StanChart eyes leading role in yuan
Standard Chartered Bank is supporting regulators in both Britain and Hong Kong with the development of an offshore yuan business in London, says chief executive Peter Sands.
'We will play a leading role in the use of the yuan in London,' said Sands, who earlier this week was at a meeting for company executives in Beijing addressed by Premier Wen Jiabao.
Britain's finance minister George Osborne in January announced that London would seek to become a hub for offshore trading in yuan. But he said this would complement Hong Kong's role and floated the idea of a tie-up between the two financial centres that would include extensions in currency trading hours.
Sands echoed these comments yesterday, saying that for London, the world's largest international banking centre, to join Hong Kong as a centre for offshore yuan business was a logical next step in the development of the market. 'I don't think this should be seen as something that detracts from Hong Kong's role,' said Sands.
The chief executive of the Hong Kong Monetary Authority, Norman Chan Tak-lam, said in January that by establishing appropriate links with Hong Kong's offshore yuan platform, banks in different parts of the world would be able to provide a comprehensive range of yuan banking and financial services to meet the rapidly increasing demands of customers.
Commenting on the latest developments in Europe, Sands said that even though the European Central Bank had launched a long-term refinancing operation, or LTRO, in December, and a package was made for Greece, this had only given markets some breathing space. 'We are not of a view that everything is going to be OK now. There is still a huge amount of work to do and many things can still go wrong.'
The LTRO injected Euro489 billion (HK$5 trillion) into Europe's banking system via three-year loans. Standard Chartered Bank did not access the ECB's three-year loan allocations and had no plans to do so, Sands said.
On Standard Chartered's own development, Sands said the bank would continue to increase staff numbers this year. The bank's mainland operations accounted for most of last year's global headcount growth of about 2,000 and contributed over 31 per cent to total pre-tax profits reported by the group for 2011.
The bank has 84 outlets on the mainland and Sands said the network would be expanded. 'It is likely we may hit a hundred outlets by the end of the year,' he said, but this would depend on necessary approvals and finding the right locations.
The bank made losses of about US$100 million in consumer banking on the mainland last year, as it invested in building its franchise, but it said it was determined to keep making inroads in that market.
The bank was still aiming for double-digit growth in revenue this year, despite setbacks last year in two of its largest Asian markets, South Korea and India.