Business

Friday January 16, 2009

StanChart sees local economy growing at 2.5%


Standard Chartered Bank Malaysia Bhd MD and CEO Julian Wynter remains upbeat on Malaysia.

WHAT is your view of the banking industry this year following the global financial crisis?

Malaysia is better insulated from the financial turmoil than many countries in the region and is in fundamentally better shape than during the Asian financial crisis.

With strong reserves, a current account surplus and a sound financial system coupled with the pre-emptive actions taken by the authorities, Malaysia is well positioned (to weather the economic slowdown).

Our house view is that Malaysia will grow at around 2.5% in 2009, lower than previously but a relatively shallow decline, before picking up again in 2010 to 5%. So, more muted but nonetheless positive growth.

But there will be challenges for all of us in 2009.

We do not expect a dramatic shift in lending practices but a broadly business-as-usual stance by most banks.

Julian Wynter

However, there will be more oversight where the extreme volatility in some markets has created stress. We should expect tightening of underwriting standards in the market.

For StanChart Malaysia, our standards are already robust and we continue to apply them.

At the same time, there may be a focus on collateral both to ensure optimisation of capital so that lending can remain in place and focus on pricing for risk – one of the factors which has contributed to the global financial crisis.

For any company facing difficulties, restructuring remains the best approach and key in this period will be transparency in data and communications from both parties.

What is your strategy to ride out the economic slowdown?

The key will be sticking to basic principles and ensuring the strength and welfare of the existing customer base.

This means providing relevant support to them and where possible allowing them to capitalise on opportunities that adjusted asset values will create.

For this reason new customer acquisition will be slower.

In retail, for example, we will back off some of the test cells we have been working on in some more marginal segments.

Loan-to-value and debt service ratios criteria are likely to be lower than in the recent past.

For our staff, the slowdown will still provide some excellent learning opportunities which will be very valuable over their careers. Our emphasis will be on teamwork, speed of communication and ensuring a sense of collective responsibility.

Any bad news must travel fast and be acted on quickly; we cannot be distracted by agonising over who is at fault. But in any environment there are also opportunities and we must be alert to those.

What are the group’s ambitions in terms of expanding the operations and business?

StanChart has a long heritage in the country and we take pride in the depth and strength of this partnership.

We’ve made significant investments in our Malaysian franchise, most recent being our Islamic business where we launched our full fledged Islamic bank – Standard Chartered Saadiq Bhd.

In the next three to 12 months, we aim to open three more Islamic branches.

We will continue to focus on improving the quality of our service and developing customer-focused access and channels of distribution. Malaysia has been good to StanChart and we want to continue to justify that stance.

We’ve been in this country for over 130 years and we fully intend to be here for another 133 years!

New products which StanChart plans to come out with this year?

Client demand for our products and services will continue to remain strong.

Given the changing demand in the marketplace, we will offer more high-yield deposit products such as structured deposits, and focus on developing and delivering more syariah-compliant products and services.

As always we will be listening to our clients and trying to innovate and develop in line with their requirements.

Goals for the banking group this year?

Our goal continues to be the world’s best international bank, leading by example in being the right partner to our customers – both corporates and individuals.

We expect to continue to grow and to consolidate the progress made this year.

Product and capability acquisitions made over the last few years will ensure continuing relevance and client focus.

We also take very seriously the responsibilities we have to contribute in the communities in which we operate.

We will focus on deepening relationships with existing clients, adding product and service sophistication that clients are asking for and sticking to our footprint markets in Asia, Africa and the Middle East so that we continue to build sustainable growth.

  • E-mail this story
  • Print this story