BNY Mellon hires Hills in treasury services

Bank of New York Mellon has filled a vacant position in its Asia-Pacific trade team with the appointment of John Hills as head of treasury services for South Asia.

In his new role, Hills will be responsible for treasury services in Australia, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Starting at BNY Mellon in February, Hills joins the bank from Wells Fargo where he worked as regional representative for Southeast Asia.

Hills replaces Fred DiCocco who has transferred to the newly created position of head of global network management for treasury services.

"Increasing the depth of our management team is an important part of our overall strategic commitment to growing our presence in the Asia-Pacific region," says BNY Mellon's head of treasury services for Asia, Richard Brown. "John's appointment marks an important step in that direction."

BNY Mellon is not alone in expanding its treasury and trade services in Asia-Pacific. Last week, Citi appointed Ravi Saxena as its first Asia-Pacific trade, export and agency finance head. The move allows Citi to increase the number of government-guaranteed trade finance solutions it can offer customers in the region.

Government-guaranteed trade finance has become increasingly important. Last November, a meeting of trade finance bank heads convened by the World Trade Organisation concluded there was a $25 billion shortfall in financing available to traders in 2008.

In January, Royal Bank of Scotland (RBS) created its first regional trade advisory team for Asia-Pacific. Lead by Lawrence Tan and supported by Dave Chin, the team supports RBS's local country operations in trade finance deal structuring and execution.

The expansion of banks' trade finance operations in Asia is a direct result of the credit crunch. Increased concerns over the viability of one's counterparties and letter of credit-issuing banks has resulted in a spike in demand for LCs and LC confirmations, especially in the region's trade powerhouses.

In Korea, the pricing for short-term trade finance rose from 18bp over Libor in early 2008 to 300bp in January -- a more than 1,000% increase -- according to US-based Bankers Association for Finance and Trade.

Increased LC demand, coupled with the increase in pricing, benefits the bottom lines of trade banks and a number of regional players have reported very robust 2008 earnings from trade services. One bank even reported that revenues increased by as much as 40% year-on-year.

Despite increased business for trade finance banks, however, the total value of trade continues to decline. The International Monetary Fund estimates that in November the total value of world merchandise trade fell 42.5% on a three-month annualised basis -- the steepest decline since World War II, according to the IMF.