In April 1995, Baring Securities, a subsidiary of the Bank of Baring, developed more than 30,000 new customers from scratch after almost liquidation, although they were basically retail investors, but the scale of funds under custody of incremental customers has exceeded 500 million pounds.

With the continuous increase in the amount of funds, the commission charged by Bahrain Securities every trading day has also risen, gradually breaking through to 200,000 pounds. After deducting costs, the net profit of commission income is not less than 50%, that is, a large number of retail investors tirelessly trade, so that Bahrain Securities can earn 100,000 pounds a day almost with their eyes closed.

With 200 trading days a year, the current amount of funds in custody has been able to bring in a profit of 20 million pounds.

And this is just the beginning, if the customer size can reach more than 1 million, it is estimated that the net commission income can reach more than 1 billion pounds a year.

This is just commission income, and when the business stabilizes again, funds can be issued. Indexed passive funds, low management costs, a certain set of custody and management fees for a year, daily withdrawal of fees, income is also closed to the gold money, and, passive indexed funds, users buy the fund is equivalent to buying a basket of index corresponding stocks, the loss is not bad fund, because, the index fund does not choose stocks, the index announces the constituent stocks, buy according to the list. What index the user likes, what index corresponding to the fund to buy, the time of buying, the position of buying, and the profit and loss after buying the index are completely the customer's own business. Because, even if you invest in the same index fund, the time period and strategy of buying and selling are different, and it will produce completely different returns.

And the longer you invest, the lower the probability that an active investor will outperform the index. In one year, most people may outperform the index, and in three years, the outperformance index may gradually shrink to a small one. In 10 years, only 30% may outperform, only 10% may outperform in 20 years, and in 30 years, only 5% of active investors may be left, and the annualized return will exceed the index in 30 years.

The longer the time, the more the very few geniuses in the active investment outperform the index, the index may increase dozens of times, and the return on investment genius is already thousands of times. However, the longer the time, the fewer ordinary investors outperform the index, because the index itself contains a certain amount of science and elimination of garbage into excellent companies, in the long run, countless excellent companies around the world may decline and go bankrupt, but the index is always updated.

In less than two months, the reborn subsidiary of the Bank of Bahrain has received 500 million pounds of funds in custody, which is undoubtedly a bright spot after the bankruptcy and restructuring of the Bank of Bahrain.

Moreover, in the process of the bankruptcy and liquidation of the Bank of Bahrain, other enterprises have been incurring losses, and it is expected that in 95 years, the Bank of Bahrain will be in the process of bankruptcy and liquidation. The total losses will be more than £1.5 billion in order to travel lightly and shake off the baggage of the past.

If Bahrain Securities can't contribute profits, then the loss of 1.5 billion pounds will require a steady stream of injections from the parent company, Hang Seng Bank, to fill this black hole of losses.

It is precisely because of this that other financial giants are reluctant to pay a higher price for the Bank of Bahrain.

Because UBS Group acquired the investment banking division of Huabao Group, the largest financial investment group in the United Kingdom, it only paid a cost of $1.39 billion. Later, UBS established UBS Warburg in London, England based on Warbuck Bank, which gradually became the three pillars of UBS Group's business, and it only paid a price of $1.39 billion.

The scale of the Bank of Bahrain is far inferior to that of Huabao Bank, and the price paid by Hang Seng Bank is greater than that of UBS's acquisition of Warbao.

Of course, it seems that the development momentum of Bahrain Securities is good, and the strategy of attracting users with low commissions will not only not lose money, but will continue to contribute profits as the scale of users increases.

Although, the profit contributed this year is certainly not enough to offset the huge loss of the Bank of Bahrain. However, if this momentum continues, the securities subsidiary of Bank of Bahrain may indeed become a securities giant in the British market, and even in Europe and the Commonwealth!

Although the strategy of low commissions and 10 commission-free transactions a year greatly benefits customers, in fact, it is impossible for these customers who like securities investment to only trade 10 times a year. It is not excluded that some customers are indeed low-frequency transactions, and it is rare to trade once in a few years.

But the vast majority of speculators who like to trade with high frequency and constantly changing hands. Even some clients, in less than a week, have consumed 10 commission-free transactions, and after that, they are still trading and have begun to contribute commission profits to Bahrain Securities.

After the launch of Bahrain Securities' low-commission strategy, it gradually brought increasing pressure to its peers in the British securities market, and some small and medium-sized securities companies, in order to survive, soon followed up to reduce commissions.

However, some large merchant banks (also known as merchant banks in the UK) have been slow to respond.

The most ambitious UBS Huabao company is also because of the business integration period, and does not have the energy to do major strategic transformation for the time being.

Therefore, in the whole market, only some small securities companies, in order to avoid the loss of limited customers, have to follow up and reduce the commission to less than 1.5 per thousand, but the vast majority of British securities companies still have trading commissions above 2 thousandths.

As some small securities companies continue to adjust their commissions, they are gradually joining the commission war.

Bahrain Securities once again announced: "In view of the fact that there are quite a lot of investors, there will always be a part of the funds that are idle, resulting in interest losses." Therefore, on the online trading account of Bahrain Securities, a money market fund called "Cash Treasure" will be launched, which will settle interest on idle funds to customers every day to ensure that the funds will not lose interest in vain, and other money market funds in the market cannot be achieved in T+0 seconds, at least T+1 or T+N will arrive after the account, so that the efficiency of redeeming money market funds is slow, which may delay the investment opportunities of customers. The funds deposited into the cash treasure are equivalent to cash lying on the margin account and not moving, the user wants to buy stocks, and there is enough balance on the cash treasure, which can be cashed into cash to buy stocks immediately!"

"Money market funds know that it is more flexible to earn interest by investing in bonds and savings than on fixed deposits. However, even if it is a mature money market fund, it will not be converted into cash until at least the next day, or a few trading days. It is impossible to get to the account in seconds, because if the money market fund wants to get interest, it must deposit the money in the bank or buy bonds to get the interest, and the customer wants cash, the money market fund can only sell the bonds or redeem a part of the deposit. At the press conference, a reporter questioned, "If the account arrives in seconds, the cash part of the currency is insufficient, and a large number of redemptions will definitely cause a run risk!"

"This problem is not difficult to solve. First, 80% of the funds of Cash Treasure are used for fixed deposits or bond purchases, and the remaining 20% of the funds are ready to respond to customer withdrawals. Second, we will continue to withdraw a part of the customer's commission as a risk fund, once the 20% cash on the cash treasure is exhausted, we will not only take measures to ensure liquidity, but also withdraw risk funds to ensure the liquidity of customers. Thirdly, the major shareholder Hang Seng Bank signed a strategic partnership with us, and at least 30% of the funds on the cash treasure are deposited in the account of the major shareholder Hang Seng Bank, and Hang Seng Bank guarantees that the 30% deposit will be calculated on a daily basis, and the interest rate will refer to the interest rate of British government bonds, and the 30% deposit can be withdrawn at any time. Fourthly, we signed an agreement with Hang Seng Bank to take out a temporary cash loan once we were able to borrow it. To put it simply, if necessary, what can be withdrawn at any time far more than the total amount of the customer's margin, and in the future, we will limit the total amount of cash deposited in the cash, beyond the limit of our ability to redeem in seconds, then, we refuse to deposit, through strict risk control, to ensure that the cash treasure becomes a liquidity comparable to cash, and at the same time, it has the same profitability as all money market funds. ”

As soon as the cash treasure function was launched, it quickly began to be popular with Bahrain Securities' customers. Not all customers are full at any time, there are customers who constantly choose the time and control the position, many customers who are often dissatisfied with the position, the cash part always loses a certain amount of interest, and the British stock exchange market fees are expensive, so there is no advanced alternative to low fees.

And Cash Treasure solves the pain points of customers in the department!

Therefore, within a few days of the launch of Cash Treasure, more than 100 million pounds of funds were deposited. Of course, cash treasure also charges management fees, and customers are equivalent to buying money market funds, with a fee of 0.6% for a year's procedures, that is, depositing 100 million pounds in cash will contribute 600,000 pounds to the Bank of Bahrain a year. Although it is only mosquito meat, no matter how small the mosquito is, it also has meat, and it is a little more to earn from customers.

Of course, Cash Treasure is just the beginning, and only a few people in the Bank of Bahrain know that Cash Treasure will become the British version of Alipay in the future, that is, an Internet payment tool. Starting with a financial investment account, it gradually expanded to be able to shop on e-commerce websites, pay for various application scenarios, and even gradually replace bank savings and credit cards......

This conspiracy will not be used now, but bit by bit, imperceptibly laid out.