Even as politicians in Italy squabble over forming a coalition government after inconclusive elections this March, the country’s businesses are rallying around deeper cooperation with the Association of Southeast Asian Nations (Asean).
Speaking at the second High Level Dialogue on Italy Asean Economic Relations, Benedetto Della Vedova, Italy’s deputy minister of foreign affairs, said in the current environment of trade tensions, the pressure is on Singapore to maintain a free trade agreement with the European Union.
Held in Singapore on 11-12 April, the dialogue was attended by Singapore’s deputy Prime Minister Tharman Shanmugaratnam, and the former governor of Bank Negara Malaysia, Zeti Akhtar Aziz.
Among these top officials were representatives from Malaysia’s Khazanah Nasional Berhad, the General Confederation of Italian Industry and the Italian Trade Agency.
Della Vedova assured the Singapore government that Italy’s commitment to economic ties will remain.
‘The Italian business community will successfully push the economic relations and ties with Singapore and Asean,’ he said at a press briefing.
Union de Banche Italiane (UBI Banca), for example, is an Italian bank looking to deepen its investment in Southeast Asia.
It has a 25% stake in Chinese asset manager Zhong Ou Asset Management since 2006, but is not exploring similar opportunities in Southeast Asia.
‘The reason we haven’t done more [investments like this] is focus,’ said Frederik Geertman, chief commercial officer at UBI Banca.
‘Remember what’s been happening in southern European banking since 2007-08. So given the need to re-focus, the need to manage risk, preserve capital, improve the business and sustainability in a very low rates environment, there has been very limited diversification outside of Europe,’ he told Citywire Asia on the sidelines of the event.
The Italian banking sector has been dogged by fraud, non-performing loans and poor management in recent years. In fact, last year, UBI Banca bought three banks rescued by the state - Banca Marche, Banca Etruria and CariChieti.
The commercial bank is currently present in three locations in Asia – Mumbai, Hong Kong and Shanghai – and wants to expand to Southeast Asia. While Singapore is the leading contender for a representative office, Thailand, Indonesia and Vietnam are also on the shortlist.
It is essentially looking to help Italian companies export to Southeast Asia or invest in production in the region, as well as foster foreign direct investment into Italy by Southeast Asia-based companies.
The main sectors of interest for UBI Banca are mechanical engineering, automotive, fashion, agriculture and food, chemical products and furniture.
In May 2017, the UBI Group launched a combined private banking division in Italy after merging seven banks within its network.
Geertman said right now while there are no plans to go international, the private banking ties in Italy could potentially boost business in Asia.
‘Obviously when you talk about expats, many will still have a local banking relationship in Italy and you can use this to develop relations and so on. But it’s going to be a by-product and not the core focus,’ he added.