CapMark, BIL, BNZ form world bank

Press, 19 December 1986, Page 22

CapMark, BIL, BNZ form world bank

By

NEILL BIRSS

Capital Markets, Ltd, Brierley Investments, Ltd, and the Bank of New Zealand yesterday announced a new international banking group. The group, European Pacific Investments S.A., was listed on the Luxemburg Stock Exchange last night (New Zealand time), and will be listed in New Zealand when the Stock Exchange opens in January. European Pacific Investments is built on the structure of the European Pacific Banking Corporation, the Cook Islands bank formed this year by Capital Markets and Brierley Investments. Capital Markets, Brierley’s and the BNZ each have 28 per cent of the shareholding in European Pacific Investments. The remaining 16 per cent of the 25 million SUS2 shares have been placed in Europe. The paper is bearer shares, much favoured overseas as a means of avoiding taxes. No register of shareholders will be held. The paper is the right to title. In New Zealand, however, shareholders will have the right to register their shares, and only shares on the New Zealand branch register will be traded on this country’s stock exchange. The amount paid to Capital Markets and Brierley’s for the European Pacific Banking

Corporation is not being disclosed, but Mr Paul Collins, chief executive of Brierley's, told a press briefing in Wellington yesterday that it was not equivalent to the two firm's share in the new bank. Cash changed hands, he said. The price was the cost of setting up EPBC. The field of the new bank will be a niche in international marketing, and most of its initial operations will be from Hong Kong, though internal banking activities in the Cook Islands will continue. The chairman is Mr David Richwhite, who is chief executive of Capital Markets and a principal of the merchant bank, Fay, Richwhite and Company, Ltd. Equity Pacific Investments would focus on “structuring and sophisticated packaging of instruments” the briefing was told. Mr Richwhite said he knew of no other bank in the world directed towards the same niche, but was coy on the details of its specialty. Trust company activities will be another line of business, and there will be an investment arm, based in Hong Kong. The directors are: Mr Richwhite; Mr David Lloyd, chairman of the Cook Island Trust Corporation, which will become part of the European Pacific Group and described in a corporate profile as the man primarily responsible for the development of the Cook Islands as an offshore financial centre; Mr Alexander Adamovich, of Hong

Kong, who will be the managing director; Mr Collins, of Brierley’s; Mr Francis Hoogewerf, an English citizen living in Luxemburg; and Mr Peter Travers, general manager, corporate and international, of the BNZ. “It is intended that European Pacific Investments will immediately open representative offices in Hong Kong,” Mr Richwhite said. “The company is also intending to establish operations elsewhere in Europe to expand the services offered to corporate banking and private clients in Europe. The change in emphasis of the bank's operating base from Rarotonga to Hong Kong and Europe is a logical progression given the areas of opportunity the company wishes to pursue. This will place the bank in a sound strategic position to service not only the Pacific Rim, but also the lucrative and extensive market in Europe.” He described the international banking activities as being specialist banking activities for international transactions. The answer to a question whether it would be a banker’s bank was: “Yes, to some extent.” Elaborating on the trust and corporate management role, Mr Collins said the bank had identified a need for a “comprehensive network of trustee operations to give flexibility to clients to manage their international financial affairs.” The development of this

international network is an extension of the operations currently engaged in by Cook Islands Trust Corporation which European Pacific Investments has purchased. Cook Islands Trust Corporation already has a wide clientele and has proved to be highly successful and profitable in its chosen area of the market. It will also encompass a private banking network specialising in management and protection of assets. Mr Hoogewerf, the Luxemburg director, was described as having extensive experience in trust and management operations in Europe. It was expected that the investment arm in Hong Kong would eventually lead to a listing on the Hong Kong exchange, Mr Richwhite said. (This is now the world’s third largest exchange for equity trading, after New York and Tokyo.) The authorised capital of European Pacific Investments is SUS2SO million, issued and paid to SUSSO million. The directors forecast a maiden net profit for six months and a half to June 30 of “not less than SUSIO million.” The profit will be generated chiefly from fees. “We will be putting in place specific transactions for specific clients, probably few in number, with specific fees from them,” Mr Richwhite said. He described the profit potential for European Pacific Investments as very strong.