Paxos Gets Monetary Authority of Singapore Approval

Key Insights:

  • Crypto trading and custody platform Paxos gets MAS approval.
  • Paxos becomes the first platform to receive licenses in New York and Singapore.
  • The latest approval further cements Singapore’s status as Asia’s crypto hub.

Launched in 2012, Paxos is a trading and custody services provider. As a crypto exchange, Paxos also supports Binance USD (BUSD) and Pax Dollar (USDP) and also offers users PAX Gold (PAXG).

Each PAXG token is backed by one fine troy ounce of a 400 Oz London Gold Delivery gold bar. PAXG holders own the underlying physical gold held in custody by Paxos Trust Company.

Paxos also builds blockchain solutions for institutional customers. These include Bank of America, Credit Suisse, Interactive Brokers, PayPal, and Société Generale.

Paxos has had a presence in Singapore since 2012, while also regulated by the New York Department of Finance Services.

Monetary Authority of Singapore Gives Paxos Coveted License

On Thursday, Paxos announced in-principal approval for a Major Payments Institution license from the MAS.

According to the announcement, Paxos became the first blockchain infrastructure platform to secure regulatory oversight in the financial hubs of New York and Singapore.

As a result of the MAS license, Paxos can offer its digital asset and blockchain products and services to Singaporean domiciled customers.


Co-Founder and CEO, Paxos Asia said,

We’re excited to have MAS as our regulator, and with their oversight, we’ll be able to safely accelerate consumer adoption of digital assets globally by powering regulated solutions for the world’s biggest enterprises.”

MAS sets a High Bar for Crypto-Related Firms

The MAS does not readily hand out licenses, as Binance discovered in 2021. Last year, Binance reportedly withdrew its Singapore license application for failing to meet MAS AML and KYC requirements.

A small number of other crypto-related shops have been more fortunate, however. In October, DBS Vickers obtained a license to offer digital payment token services.

At the time, the Australian crypto exchange Independent Reserve was reportedly the only foreign entity to hold a Singapore license to allow digital payment token services.

Before this week, only FOMO Pay and TripleA had obtained digital payment token services licenses alongside DBS Vickers and Independent Reserve.

This week, Swiss crypto bank Sygnum received in-principal approval to expand Singapore Capital Market Services (CMS) license. The Swiss crypto bank had previously held a Singapore Capital Markets Services (CMS) license for asset management since 2019.

The in-principal approval will allow Sygnum Bank to provide corporate finance advisory services, deal with capital market products, and provide custodial services.

Paxos and Sygnum Approvals a Boost for Hub Aspirations

Singapore and the MAS have been particularly active in the digital asset space. The Republic’s status as a global digital asset hub continues to evolve despite a high bar for platforms to meet.

Singapore’s high bar is evident in the number of applications the MAS has rejected. According to media reports, the MAS turned down 103 of 176 by December 2021.

In 2021, Binance withdrew its Singapore application for reportedly failing to meet MAS KYC and AML requirements. Since then, the MAS has also banned crypto exchange advertising in public.

This week’s news could be a shift in attitudes towards crypto-related firms. News of Singapore’s sovereign wealth fund Temasek making strategic investments into the space could support such a view.

Temasek reportedly led a fresh fundraising round for the Australian NFT startup Immutable. A $200m funding round took the value of Immutable to $2.5bn, with investors including Tencent Holdings, Mirae Asset, and Declaration Partners, among others.

In February, Temasek had led a $200m round for Amber Group, a global digital assets platform.

Universal Music Valued Around $39 Billion Ahead of Stock Market Debut

France’s Vivendi is spinning off Universal and on Monday set a reference price for the listing at 18.5 euros per share, according to a statement issued by Euronext.

Universal Music Group’s (UMG) listing will be Europe’s largest this year and will hand 60% of shares to Vivendi shareholders.

Universal is betting that a boom in streaming led by Spotify that has fuelled royalty revenue and profit growth for several years still has a long way to run, in a music industry it dominates along with Warner and Sony Music, part of Sony Group Corp.

Its flotation carries high stakes for Canal+ owner Vivendi, which hopes to rid itself of a conglomerate discount. However, the listing raises questions about Vivendi’s strategy once it parts ways with its cash cow, in which it will retain only a 10% stake.

Several high-profile investors have also already snapped up large Universal stakes, banking in part on the group’s back catalogue, which includes the likes of Bob Dylan and the Beatles. They also hope deals with ad-supported software and social media platforms such as Alphabet Inc’s YouTube and TikTok will sustain its performance and valuation.

U.S. billionaire William Ackman suffered a setback when his attempt to invest in Universal via a special purpose acquisition vehicle (SPAC) hit a snag with regulators and investors. However, Ackman still got a 10% stake via his Pershing Square hedge fund. China’s Tencent owns 20% of Universal.

One winner in the listing will be Vincent Bollore, the French media tycoon who is Vivendi’s controlling shareholder. He will receive Universal shares worth 6 billion euros at Monday’s price.

Bollore has been an aggressive consolidator in France’s media and publishing landscape, and he has a long-held ambition to build up a southern European media powerhouse.

Vivendi itself may suffer in the short run, however, and shares are expected to fall Tuesday as they begin trading without Universal.

BNP Paribas, Natixis, Credit Agricole, Morgan Stanley and Societe Generale are the lead financial advisers on the deal, out of 17 banks in total — an unusually large total.

The fee pot is expected to be below standard listings as no fresh cash is being raised as part of the spin-off.

Universal said in its prospectus that the overall expenses to be paid in relation to the Universal deal would not go beyond 0.5% of the total amount of the share distribution.

The listing is the latest win for Euronext in Amsterdam, which has grown as a financial centre in the wake of Britain’s departure from the European Union. Before Universal, Amsterdam had attracted a record 14 IPOs so far this year, of which 10 were SPACs.

But the only Amsterdam listing of a size comparable to Universal in recent history was the 95 billion euro listing of technology investor Prosus, also a spin-off, in September 2019.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 0.8524 euros)

(Additional reporting by Toby Sterling; Writing by Sarah White; Editing by David Evans and Lisa Shumaker)

SocGen’s Turnaround Plan on Track as It Ups Revenue Forecast

In a sign that Chief Executive Frederic Oudea’s turnaround strategy is starting to pay off, Societe Generale now expects revenue to grow in all its businesses this year, including in French retail banking, which had been a weakspot.

Under pressure to boost profitability, Oudea has been trying to revive the lender after losses from stock-linked derivatives wiped out equity trading in the first and second quarters of 2020, whilst a cumbersome retail banking structure hindered growth.

France’s third-largest listed lender, after BNP Paribas and Credit Agricole SA, said its cost of risk, which reflects provisions against bad loans, would be lower than expected in 2021 at 20 to 25 basis points, down from a previous forecast of 30 to 35 basis points.

SocGen also said its cost of risk fell 88.9% in the second quarter, mirroring that of rivals including Spain’s BBVA and BNP Paribas, which slashed provisions for unpaid loans as the global economy was gradually recovering from the worst of the COVID-19 crisis.

The lender posted second-quarter net income of 1.44 billion euros ($1.71 billion), compared with a loss of 1.26 billion euros a year earlier. Revenue rose 18.2% to 6.26 billion euros.

In France, where the government ended a third nationwide lockdown in mid-May, retail banking revenue rose 8.7%.

Revenue was up 24.5% in its corporate and investment banking businesses, which SocGen began revamping two months ago by shifting resources into dealmaking and reducing its trading arm’s exposure to market swings.

Equity trading revenue was five times higher than a year earlier, while fixed income and currency trading fell 33%.

Shares in SocGen have more than doubled since their drop to near 30-year lows in autumn last year when they closed at 10.90 euros on Sept. 25. Shares closed at 24.86 euros on Monday.

($1 = 0.8420 euros)

(Reporting by Matthieu Protard; Additional reporting by Rachel Armstrong in London; Editing by Christian Schmolllinger and Anil D’Silva)

France’s SocGen Seeks to Boost Investment Bank Returns

The lender is looking to boost profitability in the division and stabilise revenues, after its flagship equities business, long a strength, was hit hard in the COVID-19 pandemic last year when companies suspended or cancelled dividends.

SocGen said it would target a more sustained and profitable growth of its corporate and investment banking businesses with a rebalancing between market activities, its more profitable but riskiest franchise, and financing and M&A advisory.

The French bank said it targeted a return on normative equity of over 10% in its global banking and investors solutions businesses from 2023, up from 7% now.

The lender also said it targeted a cost base of between 5.5 to 5.7 billion euros ($1.22 billion) in 2023 its global banking and investors solutions businesses, from around 5.8 billion euros in 2020, as it presses on with previously announced savings.

SocGen’s chief executive Frederic Oudea has accelerated an overall revamp of businesses underway since 2018, in one of his last chances to shore up his legacy before his term expires in 2023.

The bank’s shares have risen 46% so far this year after falling near 30-year lows in 2020, boosted by a rebound in its markets business and expectations loan losses caused by the pandemic will be lower than previously forecast.

But SocGen’s market value is still less than half what it was when Oudea took over in 2008 in the wake of the huge losses on equity derivatives caused by rogue trader Jerome Kerviel.

($1 = 0.8226 euros)

(Reporting by Matthieu Protard and Sudip Kar-Gupta, Editing by Sarah White)

Rebound in Trading Boosts Earnings at France’s SocGen

France’s third-largest listed bank, which tumbled in 2020 to its first full-year loss for a decade as the COVID-19 pandemic rattled its businesses, posted a 814 million euros ($977.37 million) net profit in the quarter against a 326 million euros loss a year ago.

Earnings per share amounted to 0.79 euro, above a mean forecast for 0.23 euro according to Refinitiv data.

Under market pressure to boost profitability, SocGen chief executive Frederic Oudea has speeded up an overhaul of business since 2018 to reinforce the bank’s balance sheet by selling units in Eastern and Central European countries such as Poland, Serbia and Bulgaria.

SocGen also exited or cut back some corporate and investment banking (CIB) activities, such as commodities trading. The bank is due to unveil a review of its CIB on May 10.

SocGen benefited from a sector-wide boom in share trading, with first quarter revenues jumping to 851 million euros against just 9 million euros last year when the bank was hit by losses from complext derivative products, and had said it would exit some business lines.

“The equity businesses enjoyed their best quarter since 2015,” SocGen said in a statement.

Revenue was up by 2.63% in fixed income and currency trading, outperforming some European rivals such as BNP Paribas and Barclays but still lagging U.S. investment banks.

The positive tone was echoed at other European banks, with ING and UniCredit also reporting better-than-expected earnings on Thursday.

However, European lenders are still grappling with thin margins and home markets still dealing with COVID-19 restrictions, with the resilience of their recovery likely to be tested if financial market volumes become more subdued.

In its French retail business, SocGen posted a 1.8% drop in revenue but said activity was gradually improving.

“The strong recovery in equities and the resilient top line performance in French retail is reassuring and consensus has to upgrade estimates given the turnaround in global markets and lower cost of risk guidance”, analysts at JPMorgan noted.

SocGen also confirmed pandemic-related provisions would fall this year from 2020 levels. The bank now sees its cost of risk, which reflects provisions against bad loans, to be between 30 and 35 basis points in 2021 against 64 basis points last year.

Shares in SocGen have gained 38.5% since the beginning of the year after a 45% slump in 2020. Its share price has more than doubled since its lowest at 10.77 euros on Sept. 30.

As part of further initiatives to enhance returns, SocGen entered last month in exclusive talks to sell most of its asset management arm Lyxor to Amundi for 825 million euros.

The lender said last year it would merge its two retail banking networks in France, with the closure of 600 of its nearly 2,100 branches by 2025.

(Reporting by Matthieu Protard and Marc Angrand, Editing by Sarah White and Carmel Crimmins)