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Standard Chartered has some big growth plans for Asia

Standard Chartered is taking to take advantage as US rivals cut investment banking jobs in China amid rising political tensions and falling deal-flow.

The bank is looking to double pre-tax profits in China from $700m in 2021 to $1.4bn in 2024 across its businesses.  At a time when US banks are paring back their presence in China with a series of job cuts, Standard Chartered said it is capitalising on the re-opening of China, while accelerating growth across ASEAN and South Asia.

In a presentation to investors in Asia on May 16, the bank said it's taking advantage of changes in supply chains as a result of shifting geopolitics, with cross-border income into Singapore increasing by 45% last year.

In February, Standard Chartered gained regulatory clearance to set up a subsidiary in China, the first time the country’s regulator allowed a securities firm wholly owned by a foreign shareholder to set up a greenfield investment since ownership restrictions were eased in 2020. Rivals have built an onshore presence through joint ventures with local brokerages.

The approval followed a pledge by Standard Chartered last year to invest US$300 million in China-related businesses over the next three years.

John Tan, head of financial markets for Asia, is chairman-designate of the planned securities arm, while Grace Geng, a former co-head of global capital markets at Morgan Stanley Huaxin Securities, will be CEO-designate.

The securities licence would complete the bank’s offering in China, where in January it became the first non-Chinese banks to trade onshore Chinese government bond futures.  Its China onshore business reported record income of $1.14bn in 2022. As well as bolstering its onshore presence, the bank says it will also invest in wealth management, the Greater Bay Area and in its CCIB network.

In wealth management, Standard Chartered said it is exploring partnerships with banks in mainland China. Meanwhile, Hong Kong remains the bank’s most important market, accounting for a third of all group profits, and delivering a record first quarter profit following a rebound from Covid.

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Photo by Kin Li on Unsplash

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AUTHORDavid Rothnie Insider Comment

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