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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
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CLS update for the Turkish banking industry16 November 2006 Rob Close President and CEO CLS Bank International
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
CLS Bank is Unique • 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 Shareholders 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 – growing volume and value Volume 270,000 instructions daily (502,384 peak day) Value $2.9 trillion daily ($5.47 trillion peak day)
Growing CLS participation 71 Shareholders, 57 Members, 26 Service Providers
CLS penetration – London and New York CLS estimated market share for spot, swaps and overall market Comparison with aggregated FXC and JSC market statistics for London and New York
Submitting Instructions Funding & settlement Funding completion 07:00 06:30 09:00 12:00 How CLS works - overview
CLS perceived value Operational Efficiencies & Scale Economics Risk reduction Market growth support Reduced funding
CLS perceived value by sector Banks Banks Corporates Corporates Pension Funds Pension Funds Operational Efficiencies & Scale Economics Risk reduction Investment Funds Hedge / leveraged funds Prime Brokerage / Algo Business Market growth support Banks Reduced funding Banks Corporates Investment Funds Prime Brokerage / Algo Business Prime Brokerage / Algo Business Hedge / leveraged funds Hedge / leveraged funds
Growing FX volume from the fund industry Average foreign exchange trading volumes among fund managers and pension funds increased almost 48% from 2004 to 2005. Source: 2006 Greenwich Associates. Based on a matched sample of 733 respondents. Figures are average annual volume per respondent.
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 update for the Turkish banking industry16 November 2006 Rob Close President and CEO CLS Bank International