StanChart to invest S$1b in Singapore over 5 years, launch virtual bank in H2

STANDARD Chartered (StanChart) plans to invest S$1 billion over the next 5 years in Singapore, and launch its virtual bank in the city-state in the second-half of 2022, said the bank’s Asia chief executive officer Benjamin Hung.

Hung, 57, is based in Hong Kong and was visiting Singapore for the first time in his new role. StanChart last year combined its Greater China, North Asia as well as Asean and South Asia markets into a single entity, led by Hung.

Last year, StanChart entered a joint venture to launch a digital-only bank in Singapore with National Trades Union Congress (NTUC). To be named Trust Bank, this will be its second digital-only bank after Mox Bank in Hong Kong. Mox is part of StanChart’s joint venture with PCCW, HKT, and Trip.com.

StanChart holds a 60 per cent stake in Trust Bank, worth S$144 million, while NTUC’s enterprise arm holds the remaining 40 per cent stake, worth S$96 million.

Hung is also optimistic that StanChart will be able to achieve its target of improving its return on tangible equity to 10 per cent by 2024, as China opens up.

While China is experiencing some short-term transformation bumps, Hung said the world’s second-largest economy remains “very exciting”.

“It is less about whether its gross domestic product is 4 per cent or 5. It is more about the opening up and how we can facilitate that,” he added.

Asia generates over two-thirds of the London-headquartered lender’s income from its network of 21 markets. Of these markets, Hong Kong and Singapore contributed the highest income in 2021 — driven by wealth management.

The ratification of Regional Comprehensive Economic Partnership (RCEP) free trade agreement among a group of Asia-Pacific nations has also helped attract more Chinese investments into Asean.

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Hung said StanChart has “hundreds” of Chinese corporates banking with it in Asean and is serving close to 40 per cent more Chinese client entities compared to 2020.

In Q1 2022, the bank’s China trade income increased 28 per cent on-year. It is now more than twice the pre-pandemic level in Q1 2019. 

Singapore is an important hub for StanChart’s clients to access Asean opportunities. Last year, the top 3 outbound corridors from Singapore to Asean markets were Indonesia, Malaysia and Vietnam.

For FY2021, StanChart’s net profit rebounded to US$1.9 billion after falling sharply during the initial phase of the pandemic. Its revenues, however, shrunk slightly to US$14.7 billion.

Its London-listed shares closed May 27 at 626.56 pence, up 35.4 per cent year to date.