Standard Chartered

Standard Chartered PLC
Type Public limited company
Traded as LSESTAN
SEHK2888
OTCBB: SCBFF
NSESTAN
Industry Banking, Financial services
Predecessor Standard Bank
Chartered Bank
Founded 1969 (London)
Headquarters London, United Kingdom
Area served Worldwide
Key people John W. Peace
(Chairman of the Board)
Peter A. Sands
(CEO)
Products Credit cards, Consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, wealth management
Revenue US$ 16.06 billion (2010)[1]
Operating income US$ 6.12 billion (2010)[1]
Net income US$ 4.23 billion (2010)[1]
Total assets US$ 517 billion (2010)[1]
Total equity US$ 27.930 billion (2009)[1]
Employees 84,061 (2010)[1]
Website www.standardchartered.com

Standard Chartered PLC (LSESTAN, SEHK2888, OTCBB: SCBFF, NSESTAN) is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries. It operates a network of over 1,700 branches and outlets (including subsidiaries, associates and joint ventures) and employs around 80,000 people.

It is a universal bank and has operations in consumer, corporate and institutional banking and treasury services. Despite its British base around 90% of its profits come from Africa, Asia and the Middle East.

Standard Chartered has its primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £33 billion as of 23 December 2011, making it the 13th-largest company on the London Stock Exchange.[2] It has secondary listings on the Hong Kong Stock Exchange and the Indian Stock Exchanges. Its largest shareholder is the Government of Singapore-owned Temasek Holdings.[3]

They also sponsor Liverpool Football Club, of the English Premier League.

Contents

History

The name Standard Chartered comes from the two original banks from which it was founded and which merged in 1969 – The Chartered Bank of India, Australia and China, and The Standard Bank of British South Africa.[4]

Chartered Bank

The Chartered Bank was founded by Scotsman James Wilson following the grant of a Royal Charter by Queen Victoria in 1853.

Chartered opened its first branches in Mumbai, Kolkata and Shanghai in 1858, followed by Hong Kong and Singapore in 1859.[4] The Bank started issuing banknotes of the Hong Kong dollar in 1862. With the opening of the Suez Canal in 1869 and the extension of the telegraph to China in 1871, Chartered was well placed to expand and develop its business.[4]

Standard Bank

The Standard Bank was a British bank founded in the Cape Province of South Africa in 1862 by another Scotsman, John Paterson.[4] Having established a considerable number of branches, Standard was prominent in financing the development of the diamond fields of Kimberley from 1867 and later extended its network further north to the new town of Johannesburg when gold was discovered there in 1885.[4] Half the output of the second largest gold field in the world passed through The Standard Bank on its way to London.

Standard expanded widely in Africa over the years, but from 1883 to 1962 was formally known as the Standard Bank of South Africa. In 1962 the bank changed its name to Standard Bank Limited, and the South African operations were formed into a separate subsidiary which took the parent bank's previous name, Standard Bank of South Africa Ltd.

1969 to 2000

Both banks had acquired other smaller banks along the way and spread their networks further. In 1969, the banks decided to merge,[4] and to counterbalance their existing network by expanding in Europe and the United States, while continuing their expansion in their traditional markets in Asia and Africa.

In 1986 Lloyds Bank of the United Kingdom made a hostile takeover bid for the Group.[5] The bid was defeated however it spurred Standard Chartered into a period of change, including a series of divestments notably in the United States and South Africa.

In 1987 Standard Chartered sold its remaining interests in the South African bank, and since then the Standard Bank Group has been a separate entity.

In 1992, scandal broke when banking regulators charged several employees of Standard Chartered in Mumbai with illegally diverting depositors’ funds to speculate in the stock market. Fines by Indian regulators and provisions for losses cost the bank almost 350 million pounds, a third of its capital.

Scandal erupted again in 1994, when the Sunday Times of London wrote that an executive in the bank’s metals-trading arm had bribed officials in Malaysia and the Philippines in order to win business. The bank, in a statement on 18 July 1994, said there were “discrepancies in expense claims” that “included gifts to individuals in certain countries to facilitate business, a practice contrary to bank rules.'

In 1997, Standard Chartered sold its metals trading arm to Toronto-based Scotiabank for $26 million. In 1994, the Hong Kong Securities and Futures Commission found that Standard Chartered’s Asian investment bank had illegally helped to artificially support the price of new shares they had underwritten for six companies from July 1991 to March 1993. The bank admitted the offense, apologized and reorganized its brokerage units. The commission banned the bank from underwriting IPOs in Hong Kong for nine months. Standard Chartered’s Asian investment banking operations never recovered, and in 2000 the bank closed them down.[6]

The bank fully recovered in late '90s, during this time, the bank sold off holdings in continental Europe and the Americas, sold the headquarters building (lease-back) and branch properties in Hong Kong. In 2000, Standard Chartered acquired Grindlays Bank & Chase Manhattan Bank Hong Kong retail banking business. The ethics issues and financial losses triggered turmoil in Standard Chartered’s London executive suite. The bank went through three CEOs in three years: Malcolm Williamson was replaced in 1998 by Rana Talwar, who was in turn unseated by Mervyn Davies in 2001. By the time Davies took over, his predecessors had systematically sold off the bank’s holdings in continental Europe and the Americas.

Former CEO Talwar traces Standard Chartered’s troubles over the years to its failure to hire local talent. The Indian-born Citigroup Inc. veteran became the bank’s first non-British CEO when he was appointed in 1998. [6]

21st century

In 2000, Standard Chartered acquired Grindlays Bank from ANZ Bank, increasing its presence in private banking and further expanding its operations in India and Pakistan.[7] Standard Chartered retained Grindlays' private banking operations in London and Luxembourg and the subsidiary in Jersey, all of which it integrated into its own private bank. This now serves high net worth customers in Hong Kong, Dubai, and Johannesburg under the name Standard Chartered Grindlays Offshore Financial Services. In India, Standard Chartered integrated most of Grindlays' operations, making Standard Chartered the largest foreign bank in the country.

In 2004, Standard Chartered Bank and Astra International (An Indonesian conglomerate, a subsidiary of Jardine Matheson Group) took over PermataBank and in 2006, both shareholders increased their joint ownership to 89.01%. With 276 branches and 549 ATMs in 55 cities throughout Indonesia, PermataBank has the second largest branch network in Standard Chartered organization.[8]

On 15 April 2005, the bank acquired Korea First Bank, beating HSBC in the bid.[9] Since then the bank has rebranded the branches as SC First Bank.

Standard Chartered completed the integration of its Bangkok branch and Standard Chartered Nakornthon Bank in October, renaming the new entity Standard Chartered Bank (Thailand).[10] Standard Chartered also formed strategic alliances with Fleming Family & Partners to expand private wealth management in Asia and the Middle East, and acquired stakes in ACB Vietnam, Travelex, American Express Bank in Bangladesh and Bohai Bank in China.

On 9 August 2006 Standard Chartered announced that it had acquired an 81% shareholding in the Union Bank of Pakistan in a deal ultimately worth $511 million.[11] This deal represented the first acquisition by a foreign firm of a Pakistani bank and the merged bank, Standard Chartered Bank (Pakistan), is now Pakistan's sixth largest bank.

On 22 October 2006 Standard Chartered announced that it had received tenders for more than 51 per cent of the issued share capital of Hsinchu International Bank (“Hsinchu”), established in 1948 in Hsinchu city in Taiwan.[12] Standard Chartered, which had first entered Taiwan in 1985, acquired majority ownership of the bank. Prior to the merger, Hsinchu was Taiwan's seventh largest private sector bank by loans and deposits as at 30 June 2006, but had suffered extensive losses on defaulted credit card debt. Standard Chartered merged its existing three branches with Hsinchu's 83, and then delisted Hsinchu International Bank, changing the bank's name to Standard Chartered Bank (Taiwan) Limited. Today Standard Chartered is the largest foreign bank in Taiwan in terms of branch network.

In 2007, Standard Chartered opened its Private Banking global headquarters in Singapore.[13] On 23 August 2007 Standard Chartered entered into an agreement to buy a 49 percent share of an Indian brokerage firm (UTI Securities) for $36 million in cash from Securities Trading Corporation of India Ltd., with the option to raise its stake to 75 percent in 2008 and, if both partners agree, to 100 percent by 2010.[14] UTI Securities offers brokering, wealth management and investment banking services across 60 Indian cities.

On 29 February 2008, Standard Chartered PLC announced it had received all the required approvals leading to the completion of its acquisition of American Express Bank Ltd (AEB) from the American Express Company (AXP). The total cash consideration for the acquisition is US$823 million.[15]

On 13 November 2008, Standard Chartered PLC announces that its subsidiary, Standard Chartered Bank (Hong Kong) Limited, has entered into an agreement to acquire 100 per cent of Cazenove Asia Limited, a leading Asian equity capital markets, corporate finance and institutional brokerage business, from JPMorgan Cazenove.[16]

On 12 September 2009, The Times newspaper in the United Kingdom reported that Standard Chartered had signed a record equaling £20million a season sponsorship deal with Liverpool FC to commence at the start of the 2010/11 Premier League season and last for four years,[17] in a deal equaling the record amount set by Manchester United's sponsorship deal with insurance giant Aon. Liverpool football club announced on the club's official website on 14 September 2009 that Standard Chartered bank will be the new shirt sponsor starting from 1 July 2010 to 2014, ending their 18-year sponsorship by Carlsberg Group.

On 27 November 2009, Dow Jones Financial News reported the city of Dubai will restructure its largest corporate entity. Amongst international banks, Standard Chartered has one of the largest loan portfolios in the Dubai market and the UAE as a whole, estimated to be $7.77bn in total. This amounts to 4.2% of Standard Chartered's total loans outstanding. Other impacted banks included HSBC, Barclays, and RBS. However, Standard Chartered said that any impairment arising from this exposure would not be material .[18]

Standard Chartered announced an agreement on 27 April 2010 to buy the African custody business from Barclays PLC. This was to provide the bank with custody capabilities in its markets across Africa.[19]

On 13 May 2010, Standard Chartered PLC launched the first-ever Indian Depository Receipt “IDR” offer [20] On 17 June 2010, Standard Chartered Bank And Agricultural Bank of China Strengthen Strategic Partnership. Hong Kong has been identified as a potential pilot region for the two banks’ co-operation journey. Standard Chartered’s and ABC’s aim is to co-operate to provide their corporate and individual customers with world class financial markets products. A joint co-operation committee will be formed by both banks to drive the strategic direction of the partnership. The committee will be co-chaired by Mr Peter Sands, CEO of Standard Chartered, and Mr Zhang Yun, President of ABC. [21]

In December 2010 Standard Chartered was recognised as the Global Bank of the Year in The Banker's Bank of the Year 2010 awards.[22]

Standard Chartered Breeze

Standard Chartered Breeze is a mobile banking application for the iPhone & iPad that can also be used on the computer. It is largely similar to the online banking services offered by other banks, with the exception of its function to issue electronic bank cheques. Launched in summer 2010 and aggressively marketed, the reviews have been generally positive. In addition, it has attracted an uncommon amount of attention due to many innovative marketing strategies it used to promote its product, mostly focussing on social media. Standard Chartered Breeze organised a blogger's meet for bloggers to preview Breeze, and it's Twitter campaign to give away a free iPad was extremely successful. To date, Standard Chartered Breeze's twitter page has more than three times the followers than their closest competitor.[23]

Breeze is currently only available in parts of Asia, primarily Singapore.

Senior management

Peter Sands is the chief executive of Standard Chartered Bank. His total annual reward package is $4,142,000, consisting of $1,516,000 salary and a bonus of up to $2,626,000.[24]

Notable employees past and present

John Major, who served as prime minister of the United Kingdom from 1990 to 1997, was employed by the bank from May 1965, when he joined them as an executive. He was transferred to Nigeria in 1967, and worked for the bank at home and abroad until he was elected to parliament at the 1979 general election as Conservative Party Member of Parliament (MP) for Huntingdon in Cambridgeshire.

See also

References

  1. ^ a b c d e f "Microsoft PowerPoint - Full_Year_2010_webPrint_Final.pptx" (PDF). http://files.shareholder.com/downloads/STANCHAR/1200173460x0x446956/a753c00f-67b0-4007-a36f-edc9b148eae7/Full_Year_2010_webPrint_Final.pdf. Retrieved 19 April 2011. 
  2. ^ "FTSE All-Share Index Ranking". stockchallenge.co.uk. http://www.stockchallenge.co.uk/ftse.php. Retrieved 26 December 2011. 
  3. ^ Lin, Liza (25 November 2008). "Temasek Raises Bet on Financial Stocks With StanChart". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601087&sid=aoXuC8OxIdAs&refer=home. Retrieved 19 April 2011. 
  4. ^ a b c d e f "Standard Chartered Bank History". Standardchartered.com. http://www.standardchartered.com/about-us/history/en/index.html. Retrieved 19 April 2011. 
  5. ^ "Offer sweetened by Lloyds Bank". The New York Times. 28 June 1986. http://query.nytimes.com/gst/fullpage.html?res=9A0DE1DF113DF93BA15755C0A960948260. Retrieved 2 May 2010. 
  6. ^ a b Lee, Yoolim (3 November 2009). "Standard Chartered 79% Return Overtakes HSBC With Asian Rebound". Bloomberg. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amezAf6Zd9hU&refer=china. Retrieved 19 April 2011. 
  7. ^ ANZ sells Grindlays for $1.3bn
  8. ^ "PermataBank in Brief". Permatabank.com. 14 April 2011. http://www.permatabank.com/en/corporateprofile/1/index.html. Retrieved 19 April 2011. 
  9. ^ Standard Chartered buys Korea First Bank
  10. ^ "Standard Chartered to Merge Its Branch with Local Subsidiary in Thailand". Highbeam.com. 29 April 2004. http://www.highbeam.com/doc/1G1-118462616.html. Retrieved 19 April 2011. 
  11. ^ Standard Chartered to buy 80.86% of Pakistan's Union Bank
  12. ^ "Standard Chartered to buy Hsinchu". Ibtimes.com. 29 September 2006. http://www.ibtimes.com/articles/20060929/standard-chartered-plc-hsinchu-international-bank.htm. Retrieved 19 April 2011. 
  13. ^ "Standard Chartered sets up private banking HQ in Singapore". Newsgd.com. http://www.newsgd.com/business/enterprise/200705290048.htm. Retrieved 19 April 2011. 
  14. ^ "Standard Chartered to buy 49% of UTI Securities". Thehindubusinessline.com. 24 August 2007. http://www.thehindubusinessline.com/2007/08/24/stories/2007082452431500.htm. Retrieved 19 April 2011. 
  15. ^ Clark, Andrew (18 September 2007). "Standard Chartered buys American Express Bank". The Guardian (London). http://www.guardian.co.uk/business/2007/sep/18/9. Retrieved 2 May 2010. 
  16. ^ Standard Chartered to acquire Cazenove Asia Limited
  17. ^ Liverpool’s £80m shirt deal equals biggest ever
  18. ^ Poon, Aries (21 December 2010). "Lender says no material impairment from Dubai". The Wall Street Journal. http://online.wsj.com/article/SB10001424052748704240504574585451907841622.html. Retrieved 19 April 2011. 
  19. ^ "Press release". Wholesalebanking.standardchartered.com. http://wholesalebanking.standardchartered.com/en/mediacentre/pressreleases/Pages/28042010.aspx. Retrieved 19 April 2011. 
  20. ^ "Standard Chartered Bank – Media Centre – Press Releases – 2010". Standardchartered.com. 13 May 2010. http://www.standardchartered.com/media-centre/press-releases/2010/documents/20100513/index.html. Retrieved 19 April 2011. 
  21. ^ "Standard Chartered Bank – Media Centre – Press Releases – 2010". Standardchartered.com. 17 June 2010. http://www.standardchartered.com/media-centre/press-releases/2010/documents/20100617/index.html. Retrieved 19 April 2011. 
  22. ^ The Bank of the Year Awards The Banker
  23. ^ Ng, Cameron (26 October 2010). "The Standard Chartered Breeze Twitter Campaign". Penn-olson.com. http://www.penn-olson.com/2010/10/26/standard-chartered-breeze-twitter/. Retrieved 19 April 2011. 
  24. ^ "Peter Sands: Executive Profile & Biography". BusinessWeek. McGraw-Hill. http://investing.businessweek.com/research/stocks/people/person.asp?personId=8307391&ric=STAN.L. Retrieved 10 August 2009. 

External links