Banking News
- StanChart to cash in as local companies go global
Date: 8-Nov-2007 Sources: (People's Daily)
London-based Standard Chartered Bank said yesterday it will boost its investment in China to fuel the country's companies wanting to expand abroad.
'In the last three to five years, our businesses here in China have been really strong, partly because Chinese companies are growing and looking at expanding overseas,' said VShankar, group head of client relationship and corporate finance at Standard Chartered.
'We will open more branches in China as our business grows and more Chinese companies need finance not only in China but also for their needs outside the country.'
He refused to comment on earlier reports that Bank of China and the Industrial and Commercial Bank of China (ICBC) are in acquisition talks with Standard Chartered.
As Chinese companies start to become active players in the global market, their financial needs represent a lucrative business for banks.
According to Standard Chartered, its corporate financial business revenue in China grew 75 percent in the first half of this year, making it the sixth-largest franchise market for its wholesale banking business.
'Most Asian companies, including those from China, are only now beginning to expand overseas - and they are always first-generation entrepreneurs,' said Shankar. 'Unlike most Western multinationals, which have done overseas acquisitions for decades, most of these companies do not have a big team of people who are familiar with issues like accounting and regulations.'
Standard Chartered first set up in China in 1858. It regards the nation as 'part of the company history'. It now has 32 branches in China and 3,800 employees - three times more than it had two years ago in the country.
Although the bank is optimistic about its growth in China, analysts said it could face fierce competition in the near future from its Chinese peers, which are also starting to expand overseas - especially in developing countries, where about 90 percent of Standard Chartered's revenue comes from.
Last month, the ICBC announced a $5.46 billion deal for a 20 percent stake in Standard Bank Group Ltd, Africa's largest bank. In July, China Development Bank paid 2.2 billion euros for a 3.1 percent stake in Barclays to become one of its largest shareholders.
Other Chinese banks, such as Bank of China and China Minsheng Banking Corp, have been seeking opportunities outside China.
Shankar said that although Standard Chartered faces stiff competition, the market is growing, backed by increased wealth and consumerism. 'There's enough room for all of us,' he said.
Sponsor Results:
