WHAT FINK MIGHT DO WITH BGI - FTSE

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TAREK ANWAR, GLOBAL HEAD OF SALES, TRANSACTION BANKING, STANDARD CHARTERED 40 Face to Face TRANSACTION BANKING IS coming into its own, holds Tarek Anwar, global head of sales, Transaction Banking at Standard Chartered in Singapore. It is not just Anwar’s view. The quality of transaction banking delivery is playing a greater role than ever in determining which banks are chosen by corporates as their primary relationship banker, according to new research from banking analyst firm Tarek Anwar, global head of sales, Transaction Banking, Standard Chartered. Photograph kindly supplied by Standard Chartered. August 2009. THE PRIME OF TRANSACTION BANKING East & Partners. In the East & Partners May 2009 survey of Asia’s top 1,000 institutions, Standard Chartered garnered one of the biggest gains in primary and secondary transaction bank recognition, rising from 31% from 28.5%. Anwar professes no surprise at the surge of interest by banks in the segment “as it encompasses the backbone of institutional and corporate banking relationships. It is important Standard Chartered continues to refine its Transaction Banking business to better align the bank with its intention of becoming a global leader in cross-border as well as domestic transaction banking. As the bank's ambitious transformation continues, it could become the dominant emerging market bank for years to come, believes Tarek Anwar, global head of sales for transacton banking at the bank. to define what might be the future of the transaction banking industry and refine the industry outlook”. He adds: “There is no doubt that transaction banking is growing, but is this growth straightforward and all-round? Or are we responding adequately to the currents in the market?” According to Anwar, the market has already undergone substantive change since the pre-September 2008 period. Despite interest margin compression and some US competitors dumping pricing, clients are showing a strong preference to transaction banks that help them create value. Moreover, he explains, change in the way they view counterparty demonstrates that corporations and institutional investors have sought fewer solid but more comprehensive relationships with their bankers. At the same time, he notes the barriers to entry in the business have meant that long-term providers, “who have shown commitment to regional markets, have seen a gravitation of business towards them. Commitment is key and clients recognise that”. Anwar says there are three main drivers of the business: “Getting deeper with the clients, creating a S E P T E M B E R 2 0 0 9 • F T S E G L O B A L M A R K E T S
igger wallet and improved crossselling. That in a nutshell is the overarching tactics with the overall strategy of being the leading bank in the segment.” In addition, he stresses the following qualifiers: “Balance the dash for growth with vigilance on risk and ensuring the quality of operations matches the quality of service that is offered to clients. “Transaction banking—defined as cash management, trade finance, clearing and securities services—makes up over 45% of client revenue globally,” says Anwar. “We have a lot of momentum in this business and we are positioned in those areas of the world with fastest growth. Our aspiration is to become a top provider of transaction banking services in all the key countries of our regions.” For banks that can succeed in growing and retaining market share, transaction banking is a very attractive business. It attracts liabilities, has low capital usage, earnings stability and return on equity—all valuable characteristics for banks today that are refocusing on more stable business areas to deal with the current downturn in the financial industry, highlights Anwar. For him, the business“is about evolutionary patterns, among industries and among regions. It has become a cultural interaction, as we are dealing with people influenced by their corporate culture and their demands are similar around the world, irrespective of their market.” Even so, the emerging markets bank differs in many ways, different from its European or American peers. Standard Chartered derives over 90% of its profits from Asia, Africa and the Middle East. Serving both consumer and wholesale banking customers, the bank combines deep local knowledge with global capability to offer a wide range of financial products and service solutions. Anwar explains that Standard Chartered had been focused F T S E G L O B A L M A R K E T S • S E P T E M B E R 2 0 0 9 on building the franchise for at least 150 years, and, for transaction banking, can now leverage extensive networks with deep expertise and capabilities in Asia, Africa and the Middle East. “We have witnessed a substantive evolution as corporates expand their geographic spread. Take a large Chinese corporate: they are as concerned with supply chain issues, working capital, risk and the introduction of efficiencies as any large corporation.” Moreover, he states:“The supply chain and working capital finance is the backbone of a company. So any changes you make can easily enhance the performance of the company. It creates a completely different level of relationship with a bank, one of a partner and adviser.” Responsibility Anwar works out of the bank’s Singapore office and reports directly to Karen Fawcett, Standard Chartered’s Singapore-based group head of transaction banking. Since arriving at Standard Chartered three years ago, Anwar has had responsibility for the bank’s cash management, trade, clearing and securities services sales globally. All of Standard Chartered’s regional transaction banking heads, located throughout its network in Asia, Africa and the Middle East, report directly into him. Throughout his 28-year career, Anwar has worked with clients across all aspects of clearing, cash, trade and treasury management, including reengineering projects, treasury centralisation programmes and shared services centres. His experience also extends to advising on change management, complex implementations and project management, skills he has subsequently brought to bear in his current role. The impact has been substantive. He notes: “We are much more client centric today. We no longer work in product or geographic silos, a malaise some competitors suffer from. We aggressively encourage leveraging of the bank’s extensive network. We no longer measure people by revenue generated just in their own country. Our sales teams follow an origination model tagged to their clients, irrespective of where they act, and this works really well for our clients as we help them grow cross-border.” In addition to Asia, Anwar stresses the equal importance of the Middle East and Africa region to Standard Chartered’s recent and future growth. He says: “The focus for the bank is on maximising its network, focusing on its people and products and services to create value, and also focusing on segmenting services for specific industries and clients in different stages of evolution.” Anwar adds: “For example, small and mid-market companies are no longer just locally focused, but the local banks can’t truly help them with their new international opportunities or cross-border suppliers or buyers. The local banks don’t have the same ‘reach’ power of a bank like Standard Chartered.” Anwar thinks that the financial crisis has created a new mood of realism in the markets:“The few banks like us that continued to be ‘open for business’ during the crisis, were able to have positive dialogue with clients about balancing the risk and the nonrisk business. People are much clearer these days about what is key.” “Part of it is that people are reviewing the basics more frequently these days. But some part of it is also a greater realism on what can be done by the bank to help create value. It is safe to say though that paramount in all this, the equation still tends towards the client and we tell our teams: ‘Don’t compete on price, compete on value.’” 41
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