STANDARD CHARTERED BANK: An institution that evolved during the expansion of European colonial empires is today committed to building business in developing nations

Standard Chartered Bank's presence in Thailand dates from 1894, but its business in the region goes back to the middle of last century.

It evolved from two banks: The Chartered Bank of India, Australia and China in Calcutta,
founded in April, 1858, and the Standard Bank of British South Africa, then operating in Britain's African possessions.

‘Our primary emphasis has been on cashflow and sound management. We spend research and development money on product improvement and innovation. We always plan for the future. We always plan for the future. We spend a lot of money on our people, as we think they are the key to the success of any organisation’
DRU NARWANI
chief executive

In 1969, the two banks merged to form The Chartered Bank. In more recent years, it has
returned to its roots, aiming to carve out a niche as a bank for developing nations.

"We gradually pulled out our peripheral businesses in the OECD (Organisation for Economic Cooperation and Development grouping wealthy nations) because we wanted to focus on emerging markets," said Dru Narwani, chief executive of the Thai operations.

The bank wanted to provide a global network for customers in the OECD but not compete for business in those countries with local banks.

Mr Narwani said the bank had changed its management, directions, policies and business
strategies in recent years. It began to expand its branch network in developing countries and now has one of the largest of any foreign bank in Africa, the Middle East and Asia.

"We are in every Asian country except North Korea. We decided to be in this part of the
region and learnt well how to i-iianage our risks and conduct business profitably.

" The decision to enter developing markets had been timely, he said, as it was now difficult to get new licences, although it had recently applied in Laos and Cambodia.

Standard Chartered is ranked as the 92nd -largest bank in the world. This may look small
but the bank has been named as the biggest global bank, meaning the number of businesses it has outside of its home base, Britain. More than 70% of its business is abroad.

"In size, we are not that big in comparison to other banks. Our chosen strategy is not size. We have concentrated on providing product expertise, risk control, a global presence and a long-established and therefore reliable and knowledgeable banking network.

"We want to be the bank of choice in the areas 'we operate and, if you measure us by that objective, we are highly successful," Mr Narwani said.

"The largest profits are generated from Hong Kong, Singapore and Malaysia; then come
Thailand and Indonesia. We have been aware that we need to expand our network in some of the 47 countries in which we are present. We need to spread out further."

Standard Chartered started its Thai operations as The Chartered Bank. Earlier, in the 1860s, the bank appointed a German company as its agent in Bangkok.

Its main business in the early days was the purchase, from Vhinese rice millers in Bangkok, of bills drawn against shipments to Hong Kong and the colony of Straits Settlements (Singapore, Penang, Malacca and, from 1906, Labuan).

Turning to the present day, Mr Narwani said the results for the past six months' operations were satisfactory, given the circumstances.

"Despite the crisis, our strategy has not changed. We still think there is great potential for growth in this region. We continue to be bullish on Thailand in the long term.

"If you have been in a country for more than 100 years, you don't start thinking about changing the longer-term strategy because of things that happen temporarily. This is a major dent to, the economy, and to our plan, but the fundamental goal hasn't changed."

The bank had been very careful to avoid involvement in the commercial property market, a policy that had now been fully justified.

"Our primary emphasis has been on cashflow and sound management. We spend research and development money on product improvement and innovation. We always plan for the future. We spend a lot of money on our people, as we think they are the key to the success of any organisation."

Mr Narwani said he was confident Thailand would come out of the crisis much stronger than before. "Seventy percent of our business is in this part of the world, so for Standard Chartered this is home."

The bank runs three lines of business: corporate and institutional banking, consumer banking and treasury services.

Corporate and institutional banking also includes custodial services. In the corporate sector, the bank has a customer base of large multinationals. But serving trade is its prime focus and it is looking to small and medium-sized export businesses.

Consumer banking is divided into three parts: branch banking (mortgage an personal loan financing and deposits), credit cards and consumer finance, which focuses on vehicle purchases.

It is limited by regulation to one branch in Thailand, but more than 20 in each of Singapore, Malaysia and India, and 100 in Hong Kong.

Mr Narwani said that despite the entry of large companies to Thailand's consumer finance sector there was still room for growth. Consumer banking had become much more important to the bank in the past five years.

Treasury services were the third sector.

Standard Chartered was among the foremost treasury operators in Thailand and many other countries, he said.

When Thailand's economy improved, the bank would be a major player, with or without a full banking franchise.

Now was a good time to investment in Thailand as prices were at historical lows and the economy would improve sooner or later.

"Thailand is changing rapidly in the way it does things. The policies are more universal and this is building confidence on both domestic and international fronts," he said.

"There are good governance rules now being put into force ... there's transparency, more communication with the world. The government is enforcing new and old laws to clear up problems.

"We may not achieve the super-growth levels of the past in the near term, but the continuation of reforms along with the stability of the government will help the country get out of the crisis," he said.

Standard Chartered Bank, Bangkok Branch
Established: 1894
Major shareholder: Standard Chartered Plc
Registered capital: 2.4 billion baht
Main businesses: Corporate and institutional banking, consumer banking and treasury
Subsidiaries: Standard Chartered (Thailand) Co Ltd, Thai Exclusive Leasing Co Ltd (joint venture with Thai Rung Union Plc)
Number of employees (1997): 466
1997 gross revenue: 53.3 billion baht

Worldwide
Headquarters: London
Number of countries: 49
1997 gross revenue: 2.2 billion
1997 pre-tax profit: 870 million