Standard Chartered’s commitment to the Greater Bay Area is unquestionable. The GBA is a strategic priority for the whole bank, from senior management to those on the ground.
This is reflected in the way the firm has pumped money into the region with an eye on long-term gains rather than short-term profits. For example, the bank plans to invest $300 million over the next three years in China-related businesses, with a focus on the GBA region.
The GBA comprises the two special administrative regions of Hong Kong and Macau, and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong province.
StanChart was the first to create a chief executive role for GBA, naming veteran banker Anthony Lin to the position in August 2020. Since then, StanChart’s GBA footprint has grown, putting it in prime position to take the Asiamoney award for best international bank for GBA in 2022.
The firm’s priorities are clear: strengthen and deepen its global banking client base within GBA; increase the number of new economy clients; find cross-border wealth opportunities; and support Hong Kong companies keen to do business in GBA.
It has been a tough call, given the tight travel restrictions in Hong Kong and mainland China, and the spurt in Covid cases in both markets (plus the ensuing lockdowns). But StanChart did not waver in its commitment to GBA.
While the bank’s leaders do not want to divulge exact numbers, they say the GBA business grew in 2021 and is likely to show low double-digit growth in 2022. Much of that momentum comes from StanChart’s corporate, commercial and institutional business, thanks to opportunities in the new economy sector and trade finance within the GBA.
Central to StanChart’s GBA focus, however, is innovation and technology. In May, the bank officially launched a GBA Centre in Guangzhou, which will cover the nine-plus-two cities within GBA, serving clients across e-commerce, wealth management, financial markets and technology and innovation.
The firm put $40 million into the GBA Centre and expects to have more than 1,600 staff there by next year.
It also unveiled its first innovation hub in China this year, called axess labs. The aim is to solve real-time problems for clients using financial technology within axess. The bank has a platform called SC Ventures, which promotes innovation, disruption and the creation of alternative business models in financial services, within Hong Kong and mainland China.
StanChart is also willing to partner with third parties to provide its GBA clients with the best opportunities. In February, it announced a strategic partnership with Shenzhen Angel FoF Management Co, the largest government-backed angel fund in China. The two will support and develop fintech companies, especially small and medium-sized enterprises, in GBA.
StanChart tied up with supply-chain financial platform Linklogis in January. This is to provide efficient cross-border trade settlement for clients, with very little paperwork and a faster turnaround time when processing payments.
For supply chains, StanChart and TCL JianDanHui, a platform under consumer electronics firm TCL Group, unveiled a host-to-host implementation process last year, in effect a self-serve supply-chain finance platform. It has already completed its first supply-chain vendor pre-pay drawdown using the system, and is seeing interest from other SMEs keen to join.
StanChart bankers say they are constantly lobbying regulators, both in Hong Kong and in mainland China, to clarify and ease functionality within GBA, whether in relation to products on offer within the Wealth Management Connect (WMC) or regarding ways to transform the region further.
This close relationship with government bodies meant StanChart was one of the go-to banks when the Shenzhen local government sold a Rmb5 billion ($748 million) green offshore renminbi bond in Hong Kong in October 2021. It was the first local government from China to sell a bond in the currency, and final demand for the deal exceeded Rmb17.4 billion. StanChart was one of 16 bookrunners on the transaction, and one of five non-Chinese firms to work on the deal.
StanChart worked on China Development Bank Hong Kong’s first dim sum bonds, which raised Rmb2.5 billion in June 2021. The proceeds were for lending to infrastructure-related initiatives in GBA.
The bank’s Guangzhou branch participated in a cross-border, foreign exchange trade-facilitation pilot programme in February, which was organized by the State Administration of Foreign Exchange. It was one of the first banks in the city’s Nansha district to be involved.
In April 2021, the bank launched its first GBA-themed global fund product linked to China’s Qualified Domestic Institutional Investor (QDII) scheme.
StanChart’s operations on the WMC, launched in October 2021, were affected by travel restrictions – just like many other banks. StanChart offers more than 100 investment products on the connect. It has dedicated relationship managers to explain these products to customers and has organized educational webinars and seminars to boost awareness about the connect’s potential.
The bank is positioning its GBA franchise astutely for whenever borders open up and business goes back to normal. Projects in the works include: a new partnership with a large Chinese bank; a way to give customers a virtual-reality experience of bank branches in GBA; and more technology-driven innovation.