2
4
5
6
3 6
4
5
2
1
19
Process flow overview
Discounting of Banker Acceptance Draft
Buyer and Seller establish a bilateral agreement (stipulating invoice tenor, price etc.)
Buyer uses its local bank to issue a Bankers Acceptance Draft “BAD” based on the two parties bilateral agreement. The BAD tenor cannot exceed 6 months according to PBOC regulation
The Buyer forwards the BAD to the Seller
Delivery of goods takes place
Seller transfer the BAD to Handelsbanken Shanghai
Handelsbanken Shanghai pays Seller discounted purchase price of the BAD
The Local Bank pays invoice to Handelsbanken Shanghai on the maturity date of the BAD
Buyer Seller
Local Bank
1
4
2
5
6
7
2
1
Handelsbanken Shanghai
5 6
7
3
4
3
20Forward exchange contract
A forward exchange contract or a “FX forward” is a binding contract to buy or sell a certain amount of foreign currency at a pre-agreed rate and on a certain future date
A forward contract is the easiest way of covering exchange risk because it locks in the exchange rate. This strategy mitigates one of the problems that customer experience when importing or exporting in foreign currency
In order to carry out a FX forward the customer need to advise the agent bank the amount, the currencies, the expiry date and whether customer would like to buy or sell the currency
Our minimum transaction amount is USD 10,000
Process flow overview
01Jan
Fixing price for buying USD and selling local currency
FX forward01 Apr
Buying USD
A company know that they will pay-out a dividend to its parent company in USD three months from now
By using a forward contract the company can lock in the CNY/USD exchange rate today
3 months
21Global On-line – the link to your international banking transactions
Direct online access to summarized account information for international accounts, both with Handelsbanken and with other banks
Intra-group transfers Make transfers between Handelsbanken
accounts and accounts with other banks
Make same-day transfers between Handelsbanken accounts in different countries with no loss of interest days
Payment orders in other countries Execute local payments and cross-border
payments from accounts in other countries
Payments can be made both from a local account with Handelsbanken or from an account with another bank in the country where you wish to execute the payment
Collaboration with international banks One point of contact for all your international
bank transactions
Graphic overview
22
Language
Contact details
Team member
Catherine GaoDeputy Branch
Manager
SpeaksMandarinEnglish
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Johan AndrénGeneral Manager
SpeaksSwedishEnglishMandarin
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Contact us – Handelsbanken Shanghai branchIrene Wu
Head of Financial Institutions
SpeaksMandarinEnglish
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Liisa VeijalainenSenior Account
Manager
SpeaksFinnishSwedishEnglish Mandarin
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Camilla SjöbergAccount Manager
SpeaksSwedishEnglish
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Joakim HedhillAccount Manager
SpeaksSwedishEnglishMandarin
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Jessica LiaoAssistant
SpeaksMandarinEnglish
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
Tina JinAssistant
SpeaksMandarinEnglish
Contact details
Telephone:+86 21 6329 8877
e-mail: [email protected]
23
Total investment and shareholder equity for WOFE in China
24Total investment and shareholder capital
Registered capitalOff-shore
debt
The registered capital is a function of the WOFE’s total investment size (see table above)
The remainder between the total investment and the shareholder capital is the company’s Foreign Debt Quota “FDQ”. This quota defines the maximum amount of off-shore debt a company can borrow
A company’s FDQ can be used for short-term and long-term loans
Note that usage of long-term loans will “eat up” the FDQ for good
On-shore debt
Graphic overview
Total investment
Registered capital, %
Minimum RegisteredCapital
USD 3mor less
70% N.A.
USD 3–10m 50% USD 2.1m
USD 10–30m 40% USD 5m
USD 30mor more
30% USD 12mShareholder’s equity at inception
Company Foreign Debt Quota
Additional on-shore external financing from banks in China
Total investment
On-shore debt unlimited