Assessing Hang Seng Bank

Topics: Subprime mortgage crisis, Bank, Collateralized debt obligation Pages: 6 (1191 words) Published: May 17, 2011
Hang Seng Bank

1) Technical skills
2) Personality
3) Innovative

All questions to be asked
i) Self Introduction
ii) List out some advantages and disadvantages of Hang Seng Bank iii) Mini bonds
iv) Financial Crisis in 2008
v) Current Market Trend in China
vi) An Animal to describe yourself
vii) Questions to ask when you are required to cook rice
viii) Nickname
ix) If only 3 out of 4 can stay, who should leave and why? x) Predict your own result after the personality test
xi) Difference between Hang Seng Bank and other Chinese banks

1. Self Introduction

2. List out some advantages and disadvantages of Hang Seng Bank Advantages:
i) Good public image Rooted in HK, Go to China (Not only focus only on business development, and also the CSR). My real experience Hang Seng School of Commerce

ii) 恒生成爲以市值計香港最大之本地註冊上市銀行. (From Management perspective) 本行之2009年成本對收入比率爲32.1%,在銀行界中屬最低之列。 (From Customers’ relationship perspective) Strong client bases in Hong Kong (loyal customers lasting relationship)

i) HSB has a strong reputation for his lasting relationship with the bosses of SMEs or other large corporate in HK (However, when the elderly bosses quit the companies, there will be some negative effects on its relationship)

ii) HSB focused on Greater China Region and HK so it cannot fully diversify the risks of doing business in these regions and leverage fully on the strong growth in the developing countries

3. Describe Mini bonds
A) The structure of minibond
B) What government authorities are doing after the collapse Lehman Brothers C) What victims are doing

The key dispute pts should be:
1. Should Ibanks issue structured products to not-that-professional investors? 2. Should the distributers, ie, retail banks do so?
3. Are the frontline sales reli understand what they are promoting? 4. Should SFC approve such kind of products?

CDO全名Collateralized Debt Obligation,中文名稱為抵押債務證券。由於其利率通常高於定存或是一般公債,故在現今微利時代中,一度成為國際間大行其道的投資商品。然而,隨 著美國樓市泡沫爆破,次級按揭違約大幅上升,CDO自去年起,變成了累及環球金融機構大幅撇帳的元兇。
CDO的結構可以說是「證券的證券化」。按揭銀行甚至乎一般企業,都可以把生息資產,如房屋按揭、汽車按揭,以至任何理應有穩定現金流入的資產,如收租物 業,組合包裝成按揭抵押證券(MBS)或資產抵押證券(ABS)出售,迎合風險胃納各有不同的機構投資者。有投資銀行更進一步,把不同年期和風險的MBS 或ABS,再組合包裝一次,就成為了CDO。

近日觸發本港逾百名投資者遊行及尋求當局協助的雷曼迷你債券,其背後的資產,便包括被美國一些學者視為「毒債」的CDO。 由於發行人倒閉,迷你債券要提早贖回。可是在這個市強行沽出作為抵押品的CDO,估計只能以低價出售,如果CDO是由雷曼發行(發售文件沒有詳細交代買 入的CDO對象),更可能百分百報銷,本港投資者就要承受重大損失。


Responsibilities for government:
但迷你債券背後其實有很多衍生工具,但證監審批過後 仍將之歸類為債券,不但誤導市民,連前線從業員也誤導了

SFC is at fault because they clearly didn't understand the risk, and supervise retailers to assert no misrepresentation on the sale..

財 政 司 司 長 曾 俊 華 昨 日 指 出 , 金 管 局 及 證 監 會 正 與 有 關 的 信 託 人 及 銀 行 保 持 緊 密 接 觸 , 該 兩 機 構 亦 保 證 , 會 迅 速 處 理 投 資 者 的 查 詢 及 投 訴 , 並 就 調 查 投 訴 期 間 的 觀 察 、 所 吸 取 的  訓 及 發 現 的 問 題 , 在 三 個 月 內 就 事 件 提 交 報 告 。

Responsibilities for frontlines:
從業員的銷售手法 證 監 會 亦 會 查 證 每 個 迷 你 債 券 系 列 的 發 行 商 及 其 顧 問 , 在 提 交 銷 售 章 程 和 推 廣 材 料 供 證 監 會 審 閱 時 , 是 否 未 有 披 露 任 何 理 應 披 露 的 事 實 、 事 項 或 情 況 。

Responsibilities for the distributors and retail banks:
Obviously they didn't run their due diligence and evaluate approprition on their customers.

4. Describe the financial crisis in 2008
Sub-prime mortgage is very popular losses and downgrade on related ABS and other structured instruments loss of confidence Risks flow back to the bank’s balance sheet Money market tightened Funding problems for banks

7th Sept 2008 government nationalized the Fannie Mac and Freddie Mac 15th Sept 2008Merrill Lynch get bankrupt, taken over by BOA
AIG partially nationalized
Lehman Brothers Fail
Goldman Sachs and Morgan Stanley become commercial banks

The main causes of financial crisis...
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