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INTERVIEW: Global picture getting scarier

72-TRE-167-Standard Cahrtered CEO shankarQ&A.pdf - Adobe Reader

Viswanathan Shankar, Standard Chartered CEO, Middle East, Africa, the Americas and Europe, talks Europe and the GCC region.

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July 18, 2012 10:00 by



There is another aspect which is positive for us: the withdrawal and retreat of European banks played to our strengths, because we remained open for business. So, if you go back to the Lehman Brothers’ crisis of 2008, we actually gained market share. A lot of banks – not just European banks – retreated. We picked up market share.

India is going to experience its worst growth in 10 years or so. . .

Yes.

China is slowing down.

Yes.

So it’s kind of getting scarier, the global picture.

I wouldn’t say scarier. I think the most important word is growth. Still, these are two economies that are growing. India’s growth has been 5.3 percent and China’s target is 7.5 percent, but they might exceed it. Still, these are economies that are growing at a fast rate. And you will have a slight mod­eration of growth in India’s scales because it is a bit of a political and policy paralyses. But, overall, we are still growing, and in the longer term you have to be very optimistic on their growth prospects. In fact, you have to be optimistic regardng Asia’s growth prospects. Why? Because de­mographics are in its favor, there is a young population in most countries, high skill levels and education levels, which they have all invested in in the past decade or so. Many of these coun­tries are exceptionally well managed in their financial position; their fiscal balances are in good shape. Many of them have large reserves. The govern­ment debt to GDP is pretty low. The inflation rates are very low and the domestic financial markets have been improved, particularly post-Asian financial crisis. They have all learnt tough lessons and have looked at the maths.

How is your bank positioned in the GCC? If you could outline the top three markets in terms of verticals, where are you focusing?

We have been in the GCC for more than 90 years. And we have on-the-ground presence in the UAE, Bahrain, Qatar, Oman, Lebanon – and Pakistan, of course. The three biggest markets for us are the UAE, Bahrain and Qatar. We have also opened a pres­ence in Saudi Arabia through the capi­tal market license. Our business contin­ues to do very well. We have the largest trading floor of any institution in the Middle East. We have 200 traders in Dubai who not only trade in the GCC, but also out of Dubai, particularly com­modities and so on. It is a pretty solid presence we have. We have close to 8,600 people, 70 different nationalities. Our top line has been growing consis­tent with the rest of the bank in mid teams over the past years, and increas­ingly as the Middle East becomes an in­termediary in the flows between Africa and Asia.

In fact, between Latin America, Africa and Asia, and because of its geographic position, it plays to our advantage.

How come you are not really present in Saudi Arabia? Isn’t that a big gap in the market?

Yes, we recognize the gap, which is why we took the capital markets license. Now we have people on the ground. It is still the early stages, but the business is doing very well. They are very focused on a handful of corporate, Saudi large corporates and financial in­stitutions. Our business focus in Saudi is not domestic Saudi, but cross-border Saudi. It’s more about Saudi corpora­tions that are going out to China or Africa or Asia. And it’s also about Asian com­panies like the Koreans who are coming into Saudi, particularly into the con­tracting sector.

- By Ranvir Nayar

*First published on Trends



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