Standard Chartered eyes regional expansion

04 July 2003
Emerging market specialist Standard Chartered Bankhas drawn up plans for regional expansion and the development of new services and products.

Stuart Horsewood has been appointed country manager for Iraq and will initially be based in Dubai. 'This doesn't mean we'll be opening a branch in Iraq in the immediate future but we are exploring our options there,' says David Edwards, regional general manager for the Middle East & South Asia (MESA), who took up his post in January. 'It is a reflection of our status as an emerging market bank that we had 40 staff who expressed an interest in working in Iraq.'

Other plans for expansion have been drawn up, most significantly in Qatar, where two new branches are planned in Doha. Following the acquisition of ANZ Grindlays' operations in 2000, Standard Chartered held two banking licences in Qatar. 'We have sold our stake in Grindlays to Sheikh Hamad bin Jassim bin Jaber al-Thani [Qatar's Foreign Affairs Minister],' says Edwards. 'We will now be looking to expand our consumer banking and wealth management activities in Qatar.'

Standard Chartered also intends to be the first international bank to re-enter Afghanistan. An application was filed on 26 June for a banking licence and it intends to open its first branch in Kabul. 'With our expertise and extensive network, Standard Chartered is uniquely placed to help provide assistance for ensuring efficient flow of donor and aid funding and progressing rebuilding efforts of both the economy and the country,' says Edwards.

In addition to physical expansion, the bank is planning to expand and improve its products and services. 'On the wholesale side we are developing our debt capital markets activities,' says Edwards. Standard Chartered jointly underwrote the government of Dubai debut bond issue and bought into the sovereign bonds recently issued by Bahrain and Iran (MEED 30:5:03).

A greater emphasis will also be placed on the bank's project and structured finance activities. A new team, based in Dubai, has been assembled and is being led by Ravi Suri. 'This is not an area we have focused on in the Middle East before, but we have proven capabilities in other emerging markets and we have the relationships in the region,' says Edwards. 'However, we do not anticipate building a large book: this is more about distribution. The main markets we will be looking at are Qatar and Iran, where there are excellent opportunities.'

The expansion of the bank's regional activities reflects the growing importance of its MESA operations, which in 2002 generated revenues of $501 million and profits of $292 million, the latter a 54 per cent improvement on the previous year.

'We have now completed the integration of the Grindlays acquisition and MESA accounted for 11 per cent of group revenues in 2002 and 23 per cent of trading profit,' says Edwards. 'However, it must be recognised that 2002 was an exceptional year: at only $30 million our bad rate level was extremely low and this is probably not repeatable.'

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