Standard Chartered Plc is focusing on expanding its network and product range in China prior to the opening of the country's banking sector to foreign lenders, its top executive in China said on Monday.
Katherine Tsang, StanChart's China chief executive, told Reuters the Asia-focused lender would target small and medium businesses through a broader product slate, as it pushed to have 14 branches in the country by the year end.
"We are an SME (small and medium enterprise) bank in many areas, and we hope we can help entrepreneurs grow in China," Tsang said in an interview from her offices in Shanghai's financial district.
"But if you focus on lending, you're not bringing anything new."
She said StanChart was keen to expand beyond the bank's 14 branches next year, but declined to give a specific target as expansion in China is dictated by government approval of new branches and sub-branches.
"We will go to the max in terms of how many sub-branches we can open," said Tsang, the younger sister of Hong Kong leader Donald Tsang.
StanChart's plans put it neck and neck with global rival HSBC Holdings Plc in the race to have the biggest foreign network on the mainland.
"We want to actively participate in all the areas the country is opening up to foreign banks," said Tsang, who moved to Shanghai from Hong Kong in March to replace Martin Fish.
Beijing is fully opening up its bank sector to foreign competition in December 2006 as part of its WTO obligations and to spur higher operating standards among its local banks.
Foreign banks have been piling into the mainland to take stakes in domestic lenders and get a piece of China's $1.7 trillion in personal savings before the liberalisation.
StanChart invested about $120 million for the maximum allowable 19.9 percent stake in Bohai Bank, a new national lender based in Tianjin and expected to open later this year.
StanChart, which is also looking at investments in other Chinese banks, is satisfied with its current stake, Tsang said.
Other foreign institutions are lobbying Beijing to raise investment restrictions beyond the current 19.99 percent individual ceiling for the country's banks.
"At the moment, the prime task is getting (Bohai) to be a profitable bank," Tsang said.
She declined to go into details on the bank's other acquisition plans, other than to say the bank is still exploring its options. China Everbright Bank has long been signalled as a target for StanChart.
Lehman Brothers estimated last week that foreign investors had pledged or executed investment worth $17 billion in China's banking sector over the past 18 months - of which $13 billion was committed in the past four months alone.
Global rivals such as HSBC and Bank of America are among a group of banks that have purchased equity stakes, but StanChart has so far not bought into an existing Chinese bank.
"There is no pressure," to keep up with competitors' buying habits, she said. "We're careful in choosing our partner."
Foreign banks are also very excited about next year's opening of the consumer market, where they have been prevented from offering yuan-denominated services to retail customers.
One area of interest for StanChart is the credit-card business, where foreign lenders have been setting up joint ventures with mainland banks.
"It is something we'll definitely get into when it opens up," said Tsang, acknowledging that it may work with Bohai on a venture in that space.
"Once (Bohai's) open for business, we'll talk to one another," she said.
Comments
Comments are closed.