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CLS update for the Turkish banking industry 16 November 2006. Rob Close President and CEO CLS Bank International. CLS today. CLS - The New Market Standard. Eliminates FX settlement risk Settles fifteen currencies Uses a payment versus payment (PvP) basis - PowerPoint PPT Presentation
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®
® CLS and the CLS Logo are registered trademarks of CLS UK Intermediate Holdings Ltd © 2005 CLS UK Intermediate Holdings Ltd.
www.cls-group.com
Rob ClosePresident and CEO
CLS Bank International
CLS update for the Turkish banking industry
16 November 2006
CLS today
CLS - The New Market Standard
Eliminates FX settlement risk
Settles fifteen currencies
Uses a payment versus payment (PvP) basis
Multi-laterally nets all obligations per value date.
CLS settles: FX spot FX forwards FX option exercises FX swaps
Only global settlement system
Bankers’ Bank for FX Settlement
Real-time links to Central Banks
Corporate structure and governance model
Legal governance and regulation
Level playing field for Shareholders
CLS Bank is Unique
Settlement Accounts with 15 Central Banks
Australia - Australia & New Zealand Banking Group • Commonwealth Bank of Australia • National Australia Bank • Westpac Banking Corporation • Belgium - Fortis Bank • KBC Bank • Canada - Bank of Montreal • The Bank of Nova Scotia • CIBC • Royal Bank of Canada • The Toronto-Dominion Bank • China – Bank of China • Denmark - Danske Bank • Nordea • France - BNP Paribas • Caisse Nationale De Credit Agricole • Credit Lyonnais • Société Générale • Germany - Bayerische Landesbank • Commerzbank • Deutsche Bank • DZ Bank • Dresdner Bank • Hypo Vereinsbank • WestLB • Italy – Banca Intesa • UniCredito • Japan - The Bank of Tokyo-Mitsubishi UFJ, Ltd • Mizuho Corporate Bank • Norinchukin Bank • Sumitomo Mitsui Banking Corporation • The Sumitomo Trust & Banking Co., Ltd. • Korea – Kookmin Bank • Korea Exchange Bank • Luxembourg – Dexia Banque Internationale a Luxembourg • Netherlands - ABN AMRO Bank • ING Bank • Rabobank Nederland • Norway – DnB NOR • Singapore - Development Bank Of Singapore • Oversea-Chinese Banking Corporation • United Overseas Bank • South Africa – Absa • Standard Bank • Spain - BBVA • Banco Popular Espanol • Banco Santander Central Hispano • Sweden - Skandinaviska Enskilda Banken • Svenska Handelsbanken • Switzerland - Credit Suisse • UBS • Zurcher Kantonalbank • United Kingdom - Barclays Bank • HSBC Holdings • Royal Bank of Scotland • Standard Chartered Bank • United States - American International Group • Bank of America • The Bank of New York • Bank One • Bear Stearns Securities • Citibank • The Goldman Sachs Group • JPMorgan Chase • Lehman Brothers • Mellon Bank • Merrill Lynch • Morgan Stanley & Co. • Northern Trust Corporation • State Street Bank and Trust Co.
CLS Shareholders
CLS – growing volume and value
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
100
125
150
175
200
225
250
275
300
Sid
es
se
ttle
d (
00
0's
)
$2.9 trillion daily($5.47 trillion peak day)
270,000 instructions daily(502,384 peak day)
Volume
Value
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06Jul-0
6
Aug-06
Sep-06
1000
1500
2000
2500
3000
Va
lue
($
Bn
)
Growing CLS participation
Growth in third parties
0100
200300
400500
600700
800
Nov-02
Jan-
03
Mar
-03
May
-03
Jul-0
3
Sep-0
3
Nov-03
Jan-
04
Mar
-04
May
-04
Jul-0
4
Sep-0
4
Nov-04
Jan-
05
Mar
-05
May
-05
Jul-0
5
Sep-0
5
Nov-05
Jan-
06
Mar
-06
May
-06
Jul-0
6
Banks: 261 Corporates: 21 NBFI: 33 Fund accounts: 435
September 2006Total:750
71 Shareholders, 57 Members, 26 Service Providers
CLS market share
40%FX
75-83% Interbank
95% Member to Member
CLS penetration – London and New York
Comparison with aggregated FXC and JSC market statistics for London and New York
CLS estimated market share for spot, swaps and overall market
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Mar
ket
shar
e
Spot Swaps Total
Oct-04
Oct-05
06:30 07:00
Fundingcompletion
Funding &settlement
Submitting Instructions
How CLS works - overview
09:00 12:00
CLS benefits
CLS perceived value
Operational Efficiencies &
Scale Economics
Risk reduction
Market growth support
Reduced funding
CLS perceived value by sector
Operational Efficiencies &
Scale Economics
Risk reduction
Market growth support
Reduced funding
Banks
Corporates
Pension Funds
Investment Funds
Hedge / leveraged funds
Prime Brokerage / Algo Business
BanksBanks
Banks
Corporates
Corporates
Pension Funds
Investment Funds
Prime Brokerage / Algo Business
Prime Brokerage / Algo Business
Hedge / leveraged funds
Hedge / leveraged funds
Growing FX volume from the fund industry
Average FX Trading Volume by Type
$96
$22
$41
$73
$81
$24
$27
$67
$65
$18
$26
$44
$0 $20 $40 $60 $80 $100 $120
Banks
Corporates
Fund Managers/Pensionfunds
Hedge funds
US$ (Billions)
2003
2004
2005
Source: 2006 Greenwich Associates. Based on a matched sample of 733 respondents. Figures are average annual volume per respondent.
Average foreign exchange trading volumes among fund managers and pension funds increased almost 48% from 2004 to 2005.
CLS facing the future
Today’s market – challenges and opportunities
FX is an asset class – increasing buy side participation
Programme trading growing but volatile
Hedge Funds and Prime Brokerage driving market growth
Strong growth in FX derivatives, e.g. NDFs & FX option premiums
Growth in emerging markets
Focus on cost reduction
CLS strategy overview
New Products – ∆ Value delivered
Increase participation
Grow volume
Reduce unit cost
Future growth areas for CLS
Fund management
Other buy side
Non-Deliverable Forwards
FX Option premiums
Other currencies
Conclusion
CLS is
The FX Standard
Delivering Benefits
Extending the Benefits
Focused on growth to reduce unit prices
®
® CLS and the CLS Logo are registered trademarks of CLS UK Intermediate Holdings Ltd © 2005 CLS UK Intermediate Holdings Ltd.
www.cls-group.com
Rob ClosePresident and CEO
CLS Bank International
CLS update for the Turkish banking industry
16 November 2006