StanChart buoyant on Bangladesh

Standard Chartered is optimistic about Bangladesh despite the recent militant attacks unnerving foreign investors, thanks to its long presence in the country and its board's wholehearted support, said the bank's chief executive for Bangladesh.

“We believe there are strengths in the country and in the country's growth outlook, people and clients,” said Abrar A Anwar.

The board has picked Bangladesh as an investment destination, he added.

“It will give us the ability to serve customers across all segments. We believe in the growth prospect of this market – be it in retail banking, corporate banking or broader banking activities,” he said.

“If you get that much commitment from the decision makers, the board of the bank in this case, then you have reason to be optimistic because you will be given the resources to serve clients.”

Those resources include investment in technology, premises, product capability, human resources along with expanding the workforce base and accelerating the investment in new opportunities that are emerging.

Anwar, who took the reins in January last year to become the second Bangladeshi to lead Standard Chartered Bangladesh, said the bank gets opportunities to invest not only in short term projects but also in the long term ones.

Standard Chartered continues to invest in Bangladesh; it has raised more than $3.5 billion in the last four years for the power, energy, aviation and telecom sectors, he said.

Being one of the largest foreign investors in Bangladesh, the bank's investment in the country stands at about $6 billion. “And it is growing.”

The bank is expanding its product capability in the retail and corporate banking space and also in both physical and digital distribution networks.

He said the bank is well-positioned to cater to retail segments, trade facilitation to corporate clients with financing ranging from small amounts to billion dollars.

“We are in a good position and so, we will continue to invest in Bangladesh to maintain our lead position in all these sectors.”

Standard Chartered has been operating in Bangladesh for more than 110 years.

“We believe that whatever is happening or happens in emerging markets is a part of life,” he said, when asked for comments on the recent militant attacks.

“It is the resilience of enterprise.”

Anwar said the recent spate of militant attacks is a global concern, not only a local problem. “It is a new reality facing Bangladesh, leading the government to take stern actions. The total action plan has changed.”

Some entities have enforced travel restrictions, which will impact their visits. But people will find a mechanism to work around it, he said.

“We are going ahead with all our plans because we are probably seasoned in operating emerging markets, especially Bangladesh. Our experience and legacy give us strength to navigate in any situation.”

The capacity that Bangladesh has in exporting apparel cannot be replicated quickly by somebody else, he added.

Other than some transactions in restaurants and shopping malls, all other things are progressing, he said. “There may be delays in some projects funded by foreign partners, but we have learnt that they would continue the project. They are just trying to fathom the situation.”

Over the decades, Standard Chartered has also become a banker to the banks in Bangladesh; 31 banks are its customers and it handles 40 percent foreign currency clearing of Bangladesh. 

Bangladesh's private sector banking has come a long way but the private banks have to keep their focus all the time on areas such as governance, cyber security, anti-money laundering and terrorist financing, he said.

“Otherwise, sustainability of the sector will be challenged.”

Standard Chartered has its own high priority issue called information security strategy as per the bank's global standards.

This is an issue the bank is always monitoring and investing in hugely to stay protected because every day hackers are getting smarter, he said.

“The bank is not just a nice looking building – it is much, much beyond that. What is behind is the total infrastructure to keep clients' data, money and information secured.”

The 47-year-old banker said the low lending rate boosted by declining interest rates is good for the economy as it would boost investment growth.

Overall it is an interesting time for Bangladesh as the country has never seen many mega projects being executed concurrently, he said. “They will have a positive impact on the economy as we go forward.”

The bank can play a key role in helping to execute the infrastructure projects by raising money, bonds and project financing, he said.

Anwar also discussed a sovereign bond the government has been talking about for a while. “We are always a proponent for the bond: it is not for the money but for the benchmark. That should happen.”

He said a quasi-sovereign bond may be floated. For example, the power and energy ministry might launch power bonds and energy bonds as there are many projects under the ministry.

Anwar said his bank is focusing more on home buyers from the emerging middle class who do not have their 'first home' in Dhaka.

He said the low interest rate is important for the mortgage market.

“If you look at the developed world, you will realise that without mortgage, no economy can move forward. So, it is important to ensure that people can afford to buy property and pay mortgage payment.”

Standard Chartered has continued to reduce its interest rate in the housing sector. “At 8.5 percent, probably our rate is the lowest.”

The bank recently signed a memorandum of understanding with Rajuk, the city development authority, for its apartment products and will offer a special rate and easy processing. Rajuk is churning out 16,000 apartments shortly and another 60,000 will come up in the Purbachal and Jhilmil areas in the near future.

“We are probably the only bank that can provide financing at that level.”

For the Uttara-18 project, Standard Chartered targets to lend up to Tk 500 crore in a year and half. The prospective borrowers will be able to take up to 70 percent of each instalment owed to Rajuk as a loan for up to 25 years.

“This will increase the buying capacity of the people who would like to own an apartment,” he said, adding that the bank would replicate the model for other upcoming projects.

Anwar said the bank is working with the central bank and other stakeholders so there are low-cost long-term projects for home finance. If there is such a fund, the housing sector will grow automatically, he added.

Discussing the impact of Britain leaving the European Union, he said it would take until 2019 for the UK to leave the bloc.

“It gives a bit of a breathing space for Bangladesh, and I think the government will move in the right direction to negotiate trade deals separately with the UK.”

“The UK is an old friend of Bangladesh, a big development partner and the largest investor in the country. So, I think something positive will come out of the negotiation.”

“I don't see any major immediate impact. But we need to position ourselves properly because the buying capacity of the UK people post-Brexit will determine our trade with the country.”

fazlur.rahman@thedailystar.net