23 April 98
Foreign Private Banker
.....Typically Citibank has blown hot and
cold about Private Banking all the time with
a negative impact on clients.....
08 May 98
Entrepreneur
.....There should be opportunities for foreign
Private Bankers in Japan, once the trust
problem can be overcome. Would have thought
that Diners Club would be the way to contact
people: it has a better spread of owner/managers
and the wealthy out in the provinces where
people are relatively conservative and less
flighty than in Tokyo etc. Of course there
is the traditional attitude of honesty and
paying taxes on the nail among the more reliable
segments of the population. A steady retail
operation on-shore and a rather select operation
off-shore would be the business solution
most probably.....
11 May 98
Bank Planner
.....It is known that there is a number of
foreign banks active in aggressive Private
Banking and certain foreign lawyers/accountants
work on such off-shore schemes. The real
question is at what stage the authorities
move to deal with this. If the authorities
do nothing, then there is reverse discrimination
and a somewhat unsatisfactory situation.
If the authorities move on their usual arbitrary
basis and use the scandal pages of the newspapers
then there may be the making of diplomatic
friction - this would be the more serious
for the authorities as regards the US rather
than the European banks. The provisions of
the Inheritance Tax Act as regards limited
taxpayers and off-shore location of assets
are well known and it is quite possible to
drive a coach and horses through the tax
avoidance opportunities presented.....
18 May 98
Foreign Private Banker
.....At.....Citibank.....the emphasis has
switched away/remained away from off-shore
and the client base is serviced out of Singapore
and Hong Kong and there are increased efforts
to keep off-shore strictly off-shore. On-shore
solicitation of off-shore products will see
increasing restriction and difficulty. The
off-shore business presences in Japan are
likely to slower wither away. The overly
large representative offices will disappear:
there is already increasing use of the trust
bank office by those banks having the licence.
Instead everyone is looking at the on-shore
market in simple asset management products
with a degree of financial planning/financial
advisory thrown in for good measure. Citibank.....are
all cases in point where something is happening.....
21 May 98
Bank Planner
.....Certainly the general attitude to tax
and to the high level of discretionary judgement
preserved by the bureaucracy is surprisingly
passive.....The foreign banks tend to ignore
the nods and winks and rely on their interpretation
of the law. There is something of a double
standard operating which is not entirely
satisfactory. Citibank is supposed to have
around 5,000 customers but that is mostly
near-retail and is on-shore.....
27 May 98
Private Banker
.....Was originally with Citibank which has
been the training ground for so many Japanese
Private Bankers. People with get-up-and-go
got up and went to more attractive slots.....At
Citibank the mainstream product was the affluent
market and the gifting of US Treasury Bills
by parents to children as limited taxpayers
in the US: it was therefore possible to escape
both Japanese and US gift and inheritance
tax. The typical lot size was USD1m. It was
a kind of volume plain vanilla business.....
29 May 98
Foreign Tax Lawyer
.....Citibank has blown hot and cold on Private
Banking and switched between personalised
and retail also. A number of competent Japanese
have been trained by Citibank only to be
put on the street. Around half-a-dozen first
rate ex-Citibank professionals now form a
mafia and are working in a variety of foreign
institutions but still keeping in touch.....
19 April 99
Financial Planner
.....Finally there is the on-shore retail
market as exemplified by Citibank. However,
that is going to be hit by the universalising
Japanese banks that will compete powerfully
in the one-size-fits-all tradition of Japanese
domestic banking.....
20 April 99
Private Banker
.....Like so many Japanese private bankers
am ex-Citibank and benefit from the information
network: the NTA went into ....., not because
of a.....deal, but because of a Citibank
deal! The deal was done some five years ago
and was the responsibility of a.....staff
member when at Citibank at that time. There
were some very dynamic income tax and inheritance
tax avoidance structures thought up at Citibank
and there was a team of two that did the
work. It was the one that moved to.....that
got fingered. Curiously, the client reportedly
stayed with Citibank.....Citibank.....180
staff and the foreign market leader and heavily
into retail.....
23 April 99
Bank Planner
.....Currently the major banks are moving
to universal banking structures and will
eventually be able to offer a full range
of services. At present they have been allowed
into asset management via SIT sales. Teams
of private banking marketing officers are
being formed and with elementary financial
planning SIT products are being sold. The
next product will be in-house trust banking
products and then insurance products and
all the rest.....It all means that the Japanese
banks are going to become a substantial force
in the on-shore retail market and foreign
entrants such as Citicorp and.....could meet
stiff competition in the near future. There
will be near-supermarket financial institutions
for the moderately affluent.....
26 April 99
Private Banker
.....Citibank.....Continues to expand numbers:
recently hired the LTCB team of 10 with their
links to HNWIs via the old bearer debenture
market.....
26 April 99
Foreign Private Banker
.....Outlook for private banking is remarkably
poor: the Forex Act "liberalisation"
and the advent of the Big Bang round of deregulation
is meaning that:
- money that was mobile to go off-shore has
had its chance to go pre-April 1998 and that
window of opportunity has now closed, and
- the Japanese banks are going to present serious
competition in around five years' time.
The foreign players most exposed are Citibank.....:
there could be a nasty squeeze. The niche
foreign players did very well from say 1985
to 1998 and the implementation of the liberalised
Forex Act.....
28 April 99
Private Banker
....For the major Japanese banks, there is
a slow but very sure shift to universal banking
and five to ten years out Japanese banking
is going to look very different. As a result
of the current liberalisation the bank can
sell SITs.....The name that always comes
up is Citibank and often find oneself in
a competitive situation with Citibank.....Citibank
is reported to have 180 staff.....
30 April 99
Private Banker
.....The foreign banks are often in private
banking on a small team/experimental basis
and the only ones of note.....Citibank with
180 and a retail + personalised approach.....Citibank
appears to be semi-Japanese.....As usual
there appears to be a double standard in
place.....The foreigners are accustomed to
driving a coach and horses through MoF regulation
etc and have in the past been involved in
shipping money out of Japan as cash, bearer
bonds and even diamonds. The visit that the
regulatory authorities are paying to.....re
tobashi derivatives products and the visit
paid by the NTA to.....re private banking
are both shots across the bows that the foreigners
too must toe the line.....The common foreign
complaint that the line is not clearly defined
and bordering on the invisible/moves at the
whim of the authorities does not hold water.
The intention of the authorities is clear
and should be understood by everyone in the
business. We are all over 21.....The foreign
banks are currently making all the running
with their advertising campaigns: Citibank
with a variety of high yield derivatives
based products that are somewhat doubtful.....The
authorities seem to be adopting a double
standard again as these advertisements are
sailing quite close to the wind as a general
observation.....
11 May 99
Private Banker
.....Worked for thirty years for one of the major banks in Japan and also
overseas in a variety of responsible positions particularly with exposure
to asset management and trust product related. Was heavily involved in
private client work for Japanese resident in the US and, having developed
a wide range of contacts, decided to take a favourable early retirement
package and go independent at the beginning of this year.....Specialise
in off-shore corporate vehicles: either Direct Outbound Investment (DOI)
related asset management or off- shore/off-shore entrepreneurial activities
to generate off-shore assets. Some HNWIs are quite sophisticated, the owner/manager
type, but most are not.....A lot of the old money got out of Japan in the
easy days. A lot of the new money and much of the undisclosed money has
not: for some reason many people did not understand the full implications
of the liberalisation of the Forex Act that came into force from April
1998. The liberalisation effectively ring fenced Japan for the physical
transport of funds. These funds will eventually seep out in some fashion.....It
is true, and as so readily noticed by Analytica, that the location of the
office has, too, a slightly underground air to it in the centre of Toranomon
Itchome. The area from Itchome all the way down to Sanchome as far as Kamiyacho
is rife with underworld front organisations, bureaucrat amakudari slot
shadanhojin organisations and "flexible" lawyers. It is the physical
intersection of the world of the bureaucracy and the world of the politicians
with the gangsters as go-betweens and all lubricated with hard cash. For
off-shore private banking, it is not an inappropriate location.....It is
difficult to see what the foreign banks can bring to Japanese private banking.
In the declared economy they bring little in the way of edge at the end
of the day as it is now all on-shore. They are merely making the running
in the interim, while the Japanese banks universalise and eventually get
their acts together. In the undeclared economy, the reputational risk is
so great that they can never be a force.....
19 May 99
Foreign Banker
.....Made an extensive study last year
of
Japanese private banking prospects
and got
board approval to go ahead recently.....The
important thing is to have the integrated
approach of banking + investment +
patrimonial
services. The competition is the US
style
which is very product/profit driven.....:
Citibank.....One thing coming out of.....study
was the undesirability of being involved
in off-shore work: the NTA wants to
see a
firm on-shore orientation to Japanese
private
banking and then the market in the
long term
will also be on- shore - Japan is a
mature
economy with a stable political framework
and therefore there is no real need
for capital
flight per se.....
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