Vesa Kalenius is the new Chairman of Board for the Finnish Business Council (FBC) as well as a corporate banker at Handelsbanken in Singapore, with vast experience of Asia. In these roles he can contribute to increasing trade and business both between the Nordic countries and Singapore plus Asia at large. FBC promotes investment over in Singapore and Scandinavian clients of the bank here generate more business also back there.
And for those who wonder how large Nordic banks actually operate over in Asia, Vesa can share many insightful details – including how they coped with the recent financial crisis.
Joined Handelsbanken in Shanghai
A Senior Account Manager, Corporate Banking, Export & Project Finance, he has been in Asia for over eleven years now, since moving to Beijing back in 1999 and then on to Shanghai in 2002. He started off with a Finnish bank in Beijing and ended up being transferred to a German bank in Shanghai, yet looking after the Scandinavian clients. Then, in 2007, he started with Handelsbanken in Shanghai and was moved to Singapore a year later.
This Swedish bank has been longer than any other Nordic bank in China (since 1982).
“We were the first Nordic bank to open a full branch in Shanghai by 2005. When I moved to Singapore we were just about to get the local currency license as well. So we are a forerunner of Nordic banking in China.”
“Basically I have two jobs; one being in charge of export and project finance business and the other one is to look after Finnish corporate clients in Singapore as well as Southeast-Asia.”
Export credit loans
“A typical export finance transaction would include a Nordic telecom company selling to an operator here in Asia. We don’t finance the telecom client per se; we finance the operator and they use the loan to buy equipment from Scandinavia. Then we typically get export credit risk support from export credit agencies – in Finland from Finnvera, in Sweden from EKN – and what they do is provide political as well as commercial risk cover. So we don’t take the full risk of the buying entity, but share the risk with an ECA”.
“In order for us to get involved with export credit transactions, the exporter must be from our regional banking markets, e.g the four Nordic countries or the U.K. These are the countries where we have street level branches serving both retail as well as the corporate sector.”
“Export credit transactions are typically fairly large,” adds Vesa, ”as they naturally require quite a lot of work and so forth. Usually these belong to large industries; telecom being one prime example, or heavy industry machinery such as cranes, power plants, etc. which Finland is specialized on. Naturally, the paper sector is also one of these as this is what Finland is very famous for.”
Then there are Scandinavian companies setting up operations over here and becoming customers of Handelsbanken Singapore branch.
“Scandinavian companies present in this region are usually also our clients back home. If they want to get financing locally, the way we work in Handelsbanken is as follows. We have a branch in e.g. Finland which handles the overall relationship with the company’s head office and holds a total loan exposure limit with it. Then this branch assigns a part of this limit to us and we provide financing for the Singaporean entity. This way we can provide the Singaporean company pretty much the same pricing as the head office gets but our risk is still confined back in Finland and on the head office. In addition to that, we have a few Finnish clients whom we are working with only in Asia and generate some business that way as well. By helping them here we’re using Asia as way to get to do business with them also back home.”
“Also, in Singapore with so called local mandates we can do financing for fully local companies. These are typically large scale blue chip corporations in Singapore. This makes us slightly different compared to other Nordic banks which are doing strictly Nordic-related business. Yet, our mandate is limited to certain large, well rated companies and institutions.”
Planned expansion halted
It is well-know by now that the most recent global financial meltdown did not affect Asia too much. Handelsbanken, being a conservative bank became even more careful during that period – perhaps too cautious in Vesa’s perspective from over here. In hindsight, the bank lost some good opportunities here due to being cautious.
“Even though we did well during the crisis and most of Asian countries grew pretty well even in 2009, it was not a particularly happy period and luckily now things are much more vibrant. It’s still much more fun to work in an environment where things are moving forward than when you have to really be concerned about tomorrow,” thinks the Finn.
“Surprisingly, some banks, we thought would not survive, are back in business again. Definitely there is much more business to be done at the moment; companies are back investing, selling and planning for future expansions.”
As for increasing the operations in Asia Vesa, who deals a lot with the countries in the region, says that they are naturally looking of ways to do more and more all the time.
“We had actually planned to expand to new countries before the crisis, yet these plans are now put on hold. Personally I am more positive towards Asia after being based here for a long time and on everything I see here. But Asia is still relatively marginal for us and we naturally try to grow first on the markets we know very well. And then gradually move towards areas which are further away from home markets but where we see more and more Scandinavian investment and interest.”
FBC is useful
When Vesa visits Finland he also promotes FBC and its mission, which is perhaps broader than many other business associations: to promote trade between Finland and the various countries of Southeast Asia.
“Whenever I’m in Finland I always mention FBC to clients and friends. And my work relates that I have to sell Singapore and the whole of Southeast-Asia to Finland as well. Then, we also try increasingly to keep more contact with the other chambers and business councils within the area just to get more coordination and more info on what they are doing. As you can find FBC in at least most capital cities in Asia, these should be utilized more because there’s a lot of information that you can find when e.g. setting up business there, What I would do if travelling for the first time in Asia, would be to check if there is FBC as well as Finpro and get as much info from these guys as possible both on business and leisure side. It’s something we have been discussing within FBC and with Finpro that we should try to get slightly more coordinated in Asia.”
Here in Singapore it is fairly easy to get information on pretty much everything, but take for example China where this is much more difficult. During my time there I saw so many companies that could have avoided a number of mistakes just by contacting for example FBC, Finpro, me or somebody who has been in the area somewhat longer. They encountered exactly the same problems as companies had many years ago, and why!? It’s a waste of money, time – everything. Why did not they just call and ask for advice! Even the competitors – they will naturally not give you trade secrets or such – are usually willing to advice whom to contact, how to do this and that, etc.”
More SME’s and individuals join FBC
Singapore is still fairly important for Finnish companies. FBC celebrated its 25th anniversary last year and Vesa has compared the number of members with 25 years ago. “The amount is almost the same today, which means that even though Singapore in some respect is losing its importance of being the Asian centre, because now people are setting up almost everywhere – or many concentrating their operations to big markets such as China – they still have their offices left here, so it hasn’t really lost in that respect.”
“The trend is that FBC is now getting SME companies within the IT Sector, environment sector and so on, which is good to notice. In addition, we are gaining more individual members; both who work for Nordic companies and as well as for foreign companies”.
“What makes Singapore good is that it has very good banking, legal setup and infrastructure etc. and everything work well. Then another side is that it’s a very good hub. It’s easy to travel around; everything’s relatively close by. I’m in Hanoi in three hours and in India in less than five.”
Personally Vesa and his family have no specific plans or dates to move on.
“For the time being I like Singapore very much, both living- and family-wise. The work has been very rewarding in Asia and on the personal side, e.g. education for the children is good and the city is very safe and has little pollution problems. I never ever would have stayed so long in Asia if the work would not have been so interesting. Things are happening all time. Yet, I like China, especially Shanghai, and I wouldn’t mind moving back there sometime. There is more buzz, here it’s more relaxed.”
