Standard Chartered Bank recently joined the ranks of a select few in Vietnam, commencing operations as a locally incorporated bank. The bank continues to make further inroads into the market and play a key role in Vietnam and its banking industry.
As one of the oldest international banks in Vietnam, Standard Chartered has introduced products, skills and banking standards to the country. “Our growing presence here will enable us to be an effective partner in Vietnam’s rapid progress towards growth by introducing global best practices in banking,” says Mr Ray
Ferguson, Standard Chartered’s CEO for South East Asia and Singapore.
While raising the bar for the entire banking industry, Standard Chartered has created a more robust banking sector to support economic growth. With its expertise in operating in over 70 markets worldwide, the bank has introduced to Vietnam a number of its award-winning products, albeit with a local flavour. For instance, it was the first to market in Vietnam a no-frills, high-interest savings account called e$aver for retail customers, and also recently launched its acclaimed online banking portal for corporates, Straight2Bank, in Vietnamese.
With the government’s estimate that over the next ten years more than $100 billion of long term financing will be required to sustain Vietnam’s economic progress, Standard Chartered Bank has stepped up to the challenge. The bank has been a bridge for Vietnamese companies to access international capital markets to raise long term financing for projects, at a time when liquidity has been a scarce resource. In 2008 – which was one of the most challenging years for the financial industry globally – it played a key part in financing in Vietnam, including being the lead arranger of a US dollar syndication for Vinacomin. With the bank’s footprint in Asia, Africa and the Middle East, it has managed to play a leading role in fundraising in these markets through international syndications and bond issues.
Standard Chartered Bank has been an active voice and key advisor at banking and business forums in Vietnam. Mr Ashok Sud, the bank’s Chief Executive for Vietnam, Laos and Cambodia, has served as the Chairman of the Banking Working Group for the Vietnam Business Forum (VBF). He is currently the Co-Chairman of the Trade and Investment sub-committee with the Vietnam-EU Business Forum (VEUBF) and Vice-Chairman of the European Chamber of Commerce in Vietnam (EuroCham). The bank has also been an advisor for companies looking to move into Vietnam. Standard Chartered believes its increased investment in Vietnam will be a magnet for more foreign direct investment (FDI) to the country. “Large investors always seek their bankers’ opinion before investing in countries,” says Mr Sud. “We often quote our local incorporation and investment in Vietnam to potential investors as an example that we are ‘walking the talk’.”
Vietnam – a Key market
Though headquartered in London, Standard Chartered’s business footprint since its inception almost 160 years ago has always been Asia, Africa and the Middle East, with Asia playing a predominant role. Standard Chartered derives 80 per cent of its operating profits from Asia, Africa, the Middle East, and Vietnam remains an important market for the bank. Standard Chartered was in fact the first foreign bank to invest in a local bank in Vietnam. Its strategic stake in and partnership with Asia Commercial Bank (ACB) has created synergy for both Standard Chartered Bank and ACB over the past four years. “Vietnam is a growing and important market for Standard Chartered Bank and our confidence in its future is underpinned by our substantial investment of approximately $500 million in the country,” says Mr Jaspal Bindra, CEO Asia.
Mr Sud adds: “We have been in Vietnam for 105 years and are optimistic about its economy for both the short and long term because the country has strong demographics, political stability and a proven economic track record. This is a good environment for financial services to develop. In terms of product sophistication and depth of the banking market, there is still a lot of ground that must be covered. However, given the young demographics of the Vietnamese population, consumerism and therefore consumer financing is still at a nascent stage and we believe these will become more sophisticated and grow rapidly over the next decade.”
Strength of the group and footprint
Emerging markets have historically been less predictable than the developed economies of the West, but with a financial crisis that has challenged conventional wisdom, Standard Chartered is at the right place at the right time. While the subprime debacle has sent a number of its peers reeling, with very limited exposure to Europe and the US on the one hand and the relative resilience displayed by Asian economies on the other, Standard Chartered has emerged from the crisis relatively unscathed.
The Bank’s 2009 interim results have been outstanding: income up 14 per cent to $7.96 billion and profits up 10 per cent to $2.84 billion. In all, its income and profits have more than doubled over the last five years, primarily as a result of organic growth. Such a stellar performance during the worst recession in decades can be explained by the Bank’s very clear strategy and its discipline in sticking to it. That strategy is to stay focused on its core banking operations. While some banks took on high-risk lending and mortgage-backed securities in a quest for profit, Standard Chartered avoided these complex assets that have impacted other banks.
The Bank has seized opportunities through its position of strength, gaining market share and attracting talent. It has also boosted lending in Asia at low risk by participating in government loan-guarantee programs. In addition, Standard Chartered has taken bold steps in investing in and building its brand profile globally. In September 2009, the Bank scored a deal with Liverpool Football Club to be the Club’s main sponsor from 2010 – 2014. The agreement will see the bank’s name and logo appear on the Liverpool shirt and will drive a “step change” in brand recognition that will provide an additional catalyst for business growth, according to Mr Peter Sands, Standard Chartered’s Group Chief Executive.
Awards and recognition
Standard Chartered Bank’s track record of performance has been recognised through numerous international awards. It won the “Bank of the Year in Emerging Markets” at The Banker Awards 2008. Some of its prestigious wins for Consumer Banking include the “Best International Bank of the Year” at the Asian Banking and Finance Retail Banking Awards 2008 and the “Best Regional Retail Business in Asia” at The Asian Banker Excellence in Retail Financial Services Awards 2008.
In wholesale banking, the bank has been recognised across a number of areas, including the “Best Trade Finance Provider in Asia”, “Best Bank for Risk Management in Asia”, “Best Supply Chain Finance Provider in Asia” and “Best FX Derivatives Provider – Asia” at the Global Finance Awards 2008. It also garnered the “Best Project Finance Advisory House”, “Best Asian Currency Bond House”, “Best Securitisation House” and “Best Structured Trade Finance Bank” Awards at The Asset Triple A Asian Awards 2008, amongst others. In Vietnam, the Bank has won the “Most Favourite International Bank” title at the Golden Dragon Awards for two consecutive years, since 2007.
Standard Chartered employs almost 70,000 people, made up of over 125 nationalities, of which about 70 are represented in senior management. In Vietnam the company employs over 370 employees, of whom 97 per cent are Vietnamese and over 70 per cent are women, even in the top echelons of the Bank. The bank prides itself as being an equal opportunity employer, with a strengths-based approach as the key driver for talent. It has been named an “employer of choice” across a number of its markets, also winning awards for championing employee engagement and work-life balance, through initiatives such as offering staff an additional two days of volunteering leave to pursue community programs.
Going beyond banking
Committed to being the right partner for its stakeholders, Standard Chartered Bank believes in building a sustainable business over the long term and is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity. Its achievements in Corporate Social Responsibility have been recognised globally. At “The Banker CSR Awards 2008”, Standard Chartered won the “Best Overall Bank” and “Banking the Unbanked” Award for giving the poor access to financial services. Standard Chartered was also the runner up for the “Sustainable Bank of the Year” at the 2009 Financial Times Sustainable Banking Awards.
In Vietnam, under the Bank’s “Seeing is Believing” community program, from 2007 to 2010 $600,000 will be contributed towards operations, medical equipment, education, training and awareness to help over 120,000 poor Vietnamese, in partnership with Christian Blind Mission and Fred Hollows Foundation. Another one of the Bank’s community initiatives – to raise HIV/AIDS awareness amongst students through training – has reached out to 2,000 students from over 20 institutions in Hanoi and Ho Chi Minh City in the first half of 2009. The Bank plans to train another 1,000 students for the rest of the year.
In addition to being a key player in the Renewable Energy and Environmental Financing (REEF) sector, Standard Chartered Bank has taken strong measures to protect the environment in its footprint. Over the past few years, the bank achieved a 20 per cent reduction in paper use per full-time-employee (FTE), a 14 per cent reduction in carbon emissions from energy consumption per FTE and a 22 per cent reduction in CO2 emission from air travel per FTE.
In Vietnam, more than 1,000 trees will be planted by end 2009 through a “Go Green” initiative of Consumer Banking. This will also benefit poor rural communities in Quang Tri province. Most recently, the bank also championed thought leadership in REEF, by being a key sponsor of “GreenBiz”, a green business conference and exhibition held in Hanoi on September 17 and 18, jointly organised by EuroCham and the Vietnam Chamber of Commerce and Industry (VCCI). Analysts believe Standard Chartered’s focus on its core strengths and sustainable business approach will continue to serve it well. It is certainly a bank with a promise of greater things to come.