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Setting high standards at the Standard (3)

(China Daily)

09:22, October 20, 2011

"The situation is different and the clients' demand for capital has also changed. For example, previously they just sold bonds on the mainland. Now the channels have multiplied and they (businesses) could go to Hong Kong and Taiwan to raise capital."

Tsang expects SCB's business related to Taiwan to grow faster after it established a Taiwan desk in five mainland branches following the acquisition of Hsinchu International Bank in November 2006. The move made it an international bank with the largest network in Taiwan.

As China accelerates its pace to float the yuan globally and encourages domestic enterprises to explore overseas market, she believes great opportunities are lying ahead for leading international lenders such as SCB to make good profits in the region.

"We think there is good business potential across the region driven by these two predictable changes," said Tsang.

The financier wants the Chinese government to promote wider use of the yuan in trade settlement with overseas importers and to extend other global offshore centers for yuan internationalization by getting those centers to sign contracts with Hong Kong in order to achieve the hub-and-spoke effect and make the whole process more controllable.

As one of the first foreign players in Hong Kong participating in yuan trade settlement pilot projects, SCB was the first international lender that processed two-way settlements between the mainland and Hong Kong. It was also the first foreign bank that issued yuan-denominated corporate bonds in Hong Kong.

On this aspect, SCB is strengthening its cooperation with the Agricultural Bank of China Ltd (ABC), one of the country's Big Four lenders, to combine its global network with ABC's extensive domestic network and its sound client basis.

Standard Chartered PLC invested $500 million in ABC's IPO in 2010.

"We take a long-term view of the partnership. ABC offers plenty of scope for mutually beneficial cooperation given our complementary strengths and footprint. ABC has some 2.6 million corporate clients, more than 320 million personal customers and nearly 24,000 branches, but virtually no international network. This is where we found a niche in which we could play to our strengths," said Tsang.

She said SCB has already become ABC's preferred partner for trade and cash, and it has seen a significant increase in trade volume with ABC.

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