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complete confidence in the ability of the bank to settle their
trades on time and keep their assets safe and serviced.
VIETNAM
SRI LANKA
Though it has never again hit the heights it attained during the
commodity boom that ended in 2011, when it was for a time the
best-performing stock market in the world, the CSE still looks
good on a decade-long view. It has not, however, made anyone
rich in the last five years. Foreign investors continued to exit
Sri Lankan equities and government bonds throughout 2018,
sinking the currency as well as the stock market, and reducing
the transactional volumes that drive the settlement income of
the sub-custodian banks. Liquidity is so low that almost any sale
depresses the price, and IPOs have dried up. Disgruntled Sri
Lankan investors are not shy of calling for government interven-
tion to kick-start the market, because the underlying economy is
actually growing quite strongly.
Standard Chartered Bank
SCB is the unequivocal market leader here now, with more re-
sponses than its principal rival, scores up markedly and the best
outcome of any of the three foreign banks contending for direct
clearing and custody business here (See page 80 for scores).
These are considerable achievements in a dismal period for the
Colombo Stock Exchange (CSE).
Citi
Citi led this market a year ago, with its scores up for a second
survey in a row. Twelve months on, its scores are down sharply
and it cedes local leadership. But the detailed scoring yields a
nuanced picture in which exasperation with some issues (no-
tably account openings and closures) is combined with abiding
respect in other areas, even within the same service category.
(Citi is lauded for its handling of KYC inquiries when opening
accounts, for example).
HSBC
HSBC has been here longer than any other foreign bank and has
a substantial retail presence on the island to underpin its local
custody services when inbound business is less voluminous. But
it has failed to attract enough responses to be rated here. Weak-
nesses evident a year ago, especially in technology and value,
appear more marked this year. That said, respondents retain
Vietnam is one of the best performing markets in the MSCI
Frontier Markets Index, and the indexed investor who stayed
the course will have made money consistently throughout the
last 12 years, even after taking the 2018 sell-off into account. But
then this is a foreign direct investment (FDI) and export-led
economy that has grown at an average annual compound rate of
around 7% for 30 years. It has some obvious issues – a creak-
ing infrastructure, an ageing population and reliance on cheap
labour rather than an educated workforce and capital invest-
ment, plus a visible pollution problem – but the biggest is the
continuing influence of a one-party State. This is evident in the
mushrooming of non-tariff barriers. The challenge facing the Vi-
etnamese government is to take the risk of allowing the private
sector to get bigger.
Standard Chartered Bank
Last year, SCB tasted perfection here. The average scores are
not as good in 2019 but remain comfortably ahead of the op-
position. One respondent lavishes praise on the client service
(“highly professional and always demonstrate their strong
capabilities to service clients”), the account opening and closing
procedures (“Always explains clearly and supports clients to
fulfil all requirements ASAP”), and the regulatory compliance
process (“Keeps compliance documents in the systematic
way which helps clients go through compliance procedures
smoothly”) The pricing of the services also comes in for praise.
“Pro-active in reviewing the fees and make adjustments where
applicable and create a win-win strategy in terms of pricing,”
says one client.
Deutsche Bank
The German bank arrived in Vietnam in 1992 and remains proud
of the part it played in the development of the Hanoi and Ho Chi
Minh stock exchanges, both of which are still state-controlled.
Some specific issues in pricing and asset servicing apart, scores
are impressive (See page 80). “We find Deutsche Bank easy to
work with,” writes a client. “They are very responsive to our
needs and requests.”
HSBC
HSBC top-scored here in 2018, but the outcome this year is
less-than-good in all but three service areas. “HSBC requires a
lot of documentation and it takes them a long time to revert with
comments,” writes one respondent. The detail is encouraging, in
that clients confirm trades settle efficiently, entitlements are col-
lected, and assets are safe, but the bank really only outperforms
the local competition as a solid counterparty.
Citi
Citi returned to Vietnam in 1993 and launched a direct cus-
tody and clearing service in 2006, as it became clear that the
economy was on a sustainable growth path after the Asian Flu
crisis. The bank has too few responses for an accurate rating
this year.
Spring 2019
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