"The last few years have seen a marked shift in the dynamics of the marketplace," observes Mike Rees, Standard Chartered's CEO of wholesale banking. No longer is the Asian corporate confining its business activity within its national borders. Leading companies from Hong Kong and Singapore to Korea and Japan are expanding successfully within the Asia Pacific and beyond to Africa, the Middle East and other markets.
"Asia used to be the destination for US and European multinationals," he notes. "Now, more and more, we see the flow of business going the other way. There is a huge amount of crossborder activity among Asian corporates both inside and outside the region.
"We are ready, willing and able to be a strategic partner to our clients in this brave new world," he declares.
Rees believes that Standard Chartered is uniquely positioned to benefit from this shift given its footprint in over 50 countries. More importantly, the bank's strong tradition of building relationships with clients across its network enables it to be at the forefront of serving clients' ever changing requirements.
"Every dynamic in wholesale banking is relationship-driven. We want to be important to our clients, especially in the markets where we have a competitive advantage."
Rees sees the building of long-term relationships as key to the success of Standard Chartered's wholesale banking business. This approach, he points out, allows the bank to also be more responsive in executing deals and be proactive in offering solutions.
"When you know your client well, you understand their needs and can present them with a range of viable solutions," he says. "We will examine the alternatives, the pros and cons, the pricing and also take into account what they already have in their books."
Standard Chartered's growing capital market business is a clear indicator that the bank has its finger firmly on the market's pulse. Momentum has accelerated for the bank's capital markets business as the team, headed by David Worth, has amply demonstrated its ability to understand and respond to market conditions, borrowers' and issuers' requirements and investors' appetite.
According to Worth, "In this business, one true measure of success is how we have repeatedly been innovative in structuring a transaction so that it meets our clients' needs. We have brought numerous landmark deals to the market in the course of a few short years as lead arranger."
The Bank ranks highly in league tables across the Asia-Pacific, including Singapore, Hong Kong, Thailand,bMalaysia, Philippines and Indonesia. The Bank has, for example, been at the forefront in the development of the local currency debt capital markets and at the same time continues to upscale its syndication offerings.
The trail that Standard Chartered has blazed has not gone unnoticed beyond immediate client circles. Most recently, the bank was named Best Debt House in Singapore in the prestigious Euromoney Awards for Excellence 2004, and also clinched Best Debt House in India - a title it has kept for three consecutive years.
The bank's impressive list of 2003 accolades include Best Singapore and Hong Kong Loan House and Malaysia Loan of the Year (IFR Asia, 2003); Best Debt House in Singapore and India (The Asset's Triple A Awards 2003); and Best Bond House in Thailand (FinanceAsia Country Awards for Achievement 2003).
Innovativeness is the key especially in the capital raising arena and here is where Standard Chartered makes the difference with many first of its kind deals for its clients, among them
1) the first ever leveraged buy-out financing... in South East Asia... (Singapore Yellow Pages),
2) the first syndicated satellite financing in Malaysia ....(Binariang Satellite Systems), and
3) the first rated Korean auto loan securitisation,... which utilizes a revolving trust structure ...for Hyundai Capital.
4) the first AAA rated future flow securitisation guaranteed by a monoline insurance company to be issued out of Turkey since 1998
The Turkey deal, in particular, shows how international this business has become. David explains, "Not only were we the first bank to introduce a new structure that enabled our client to establish a debt programme capable of multiple issues secured by the same asset class, the deal was distributed by us into Europe and the US."
David adds, "This is not just about origination of debt - but more about the ability to originate and distribute debt in the most efficient manner - and that means utilizing our geographic reach to the benefit of our clients and shareholders."
To add further depth to its solution-driven product suite, the bank has overlaid above its capital markets strengths more complex corporate finance capabilities. This includes structured solutions such as credit and interest rate derivatives, tax-driven structures, project finance and corporate advisory services. In so doing, Rees says that Standard Chartered is able to advise clients on acquisitions and divestitures, as well as the provision of financing for these undertakings.
By keeping clients front and center and offering them solution-oriented expertise, Standard Chartered is able to become their strategic partner, helping them to achieve their business goals.
"We are passionate about our clients' success and we have what it takes to help them be successful."
And this applies to both corporates as well as institutions. MNCs, large local corporates, and small and medium enterprises have always relied on Standard Chartered to provide them with innovative solutions, but Standard Chartered has also long been known as a bankers' bank.
Standard Chartered has been providing banking services to other financial institutions - other banks, securities companies, insurance companies and fund managers - for decades.
Andrew Charlton, global head, financial institutions, explains that the bank's strong network in Asia, Africa and the Middle East provides a bridge to these markets for clients from the US and Europe. Partner banks in the US and Europe are able to extend their reach into these dynamic markets without the high investment costs.
"For banks that are strong in their market but do not have the wide geographic coverage that we do, we can offer our delivery capabilities and expertise, particularly in Asia, the Middle East and Africa, where we lead the way," he says.
"By partnering with Standard Chartered," he continues, "these banks are assured that their clients receive seamless, reliable service as they seek to grow their businesses in new markets. An added advantage for these banks is that we do not compete with them in their home markets of the US and Europe."
For some institutions, we provide an on-the-ground capability in markets where they are not present to enable them to capture more of their own clients' business.
For example, we provide cash and trade solutions, particularly in Asia and the Middle East, for major banks based in the Americas, Europe and Australasia that enable them to offer complete trade and supply chain solutions ..to their own clients. Similarly, in securities services, we are a leader in the provision of local services in Asia, for global custodians.
This ability to act as an extension of their own network, for institutions that do not have our geographic spread, becomes more and more important ... as international trade and investment grows between, and into, our core markets.
At the same time, for these, and other financial institutions in developing markets, our broader range of product capabilities, particularly in Global Markets, means that we can offer comprehensive solutions that satisfy needs driven by the opening up of markets and clients' own increasing sophistication."
The way that the Bank has structured its business is one source of sustainable competitive advantage. Andy explains, "We deal with over 1,900 clients, headquartered in 118 countries. We manage these relationships through over 120 relationship managers in 42 countries. Over two-thirds of FI revenue is booked in a location outside the location where the client headquarters is managed. So our teams are very focused on identifying client needs and delivering solutions across borders. Our geographic spread, linked by a specialised segment focus, ..means we can be closer to the client's decision makers and in the right place to deliver the solution."
"Ultimately," Rees concludes, "clients are the core of our strategy. Whether they are corporates or financial institutions, we have a commitment to our clients." Competition may come and go, but for a bank such as Standard Chartered, where everything it does begins and ends with its clients, the future looks bright.
