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Sun 17 May 2009 04:00 AM

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Banking on success

Shayne Nelson, the regional boss of Standard Chartered tells CEO Middle East how the bank aims to solidify its presence in the Middle East.

Banking on success
Shayne Nelson, Regional Chief executive of Standard Chartered.
Banking on success

Shayne Nelson, the regional boss of Standard Chartered tells CEO Middle East how the bank aims to solidify its presence in the Middle East.

Standard Chartered PLC, listed on both London and Hong Kong stock exchanges, ranks among the top 25 companies in the FTSE-100 by market capitalisation. The London-headquartered Group has operated for over 150 years in some of the world's most dynamic markets, leading the way in Asia, Africa and the Middle East. Its income and profits have more than doubled over the last five years primarily as a result of organic growth and supplemented by acquisitions.

Over the past 50 years, how have you seen banking in the Middle East evolve? How did Standard Chartered perform last year?

The Middle East region plays a critical role in delivering Standard Chartered's brand promise to lead the way in Asia, Africa and the Middle East.

For 80 years Standard Chartered has played a role in the development and shaping of the banking industry in the Middle East. We started operations in Bahrain in 1920 and we are the oldest bank in Bahrain, Qatar and Jordan. Over the years, the banking sector in the region has grown significantly; just in the UAE, the number of banks has grown to over 50 to cater to a population of 4.5 million.

The region as a whole has enjoyed good growth momentum, especially in the UAE where we had a huge boom in property prices. We are now seeing a substantial reduction and in my opinion, it will be good for the UAE as it will make us more cost competitive and would be better for the country in the long run.

The economic outlook for UAE is pretty good at the moment with our forecast for 0.50 percent GDP growth, which is quite reasonable given the current market condition. Most of our markets in the region have reasonable GDP growth. Having worked through the previous Asian financial crisis, what I am seeing in the Middle East is nowhere as bad as what happened back then in Asia.

In terms of performance, our global operating profit increased by 13 percent to $4.6bn with income growth up by 26 percent to $13.97m. In our MESA group reporting, our operating profit was up by 25 per cent and in the UAE our wholesale banking revenue was up by 80 percent. During the most challenging last quarter of 2008, we remained open for business supporting clients through the "storm".

There are a few reasons why we performed so well across the globe. First, our revenue mix is quite different from most international banks. We don't have a large concentration in Americas and Europe; in fact any operations there are mostly outbound businesses. Our focus is mainly our footprint markets where we can utilise our strengths to the maximum.

Globally, our strategy is bringing the best services to our stakeholders, which means our business initiatives are always customer-centric. Our experience in challenging markets has provided us the ability to respond to our customers' needs effectively.

How do you see the bank's performance in first half of 2009?

We can't give projection. We did say we had a good start to 2009.

How do you see the overall corporate vs consumer banking performing in 2009?

We have built excellent momentum in wholesale banking with broad-based top line growth across our geographies and products. We are in a strong liquidity position to support our clients. Our strategic decision to relocate specialists from London, New York, Hong Kong and Singapore to the DIFC was a major step in expanding the bank's presence in the UAE and in deepening our product range and complexity.Today we run the largest trading floor in the Middle East located in the DIFC. The facility holds one of the bank's global trading hubs and houses almost 130 traders. Also within the DIFC is the Centre of Excellence for product innovation and origination in Islamic banking (Standard Chartered Saadiq).

On the retail banking industry, there will be reduction in income as consumers are feeling the effect of the economic impact throughout the world and the UAE is no exception. We have repositioned our consumer banking business across the network and here in the UAE. Our experience in challenging times had shown us that there are still opportunities and more than ever, we are looking at getting deeper into supporting our customers through this period.

In the first quarter of 2009, we have rolled out several new initiatives responding to our customers' needs such as the Islamic Home Finance.

We do see the need to help support the engine of growth for the economies especially the small and medium enterprises. We have dedicated SME centres in Dubai and Abu Dhabi to service our customers effectively.

Recently, the bank signed an agreement with the Mohammed Bin Rashid Establishment for Young Business Leaders (MBRE) as part of a government-led partnership to develop local start-up businesses across the UAE.

The programme will cater a range of structured training initiatives, products and facilities to MBRE members as well as our SME customers. In our view this is important, we as an industry together work with the government need to support these pillars as they form a part of the country's sustainable economic contributors.

How do you see talent development and how sustainable is it?

Standard Chartered believes its employees are its greatest asset and aspires to become the "World's Best International Employer of Choice".

We are one of the world's most international banks, with almost 73,000 employees panning over 115 different nationalities in 70 countries and territories.

In all of the Bank's territories, staff is predominantly local nationals as this is key to ensuring a sustainable business environment. We are the largest employer in DIFC as well as the first bank to own our building on the premises, which houses MENA and Africa regional offices and various global functions. This provides great talent development opportunities as we aim to bring best-in-class experience and expertise to benefit both the local and regional banking industry development.

Have you any plans for further expansion in 2009, and, if so, what are they?

Our strategy at Standard Chartered is organic across the world. We will continue to focus on deepening our relationship with our existing customers through this period and look at expanding our distribution channels and product offerings.

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