HK beats Singapore as Asian banking center

HK beats Singapore as Asian banking center

SINGAPORE (DPA): Hong Kong edged out Singapore as the most attractive location in the Asia Pacific for international banks to set up regional processing centers, a management consulting firm's report showed on Wednesday.

"Singapore and Hong Kong are by far the best," said Roman Scott, vice-president of Asia-Pacific financial services for Gemini Consulting.

It was Hong Kong's efficiency, the highest among the financial center surveyed, which undercut the city-state and rival finance center in the region.

The study focused on 12 major banks, including ABN-Amro, Citibank, JP Morgan, Merrill Lynch and Standard Chartered.

It looked at costs per transaction for foreign exchange, money markets, debt securities and derivatives trading.

Tokyo emerged as the most expensive of the four financial centers while Sydney enjoyed low costs and high trading volume but was weighed down by inefficiencies.

Scott said setting up regional processing centers to reduce cost and increase risk control has emerged among major revamps in operations after the financial crisis.

The cost of processing a financial transaction is driven by factors such as labor, rentals, volume leading to lower costs and business efficiency including productivity.

"Efficiency comes first, volume comes next, followed by location," Scott said.

"Given Singapore's advantages in location and that volume is mobile, Hong Kong's efficiency standard should be a target for Singapore banks to achieve or even surpass," the study said.

"Sydney, which enjoys locational and volume advantages, loses out because of lower productivity," it said. Locational costs are so high in Tokyo they cannot be completely offset by efficiency.