Singapore, Hong Kong to make up half of StanChart’s affluent business in ‘ambitious’ expansion plans

SINGAPORE and Hong Kong will continue to make up half of Standard Chartered’s affluent business, as the bank embarks on “ambitious” plans to expand the franchise, said Judy Hsu, chief executive of wealth and retail banking at StanChart.

Singapore currently accounts for around 20 per cent of the affluent business, while Hong Kong contributes around 30 per cent. The growth of the two markets will likely remain in proportion, given the size of the respective markets, Hsu said in a media call on Wednesday (Dec 4).

StanChart said in an investor briefing on Tuesday that it will target US$200 billion in new assets, and double-digit income growth in its wealth business over the next five years. This builds on an earlier announcement, where the bank said it would cut back on its mass retail business in some markets, so that it can invest US$1.5 billion into its affluent business.

At StanChart, the affluent business represents clients with assets under management (AUM) of more than US$25,000. Clients in the highest “private” tier have a net worth of more than US$10 million, and those in the “priority private” tier have AUM of more than US$1 million.

Hsu said that Singapore is “very much an integral part of our overall affluent strategy”. It has a full retail franchise, ranging from private banking to mass retail through Trust Bank – its collaboration with the National Trades Union Congress.

Hong Kong as a gateway

Meanwhile, Hong Kong remains StanChart’s largest wealth centre, and a gateway to China and the Greater Bay area.

“Hong Kong is not just for global Chinese – we are also quite material in terms of franchise banking,” she said, noting that the bank has both a strong domestic and offshore business in Hong Kong. She added that the bank’s Hong Kong team will continue to collaborate with its teams in mainland China, to make better use of its network.

A large portion of the US$1.5 billion investment will go into increasing the number of relationship managers, Hsu said.

Across StanChart’s wealth continuum, the priority private, private banking and international banking segments will require more resources given their service models.

SEE ALSO

Russian money ‘not our business’, says StanChart CEO Bill Winters, as bank doubles down on wealth management

Standard Chartered targets US$200 billion in new wealth assets over next five years

HSBC pulling back from China credit card business after struggling to expand: sources

This means more investments in Singapore, Hong Kong and India, where it has private banks, and London, where it has an advisory centre.

Investing in growing markets

The lender will also invest in growing big onshore markets, particularly in India and China, as well as in Malaysia and Taiwan.

Hsu identified two main groups of clients that have strong growth potential: the global Indians, and the global Chinese.

“We’ve had fabulous success with the global Chinese, and we are now leveraging some of our capabilities, success and experience (for global Indians),” she said.

To fund the US$1.5 billion investment, Hsu said the lender is looking to cut back on businesses that are not aligned to its affluent strategy, or have very little potential to grow into a scalable business.

This includes its exit from three markets in Africa – Botswana, Uganda and Zambia – which Hsu said have played more in the personal loans and mass retail space.

But she noted bright spots elsewhere in Africa, such as in Kenya, where the bank has seen strong flows between Kenya and the United Arab Emirates, largely due to global Indians.

StanChart is also pivoting its strategy in India away from personal loans, so it can focus its resources on its affluent business.

For the first nine months of 2024, the affluent business represented 68 per cent of StanChart’s wealth and retail banking business. The affluent business accounted for 27 per cent of the overall group income, and 33 per cent of overall group profit.