Banking on Asia | The star

KUALA LUMPUR: Malaysia is a key market for London-headquartered Standard Chartered (StanChart) plc banking group and has an important role to play in the lender’s overall Asian growth strategy.

Chief Executive Officer (CEO) for Asia, Benjamin Hung, said that after Singapore, Hong Kong, China and India, which remained the group’s top Asian revenue contributors, Malaysia and Taiwan were the ” next group” of countries that generated the most revenue in the region. .

“These are in the range of half a billion US dollars (RM2.2bil) each in annual revenue, so (they) are by no means small,” he told StarBiz in a exclusive interview here.

Hong Kong-born Hung, who was named the lender’s CEO for Asia in 2021, is currently on a six-week working trip that includes a stopover in Malaysia, where the bank has a long presence.

He said that in Asia, ASEAN was an extremely important bloc, on which he was “very positive”. “ASEAN is a very important and emerging consumer driver in itself and within ASEAN, Malaysia is one of the main pillars.

“I would name Singapore, Malaysia, Indonesia, Vietnam and Thailand as the main drivers, you have the others as well, but those are the ones that really shape the forward-looking agenda,” he said.

Ahead of his visit to Malaysia, Hung was in Singapore where he said the banking group would invest some S$1 billion (RM3.19 billion) over the next five years in the city-state.

Although there are no similar investment figures for Malaysia at the moment, Hung believes Malaysia has the potential to grow.

Stanchart Asia Revenues

“I think Malaysia has the potential to develop. The last two years have been tough, to be honest, for many markets in Asia due to Covid-19.

“Covid has taken the growth down, but I can feel that right now Malaysia is coming out of Covid quite well and geopolitically it’s not in the crossfire and it’s resource-rich,” Hung said.

He noted that sectors in the country that have growth potential include the components of solar energy, tourism, healthcare and electric vehicles.

“China is Malaysia’s largest trading partner and there are many significant opportunities for inbound investment in Malaysia.

“Interestingly, Europe and the United States are also very keen to leverage Asean and, for that matter, Malaysia,” Hung said.

According to him, as the only international bank with a network spread across the ten ASEAN countries, StanChart had a competitive edge over its peers in facilitating cross-border transactions and businesses.

He is confident that the lender will not exit any market in the ASEAN region, although not all of them impact the lender’s bottom line.

“Some are more impactful than others, some are naturally smaller but collectively they are a proposition to support and serve multinationals who want to come to ASEAN…as a pan-Asian network, we are second to none , I think it is very relevant.

When asked if there would be any form of reduction in this region if cost or relevance became an issue, Hung said Asia is a growth engine and as a whole a “very profitable”.

“Around 70% (revenue and profit) of the bank comes from Asia, so if you don’t expand from Asia, you won’t be able to generate growth.

“If you think about size, critical mass, then Asia has it, so the group is definitely keen on extracting growth and economically the global growth is coming from Asia.”

That said, Hung added, “That doesn’t mean we won’t optimize for less relevant or less productive areas, so I would never say never…”

Meanwhile, he noted that inflation remained a challenge as growth returned globally.

“In the United States, I think between inflation and growth, I see the central bank leaning towards fighting inflation, which may mean that growth will have to give way.

“Therefore, the world may have to go through a period of delayed impact on growth.”

Still, Hung believes that while inflation remains high in the United States and Europe, it is generally still manageable in Asia.

“Therefore, real growth will be more apparent in Asia than it will be in the West, in fact more than half of global growth will come from Asia…” Hung said.

Like most lenders, he expects StanChart to benefit from rising interest rates, despite inflationary pressures.

“When interest rates start to rise, it will benefit banks with strong balance sheets, so we should be a positive beneficiary and Malaysia will be part of that alongside other markets.

In the area of ​​sustainability and environmental, social and corporate governance, which are becoming more than just buzzwords these days, Hung said these are areas where Asia offers “a huge amount” of opportunities.

“However, it is very nascent, the standards are not fully aligned, but I think this is an area where we can be a big driver of change to support customers.

“Sustainability is one issue, the global wealth gap is another.

“We have to find ways to close the wealth gap because if it continues we’re going to have all kinds of social challenges,” Hung said.

As a bank, StanChart operates in about 50 markets, most of them emerging markets, he said.

As a way to help the less privileged, efficient and cheaper financing can be extended, Hung said.

“I think banks don’t just make money, that’s never been my philosophy, of course we’re a business entity, but as part of our business I think we have a role to play in solving what we think are global problems.

“That’s what we think as a bank we should be doing because otherwise we’re just another financial institution trying to make money.

“We have to believe there is a role we can play, we won’t be the solution for everyone but we have to play a part.”

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