Standard Chartered

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Standard Chartered PLC
Type Public limited company
Traded as
Industry Banking, Financial services
Predecessor(s)
Founded 1969 (1969) (London)
Headquarters London, United Kingdom
Area served Worldwide
Key people
Services Credit cards
Consumer banking
Corporate banking
Investment banking
Mortgage loans
Private banking
Wealth management
Revenue US$ 17.593 billion (2013)[1]
Operating income US$ 8.584 billion (2013)[1]
Net income US$ 4.200 billion (2013)[1]
Website www.sc.com

Standard Chartered PLC is a British multinational banking and financial services company headquartered in London, United Kingdom. It operates a network of over 1,700 branches and outlets (including subsidiaries, associates and joint ventures) across more than 70 countries and employs around 87,000 people. It is a universal bank with operations in consumer, corporate and institutional banking, and treasury services. Despite its UK base, it does not conduct retail banking in the UK, and around 90% of its profits come from Africa, Asia and the Middle East.

Standard Chartered has a 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, the 13th-largest of any company with a primary listing on the London Stock Exchange.[2] It has secondary listings on the Hong Kong Stock Exchange and the National Stock Exchange of India. Its largest shareholder is the Government of Singapore-owned Temasek Holdings.[3][4][5]

Name[edit]

The name Standard Chartered comes from the names of the two banks from which it was formed by merger in 1969: The Chartered Bank of India, Australia and China, and Standard Bank of British South Africa.[6]

History[edit]

Predecessors[edit]

Chartered Bank[edit]

The Chartered Bank began when Queen Victoria granted a Royal Charter to Scotsman James Wilson in 1853. Chartered opened its first branches in Mumbai, Kolkata and Shanghai in 1858, followed by Hong Kong and Singapore in 1859. The Bank started issuing banknotes of the Hong Kong dollar in 1862.[6]

Standard Bank[edit]

The Standard Bank was a British bank founded in the Cape Province of South Africa in 1862 by Scot, John Paterson. 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. 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.[6]

1969 to 2000[edit]

Standard Chartered Bank Building in Hong Kong

Both banks acquired other smaller banks along the way and spread their networks further.

In 1969, the banks decided to merge,[6] 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 made a hostile takeover bid for the Group.[7] The bid was defeated; however, it spurred Standard Chartered into a period of change, including a series of divestments notably in the US 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, at that time fully a third of its capital.

In 1994, London's Sunday Times reported that an executive in the bank's metals division had bribed officials in Malaysia and the Philippines in order to win business.

The bank, in a statement on 18 July 1994, acknowledged that there were "discrepancies in expense claims [that] ... included gifts to individuals in certain countries to facilitate business, a practice contrary to bank rules".[8]

In 1997, Standard Chartered sold its metals division to Toronto-based Scotiabank for US$26 million.

In 1994, the Hong Kong Securities and Futures Commission found Standard Chartered's Asian investment bank to have 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 offence, 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.[9]

In the late 1986, a business consortium purchased a 35% stake to fend off Lloyds. A member of this consortium was Malaysian-born property tycoon Khoo Teck Puat, who purchased 5% of the bank's shares, which he later increased to 13.4%.

2000 to 2010[edit]

In 2000, Standard Chartered acquired Grindlays Bank from ANZ, increasing its presence in private banking and further expanding its operations in India and Pakistan. Standard Chartered retained Grindlays' private banking operations in London and Luxembourg, as well as the subsidiary in Jersey, all of which were 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, becoming the largest foreign bank in that country. Ethics issues and financial losses triggered turmoil; the bank went through three CEOs in three years: Malcolm Williamson was replaced in 1998 by Rana Talwar, who was 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 has claimed Standard Chartered's troubles over the years is due 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.[9]

Leading to the incorporation of Standard Chartered (Hong Kong) on 1 July 2004, the Legislative Council of Hong Kong amended Legal Tender Notes Issue Ordinance. The amendment replaced Standard Chartered Bank with its newly incorporated subsidiary - Standard Chartered Bank (Hong Kong) Ltd - as one of the note-issuing banks in Hong Kong.[10] The same year, 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.[11]

On 15 April 2005, the bank acquired Korea First Bank, beating HSBC in the bid.[12] The bank has since 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).[13] 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 (Bangladesh) and Bohai Bank (China). The largest shareholder, Khoo Teck Puat, died in 2004; and two years later, on 28 March 2006, the Singapore state-owned private investment firm, Temasek, became the bank's largest shareholder, when it bought the 11.55% stake held by the estate of billionaire Khoo Teck Puat.[3][4][5]

Standard Chartered Bank China in Guangzhou

On 9 August 2006, Standard Chartered announced it had acquired an 81% shareholding in the Union Bank of Pakistan in a deal ultimately worth $511 million. 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% of the issued share capital of Hsinchu International Bank (“Hsinchu”), established in 1948 in Hsinchu, Taiwan.[14]

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 of 30 June 2006, but had suffered extensive losses on defaulted credit card debt. Standard Chartered merged its existing three branches with Hsinchu's 83 branches, and delisted Hsinchu International Bank, changing the bank's name to Standard Chartered Bank (Taiwan) Limited; 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.[15]

On 23 August 2007, Standard Chartered entered into an agreement to buy a 49% 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% in 2008, and, if both partners were in agreement, to 100% by 2010.[16] 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.[17][18][19][20][21]

On 13 November 2008, Standard Chartered Bank (Hong Kong) Limited, entered into an agreement to acquire 100% of Cazenove Asia Limited, a leading Asian equity capital markets, corporate finance and institutional brokerage business, from JPMorgan Cazenove.[22]

On 27 November 2009, Dow Jones Financial News reported that Dubai will restructure its largest corporate entity. Among international banks, Standard Chartered has one of the largest loan portfolios in the Dubai market and the UAE as a whole, estimated to be $7.77 billion in total. This amounts to 4.2% of Standard Chartered's total loans outstanding. Other impacted banks included HSBC, Barclays, and RBS. The bank stated that any impairment arising from this exposure would not be material.[23]

2010 to present[edit]

Standard Chartered Bank Tower in Pudong, Shanghai, People's Republic of China

Standard Chartered announced an agreement on 27 April 2010 to buy the African custody business from Barclays PLC.[24] On 13 May 2010, Standard Chartered PLC launched the first-ever Indian Depository Receipt “IDR” offer[25]

On 17 June 2010, Standard Chartered Bank and the Agricultural Bank of China (ABC) strengthened their strategic partnership. Hong Kong has been identified as a potential pilot region for the two banks' co-operation journey. The two banks' declared 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 was to be co-chaired by Peter Sands, CEO of Standard Chartered, and Zhang Yun, President of ABC.[26] In December 2010, Standard Chartered was recognised as the Global Bank of the Year in The Banker's Bank of the Year 2010 awards.[27]

Iran money laundering settlement[edit]

On 6 August 2012, the New York Department of Financial Services (DFS), led by Benjamin Lawsky, accused Standard Chartered of hiding $250 billion in transactions involving Iran, labelling it a "rogue institution".

The bank was ordered to appear and defend its actions, or risk losing its license to operate in the state of New York.

The DFS said it had documents showing a cover up of transactions allegedly used to fund terrorist groups in the Middle East.[28]

The next day, the share price bounced back almost 7%, after certain British politicians attributed the bulk of the accusations against the bank to an "anti-British bias", saying that US authorities try to undermine London's banking sector and blamed US economic problems partly on the UK.[29]

On 14 August, Lawsky announced that the DFS and Standard Chartered reached a settlement that allows the bank to keep its licence to operate in New York. According to the terms of the settlement, the bank agreed to pay a $ 340 million fine.[30]

The bank agreed to install a monitor to oversee the bank's money laundering controls for at least two years, and appoint "permanent officials who will audit the bank's internal procedures to prevent offshore money laundering".[30] The monitor will report directly to the DFS.[31] Lawsky's statement said "the parties have agreed that the conduct at issue involved transactions of at least $250bn."[32] The bank issued a statement confirming that a settlement with the DFS had been reached and that "a formal agreement containing the detailed terms of the settlement is expected to be concluded shortly".[32]

Other US agencies—including the Federal Reserve, the Federal Bureau of Investigation, the Treasury Department, and the Justice Department—had also begun investigations into the laundering allegations and were reportedly taken off guard by the speed of the settlement.[30]

The Treasury stated that its own investigation of Standard Chartered will continue.[33] Several financial analysts predicted that, due to its strong financial position, the bank would be able to easily cover the $340 million fine without having to raise extra capital.[33]

Standard Chartered Breeze[edit]

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 focusing on social media.

Standard Chartered Breeze organised a blogger's meet for bloggers to preview Breeze, and its Twitter campaign to give away a free iPad was extremely successful.[34]

Senior management[edit]

Peter Sands is the current chief executive of Standard Chartered.

His total annual reward package is $4,142,000, consisting of $1,516,000 salary and a bonus of up to $2,626,000.[35]

Sponsorship[edit]

In September 2009 it was announced that Standard Chartered had agreed to become the main sponsor of Liverpool Football Club for the period between July 2010 and the end of the 2013–14 football season.[36][37]

The deal was reported to have a total value of £80 million.[36][37]

Due to the success of the partnership, an extension to the end of the 2015-16 season was agreed in 2013. [38]

Notable employees[edit]

John Major, who served as prime minister of the United Kingdom from 1990 to 1997, was employed by Standard Chartered from May 1965, when he joined them as an executive.[39]

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 MP for Huntingdon.

See also[edit]

References[edit]

  1. ^ a b c Chartered PLC - Full Year 2013 Press release.pdf "Preliminary Results 2013" (PDF). Retrieved 15 March 2014. 
  2. ^ "FTSE All-Share Index Ranking". stockchallenge.co.uk. Retrieved 26 December 2011. 
  3. ^ a b Lin, Liza (25 November 2008). "Temasek Raises Bet on Financial Stocks With StanChart". Bloomberg. Retrieved 19 April 2011. 
  4. ^ a b "The Tan Sri Khoo Teck Puat Estate Agrees to Sell Shares in Standard Chartered to Temasek". prnewswire. 27 March 2006. Retrieved 8 January 2012. 
  5. ^ a b "Standard Chartered stake sold". BBC. 28 March 2006. Retrieved 8 January 2012. 
  6. ^ a b c d "Standard Chartered Bank History". Standardchartered.com. Retrieved 19 April 2011. 
  7. ^ "Offer sweetened by Lloyds Bank". The New York Times. 28 June 1986. Retrieved 2 May 2010. 
  8. ^ Sucheta Dalal
  9. ^ a b Lee, Yoolim (3 November 2009). "Standard Chartered 79% Return Overtakes HSBC With Asian Rebound". Bloomberg. Retrieved 19 April 2011. 
  10. ^ "Cap 65 - Legal tender notes issue Ordinance". Retrieved 7 September 2012. 
  11. ^ "PermataBank in Brief". Permatabank.com. 14 April 2011. Retrieved 19 April 2011. 
  12. ^ "Standard Chartered buys Korea First Bank". Standardchartered.com. Retrieved 16 August 2012. 
  13. ^ "Standard Chartered to Merge Its Branch with Local Subsidiary in Thailand". Highbeam.com. 29 April 2004. Retrieved 19 April 2011. 
  14. ^ "Standard Chartered to buy Hsinchu". Ibtimes.com. 29 September 2006. Retrieved 19 April 2011. 
  15. ^ "Standard Chartered sets up private banking HQ in Singapore". Newsgd.com. Retrieved 19 April 2011. 
  16. ^ "Standard Chartered to buy 49% of UTI Securities". Thehindubusinessline.com. 24 August 2007. Retrieved 19 April 2011. 
  17. ^ Clark, Andrew (18 September 2007). "Standard Chartered buys American Express Bank". The Guardian (London). Retrieved 2 May 2010. 
  18. ^ "Frequently Asked Questions on the Standard Chartered Bank acquisition of American Express Bank". AmericanExpress.com. Retrieved 11 January 2012. 
  19. ^ "Auditors' Report on the financial statements of Standard Chartered Bank – India Branches under Section 30 of the Banking Regulation Act, 1949, p. 7, Economic & Political Weekly EPW 28 June 2008". standardchartered.co.in. Retrieved 11 January 2012. 
  20. ^ "Standard Chartered to Buy American Express Bank Unit (Update4)". Bloomberg.com. 18 September 2007. Retrieved 11 January 2012. 
  21. ^ "Standard Chartered completes acquisition of American Express Bank for $823 million". standardchartered.com. Retrieved 11 January 2012. 
  22. ^ "Standard Chartered to acquire Cazenove Asia Limited" (PDF). Retrieved 16 August 2012. 
  23. ^ Poon, Aries (21 December 2010). "Lender says no material impairment from Dubai". The Wall Street Journal. Retrieved 19 April 2011. 
  24. ^ "Press release". Wholesalebanking.standardchartered.com. Retrieved 19 April 2011. 
  25. ^ "Media Centre – 2010 Press Releases". Standardchartered.com. 13 May 2010. Retrieved 19 April 2011. 
  26. ^ "Standard Chartered Bank Press Releases – 2010". Standardchartered.com. 17 June 2010. Retrieved 19 April 2011. 
  27. ^ The Bank of the Year Awards, The Banker
  28. ^ "Standard Chartered may lose NY license over Iran ties". Reuters.com. 16 August 2012. Retrieved 16 August 2012. 
  29. ^ "Standard Chartered Share Price Bounces Back". News.sky.com. 16 August 2012. Retrieved 16 August 2012. 
  30. ^ a b c "British Bank in $340 Million Settlement for Laundering", New York Times, 14 August 2012. Retrieved 14 August 2012.
  31. ^ "Standard Charter to pay $340M fine", New York Post, 14 August 2012. Retrieved 15 August 2012
  32. ^ a b Standard Chartered agrees settlement with New York regulator, 14 August 2012. Retrieved 14 August 2012.
  33. ^ a b "Standard Chartered to Pay $340 Million to Settle New York Case", Wall Street Journal, 14 August 2012. Retrieved 14 August 2012.
  34. ^ Ng, Cameron (26 October 2010). "The Standard Chartered Breeze Twitter Campaign". Penn-olson.com. Retrieved 19 April 2011. 
  35. ^ "Peter Sands: Executive Profile". BusinessWeek. McGraw-Hill. Retrieved 10 August 2009. 
  36. ^ a b "Bank to be new Liverpool sponsor". BBC News. 14 September 2009. Retrieved 29 March 2012. 
  37. ^ a b Medlicott, Phil (14 September 2009). "Sponsorship deal 'boosts' Liverpool stadium plans". The Independent. Retrieved 29 March 2012. 
  38. ^ "Liverpool FC extend Standard Chartered sponsorship deal". Liverpool Echo. Retrieved 15 March 2014. 
  39. ^ Whitney, Craig R. (29 March 1992). "John Major at Bat". The New York Times. Retrieved 22 May 2012. 

External links[edit]