the use of a bank nowadays
-
With influx of deposits in the interbank markets and concerns over the US economy, lenders are slowing down their credit growth. That is, when banks cut back on lending, banks will carry surplus funds. They cut deposit rates since they can't lend out much. You see banks choosing to pump their funds into asset backed loans, that is, property loans. You see DBS and Maybank advertsing their housing loans aggressively.
People see opportunities to convert their savings into USD currency, hoping to cash in when the USD currency appreciates. The trick asking what is the lowest pit, the time to buy USD? How long do we hold on to the USD currency?
-
Originally posted by johntoil:
Dear Firepig,
We will not call Hong Leong Finance a bank. It's a finance company unless you mistaken it for HL Bank, which is a Malaysian bank operating here in Singapore. HL Bank belongs to the Quek Faminly in Malaysia. Hong Leong Finance belongs to the another Quek Family in Singapore.
Being a Finance Co, Hong Leong Finance largely lend against assets, that is, they engaged in asset based lending. When borrower defaults, they can fall back on the assets pledged. I would not consider Hong Leong Finance weak financially.
same clan
-
same clan when their fathers worked together.
now, the next generation is hardly on talking terms.
Hong Leong Finance has been seeking for a banking licence for many years.
The Malaysian Quek managed to get hold of the Singapore bank licence by acquiring a Malaysian bank and rename it Hong Leong Bank. As a Malaysian bank, they waltz in for a bank licence and registered "HL Bank" in Singapore. That certainly peeved the Quek family in Singapore, though no fault of the Malaysian Quek.
Till this day, our Singapore Quek is still unable get their banking licence.
-
being a layman,
i have this wild thought how to improve the situation:
1. since banks IR so so low, why not put in overseas banks?
2. if there are overseas good banks able to pay more interest, can we lump together many people's money into 1 big sum and put into overseas banks that give more interest and earn more interest using a combined account?
But i worry that like this, local banks will go kaput.
but then again, if this happens the banks might react to retain the 'talents'.
-
Originally posted by ^tamago^:
the use of a bank nowadays is solely for salary credit.
do you think banks should offer more to the people who deposit their hard earned salaries into their banks for the bankers to invest ?so much money given to them for their choice of investments.
-
Originally posted by balance_else_complacent:
do you think banks should offer more to the people who deposit their hard earned salaries into their banks for the bankers to invest ?so much money given to them for their choice of investments.
since when nowadays do big companies put consumer's interestes before themselves? your inflation is not their problem. zzz. -
Originally posted by balance_else_complacent:
being a layman,
i have this wild thought how to improve the situation:
1. since banks IR so so low, why not put in overseas banks?
2. if there are overseas good banks able to pay more interest, can we lump together many people's money into 1 big sum and put into overseas banks that give more interest and earn more interest using a combined account?
But i worry that like this, local banks will go kaput.
but then again, if this happens the banks might react to retain the 'talents'.
Have you considered Foreign exchange risks? What about flexibility in repayment when using the domestic banking structure for domestic transaction purposes? And just because your aware of these existing rates doesn't mean that those are the only rates that the banks are offerring. In fact, banks do offer their premium or high net worth clients a better rate then the rest of the public. Thats capitalism for you.
On a side note, are you guys aware why the banks are actively selling their unit trusts? Its just a clever way to transfer their risks to the consumers as there are associated risks and costs involved in holding too much raw cash. What about the risks and returns of those supposedly "higher-yielding unit trusts"? Read the fine print carefully to find out the disclaimers they put into the contracts in order to cover their assess and bottom lines.
-
What i am amazed is :
1. regardless of IR, people still will have no choice but to put their salaries into the bank.
2. banks can give very low IR and still people have no choice but to put money into banks.
i am not sure if IR is set to 0.1%, will people still continue to support the banks in their investments ?
market forces? what if all banks do the same 0.1%?
-
Have you considered Foreign exchange risks? What about flexibility in repayment when using the domestic banking structure for domestic transaction purposes? And just because your aware of these existing rates doesn't mean that those are the only rates that the banks are offerring. In fact, banks do offer their premium or high net worth clients a better rate then the rest of the public. Thats capitalism for you.
On a side note, are you guys aware why the banks are actively selling their unit trusts? Its just a clever way to transfer their risks to the consumers as there are associated risks and costs involved in holding too much raw cash. What about the risks and returns of those supposedly "higher-yielding unit trusts"? Read the fine print carefully to find out the disclaimers they put into the contracts in order to cover their assess and bottom lines.
Generally, foreign banks [like SCB and Maybank] are prepared to offer higher rates attract more SGD deposits. Because they will usually go into inter-bank markets to borrow from local banks like DBS, which has the largest depositor base.
When banks sell units trusts? They largely earn fee incomes for selling the units trusts and managing the funds. For some banks, they don't even manage these unit trusts, but simply play the channel distributor for fee incomes. For example, they sell life insurance coverage for underwriters like Prudential and AIG. Thus, they don't 'transfer risks to the consumers'.
What is deemed 'high net worth' have been re-defined quite often. These days, private bankers defined people with surplus cash of $1m in bank account as too small to be their customers. Some banks also are reluctant to offer higher deposit rates for $1m or less.
-
Originally posted by johntoil:
Generally, foreign banks [like SCB and Maybank] are prepared to offer higher rates attract more SGD deposits. Because they will usually go into inter-bank markets to borrow from local banks like DBS, which has the largest depositor base.
When banks sell units trusts? They largely earn fee incomes for selling the units trusts and managing the funds. For some banks, they don't even manage these unit trusts, but simply play the channel distributor for fee incomes. For example, they sell life insurance coverage for underwriters like Prudential and AIG. Thus, they don't 'transfer risks to the consumers'.
What is deemed 'high net worth' have been re-defined quite often. These days, private bankers defined people with surplus cash of $1m in bank account as too small to be their customers. Some banks also are reluctant to offer higher deposit rates for $1m or less.
The insurance packages and the unit trust packages offered by the banks are different. I agree with you that the banks act as channel distributors for insurance products as these are mainly the forte of insurance giants like Pru and AIG, as you rightly pointed out yourself. However, unit trust packages are under-written and managed by the banks themselves and sometimes in collaboration with another financial institution. You can't lump all products provided by the banks under one arguement.
Unit Trusts underwritten and managed by banks: A way to earn revenue AND transferring of risks to consumers. Insurance products: Channel distributors and earning a fee income.
-
look at their interest return rate, bank = investment?? haha, that's a joke.
to me, bank = ATM, that's all
-
Originally posted by rafTiger:
look at their interest return rate, bank = investment?? haha, that's a joke.
to me, bank = ATM, that's all
Jus waiting for the day they charge for Atm use.... anything to make money will do...
-
The $1,000 you put in the bank, with 10% reserve requirement, will generate $9,000 worth of loans for the banks.
http://en.wikipedia.org/wiki/Money_creation
-
there is no better way of keeping money than putting it in the bank.
Any other form of investing your money is just trading along the risk/reward curve.
In other words, you're not getting better returns. Your EV should be exactly the same, just with corresponding higher real returns and it's coupled risk.
-
banks have better security wat
can dunnid put cash at home
anytime anywhere
what can loan shark do?
-
"Well, you loan your money to your bank and in turn, the bank loans them to your employers for their business needs and they pay you a salary. They charge a higher interest for loans as they are taking on more risk and give you a lower interest because the bank itself as a counterparty, has a lower risk. If you want to get better interest, you can loan your money to businesses directly by purchasing bonds/bills or even shares"
Most believe are made to believe what you had just said. To really find out how banks issue loans and make money, look at the following video.
http://youtube.com/watch?v=ThXpjmfyiMQ
-
I am beginning to suspect,
bank owners are the smartest people:
1. people just give and give them their salaries every month.
2. they just use this gigantic sum and able to afford the best to help them invest.
3. what does the boss need to do?
ha ha!
i think bank customers should find out how to get more value out of these investors.
-
Originally posted by whiskers:
Jus waiting for the day they charge for Atm use.... anything to make money will do...
already, for a long time, banks have been charging for atm use. like 50cents per withdrawal.good money.
-
Originally posted by gigabyte14:
banks have better security wat
can dunnid put cash at home
anytime anywhere
what can loan shark do?
anyone can offer this service as long as everyone put salary into his bank.
what is so difficult about that?
-
wow, what is the criteria to legally own a bank in sgpore huh?
I think it is the best business to run . It collects money like giro receiving monthly salaries from millions of people. Then, they hire some wise guy and do the investing.
I think the really smart in sgpore should combine their money together and form a bank. That is the retirement plan for the rich.
money controls the world.
what do you guys think of my logic?
-
Originally posted by fox_hound_33:
"Well, you loan your money to your bank and in turn, the bank loans them to your employers for their business needs and they pay you a salary. They charge a higher interest for loans as they are taking on more risk and give you a lower interest because the bank itself as a counterparty, has a lower risk. If you want to get better interest, you can loan your money to businesses directly by purchasing bonds/bills or even shares"
Most believe are made to believe what you had just said. To really find out how banks issue loans and make money, look at the following video.
http://youtube.com/watch?v=ThXpjmfyiMQ
Duh !! Thats not the gist of the statement.....
-
Originally posted by deathbait:
there is no better way of keeping money than putting it in the bank.
Any other form of investing your money is just trading along the risk/reward curve.
In other words, you're not getting better returns. Your EV should be exactly the same, just with corresponding higher real returns and it's coupled risk.
Depends on your temporal preference model actually.
Before one talk about risk/reward curve, one should consider if the interest rates can even cover the inflation rate.
Are you sure you learnt finance? Obviously you have no idea what you are talking about when you said,
"Your EV should be exactly the same, just with corresponding higher real returns and it's coupled risk".
You obviously haven't heard of MV despite spending so much money abroad.
It must have been a low profile university.
You should continue to put all your savings in the bank. According to you, the expected value (EV) will be exactly the same.
Now we now the reason for your failed analysis in all the threads.
-
Originally posted by balance_else_complacent:
already, for a long time, banks have been charging for atm use. like 50cents per withdrawal.good money.
-
Originally posted by maurizio13:
Depends on your temporal preference model actually.
Before one talk about risk/reward curve, one should consider if the interest rates can even cover the inflation rate.
Are you sure you learnt finance? Obviously you have no idea what you are talking about when you said,
"Your EV should be exactly the same, just with corresponding higher real returns and it's coupled risk".
You obviously haven't heard of MV despite spending so much money abroad.
It must have been a low profile university.
You should continue to put all your savings in the bank. According to you, the expected value (EV) will be exactly the same.
Now we now the reason for your failed analysis in all the threads.
the EV SHOULD be the same
SHOULD. In a perfect free market.
I'm not sure you took economics either.
And btw , my degree was in comp sci. I'm just working in the financial sector now. What's YOUR excuse for incompetence?
Btw, EV does not take in account retardation factors such as inflation. Do you even know what Expected value is? Anything above the risk-free interest rate carries risk for greater rewards. Investing is such an activity. Since when is there a written guarantee that you have to be able to break even with inflation? If that were the case, inflation would not be a problem at all.
No, I must confess your MV is a mystery to me. Perhaps you would like to enlighten me?
-
Originally posted by deathbait:
the EV SHOULD be the same
SHOULD. In a perfect free market.
I'm not sure you took economics either.
And btw , my degree was in comp sci. I'm just working in the financial sector now. What's YOUR excuse for incompetence?
Btw, EV does not take in account retardation factors such as inflation. Do you even know what Expected value is? Anything above the risk-free interest rate carries risk for greater rewards. Investing is such an activity. Since when is there a written guarantee that you have to be able to break even with inflation? If that were the case, inflation would not be a problem at all.
No, I must confess your MV is a mystery to me. Perhaps you would like to enlighten me?
MV = marginal value?