--By Nubiz Team
More than just Banking
Recently, Vice Chairman Asia for Standard Chartered met Dr. Sanduk Ruit and handed him a letter of intent for USD 1 million to Tilganga Institute of Ophthalmology for construction of permanent eye centres in Bhaktapur and Nuwakot districts. Nothing unusual for the bank, since it had committed a similar amount five years back to Biratnagar Eye Hospital, which now is a major hub for ophthalmic care in the eastern region treating around 1,000 patients a day; conducting around 150 eye surgeries per day. The Bank does this under its ‘Seeing is Believing’ (SIB) programme which has, from 2003 to 2012, impacted 31 million people globally.
Standard Chartered takes its partnership with the communities very seriously, as serious as it is with its core business of banking. Last month they opened the first ever banking lounge created in an art gallery, ‘DRISHTI’, at their Lazimpat Branch. Drishti will provide market access to young and budding Nepali artists and part of the sale proceeds will go towards funding the SIB programme, with the Bank adding a similar amount.
We had to dig deeper into this and remind ourselves that this is indeed a commercial bank; so our first interview was with their charismatic CEO, Joseph Silvanus. “The Bank is deeply connected and committed to South Asia, where we are the largest foreign banking partner in India, Bangladesh, Sri Lanka and Nepal. Our Chairman Sunil Kaushal has recently approved a forward looking strategy for Nepal which envisages doubling of the balance sheet over the next 4 years.” He explains that this requires additional investment and growth along prudential lines. “The Bank has grown at a CAGR (compounded annual growth rate) of 9% over the last decade and there is ample rationale for improving this trajectory as the enabling environment has progressively improved. The Group is committed to the development of Nepal and this intent alone will drive our future strategies.”
Consistent performance is the enabler
The Bank has been consistently delivering record income and profits for the past 10 years. This is an area which receives plenty of support from shareholders. The Bank commands over 5% share of the total market capitalization and its scrip is considered a `Bell-Weather’ stock on the Nepal Stock Exchange (NEPSE).
How does the Bank manage to deliver such consistent returns? “Sustainability of operations is at the heart of our strategy”, CFO Suraj Lamichhane responds. “Brand SCB carries an image of a strong, secure and world class bank in Nepal. Our low cost of fund is a clear reflection of the brand’s image and efficiency. This provides a distinct competitive advantage to the Bank in driving pricing, profitability and performance, while balancing growth priorities. This distinction is hard earned, which is the manifestation of high standards of corporate governance, robust risk culture and steady disciplined growth”.
A Different Approach
Prima facie, StanChart Nepal may look like any other commercial bank in the country in terms of its range of products and services. However, a further dissection of its overall operation reveals that it is different from other banks in Nepal in several ways.
The differentiation starts with the Bank’s Brand Promise of ‘Here for good’. Diwakar Poudel Head Brand & Marketing and Corporate Affairs says, “It (Here for good) stands for a much deeper significance in terms of how we operate as a bank and conduct business. It tries to explain that the Bank – wherever it is present - is there for the long run; it means that the Bank remains by the side of its clients through good and bad times; it means the Bank stands for the progress and prosperity of the community and society where it has a foothold; and it means that the Bank is always striving to do the right things in the right manner.” Be it from the perspective of funding large infrastructural and industrial projects or for being an international window for traders to deal with the outside world, StanChart has been a valuable partner for many in banking business.
We did a deep dive into their Here for good theory; and stories just got bigger and bolder. Frankie Au, Global Head of RMB Products from StanChart Hong Kong was here in June, leading a series of awareness programmes on the usage of RMB (Chinese currency). Frankie trained Nepal Rastra Bank (NRB) staff first and later seniors in the local banking industry.
In March, a senior consultant from the Group conducted knowledge sharing workshop for the Nepal Police on Anti Money Laundering techniques and subsequently staff from the Department of Money Laundering in the Ministry of Finance - solid evidence that StanChart is truly committed to Nepal’s wellbeing and development.
Nepal’s window to the world
A key differentiating factor for the Bank has been its impeccable reputation of being the most trusted financial institution in the country. This explains why StanChart Nepal has become the bank of choice for many individuals, big corporate houses, diplomatic missions, Multilateral agencies and INGOs present in the country. The bank has been able to garner a deep rooted trust from many individuals, corporate & institutions and Development Organisations.
Anil Shrestha, Head of Financial Institutions suggests “We are a true Bankers bank and enjoy ~70% share of the correspondent banking business of domestic banks. The Bank provides window for local banks in accessing international markets for global products and services. Being a subsidiary of an international chain, that commands presence in over 100 geographies globally, StanChart Nepal has also been assisting other local banks in helping them underwrite their international trade and other related transactions”.
An often heard rebuttal on StanChart’s business is their lack of commitment to the Infra space, especially hydro projects. We confronted their Head of Corporate & Institutional Clients - Gorakh Rana with this question. He commented “The Bank was the first to facilitate the on-shore transfer of ownership to the local promoters in the case of an IPP (Independent Power Producer). We have facilitated the escrowing of cash waterfall in major projects. Moreover, we have a significant exposure by way of contingents on the hydro projects in Nepal, without which the projects would have most likely not commenced. These are key sector building initiatives which cannot be ignored.” Gorakh spearheads the Bank’s most profitable engine of growth, ably assisted by a cohort of senior bankers and specialists such as Michael Siddhi, Head of Transaction Banking. Mike (as he is known) is a new genre of specialists who looks after cash & trade efficiencies for clients. For this, Mike uses a very powerful enabler - Straight2 Bank, which is a fully integrated, state of the art electronic platform that provides paperless trade and transaction banking services, which can be accessed by the Bank’s clients from their own locations.
Retail Focus
StanChart was recently declared the winner of the Global Finance - World's Best Consumer Internet Bank Awards 2014 for Nepal. Earlier in March this year, the Bank had also been awarded “‘The Global Finance World’s Best Banks 2014 Awards’ for Nepal" in emerging markets category by The Global Finance magazine. How is the bank reacting to these global recognitions? “With humility and gratitude” suggests Joseph. “We don’t rest on laurels, since they capture past behaviours; our whole focus is on what our conduct in future is going to be. The whole culture is one of self-belief, self-assessment of gaps - may it be service or risk, and a deep understanding of customer expectations. We conduct Voice of Customer meetings regularly to capture their mood.” Independent assessment of Net promoter scores suggest that the loyalty factor for the Bank is increasing steadily.
One major criticism often offered against StanChart is that it is concentrated on serving only the rich and that it is not a bank for the common people. Ammar Husain, Head of Retail Clients, entirely disagrees, “That is only a perception. The Bank’s service charges are comparable with any similar institution, while providing a superior service experience. We have pioneered the first 24x7 customer contact centre that can handle every service request. The bank offers the cheapest interest rates across Mortgage, Auto and Personal Loans.” He further points out their residential Mortgage portfolio is one of the largest in the industry. As the pioneer in personal loans, which requires no guarantor, they again are industry leaders. So what do StanChart regulars have to say? “The Bank is always the first to offer the lowest rate in the market, which is good for me. With regards to its services, it provides fair and equal treatment to all its customers, regardless of their income level,” Says Rabindra Malla, ED, SCT Nepal
Another interesting fact Ammar pointed out was that over 35% of overall retail loans were made to women.
Of late, the bank has introduced a unique offer which enables retail clients possessing PAN Cards to enjoy a discount of 0.25% on new retail loans. This is a market first initiative that helps government in widening the tax net – this indeed is a welcome step from private sector to support the government agenda. Recognizing this initiative, Director of Inland Revenue Department Gopal Ghimire says “It is a commendable initiative. It helps the government and it promotes ethical business which enables clients to access cheaper retail credits.”
The Bank is proactively working with Nepal-specific private equity players and multi-nationals in driving capital formation at the bottom-of-the-pyramid and generating employment opportunities by funding small and medium scale businesses. Sanjeev Mishra, Head SME Business suggests, “When compared to our vision in this space our current achievements are akin to baby steps; we are planning quantum growth through significant product innovation and holistic solutions”.
DRISTHI, the art gallery with exclusive lounge, provides much needed privacy and personalised service for their High Networth clients. Art is the new emerging source for wealth creation and now clients can order works from their favourite artists. We have to agree that StanChart is certainly making the right moves to secure loyalty of their customers and yet conduct their business with fairness, equity and transparency.
Leadership through innovation
One normally hears that StanChart is known for its service etiquette and innovative products. We discovered the truth behind this lay more in their longer term aspiration of delivering to a “Customer Centric” strategy, which relied on their ability to deliver products and services in a seamless and efficient manner.
In line with the Bank’s “Digital Main Bank” agenda, driving investment in digitization and automation has been the key focus area for the Bank for the last couple of years, which is helping the Bank achieve the required capability to support volume growth efficiently by reducing turnaround time. The Bank believes that this has allowed for reduction in the need for brick and mortar investments. Sujit Shrestha, Chief Information Officer suggests, “Our focus is on the seamless delivery of simplified solutions through rapid implementation of technology innovations and reengineered operations. We are actively investing on digital channels and automation for creating more scalable transaction processing environment to support our aspirations for business growth.”
“The only constant is change and this drives innovation within the bank,” Sujit mentions. “Being a part of the global bank certainly helps in faster transfer of ideas and technology, but we are now addicted to change. After collapsing our structures into a One-Bank regime, we have drawn out several synergies resulting in cost saves.”
Regulatory compliance in a fast changing world
The regulatory landscape of international banking is rapidly changing and Nepal is keeping its pace. StanChart, as the only true international bank in Nepal, has the unique opportunity of not just being a compliant bank but also shares best practices with domestic banks, herein raising the bar on regulatory compliance. StanChart Nepal follows SCB Group guidelines and complies with its parent company regulators – Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) of United Kingdom; besides complying with all the locally applicable laws and central bank regulations. The Bank has already started making necessary preparations for BASEL III; some of the parameters are already being met.
Shobha B Rana explained : “Staff awareness is the key cornerstone on which rests the entire super-structure of compliance.” The bank leaves no stone unturned in its learning agenda – from computer based training programmes, a common SharePoint, MasterClass, training programmes, short-term assignment in the Group; all used to up-skill staff. We were amused to learn that even staff appointed as floor fire wardens and first aider’s had to undergo half yearly refresher programmes.
StanChart Nepal was the first bank in Nepal to implement the Anti-Money Laundering (AML) policy, way back in 2003, and to apply the ‘Know Your Customer (KYC)’ procedure on customer accounts. The Bank also complies with the guidelines issued by the Financial Action Task Force (FATF) on AML and Counter Terrorist Financing (CTF). Wanting to drive home the seriousness they attach to AML issues, Shobha Rana said, “We have invested in an automated system for Customer Due Diligence (CDD) and Transaction Monitoring in order to mitigate risks arising out of weak and/or inadequate CDD and transaction surveillance.”
A benign risk environment delivers high corporate governance
One of the core values of the Bank has been to demonstrate its commitment of maintaining the highest standards of corporate governance. Gopi Bhandari, Chief Operating Officer and Senior Credit Officer adds, “The focus is on having the right culture, structures and processes in place to ensure all actions of the bank reflect high degree of governance and ethical values. We place conduct far above any other staff behaviour.” StanChart insiders often banter there is a policy for just about everything in the bank; nothing is left to chance and dereliction.
As Nepal gets increasingly coupled with the world; volatility, cross-border, currency, market and credit risks are bound to increase. The bank is credited to have managed these and other horizon risks very maturely. As Gopi suggests, “The independence of risk function from business and other stakeholders is the key critical success factor. For example, no one can influence a credit decision which is made solely on the merits of the case”. No wonder the Bank has the cleanest assets book with Non-Performing Assets (NPA) at a rock bottom of 0.52%. These guys are making banking look easy.
Identifying & Grooming Talent
StanChart Nepal focuses on its employees, offering them a career, rather than just a job. For this, the bank gives special emphasis to the capacity development of its employees. The main focus of this emphasis is to develop tomorrow’s leaders today. The Bank does this through a systematic process of identifying, developing and grooming employees considered as having ‘high potential’.
Employees with high potential, HIPOs, as they are called, are identified early and are then mentored by senior managers of the Bank so that they can become future leaders of the Bank and society at large. Today several of the CEOs and seniors in the Nepali banking industry have had their formative years with ANZ Grindlays/StanChart.
Culture is the unique ingredient
As prized as StanChart staff are, we believe they are also happy with the bank. Long term staff attrition is at low single digit. In our interviews we were able to pick a single unifying factor – culture. Staff, both past and present, become passionate while discussing the work ethic, culture and relationships. “I miss it the most”, “most valuable part of my life”, “it has remained with me”’, “I will always cherish those moments” are phrases replete with emotion. It was something so intangible and yet so strong that the bond was almost physical. This culture of transparency and openness within the bank encourages healthy discussion between staff, regardless of their hierarchy. We had to agree with this finding wholeheartedly since everyone addressed each other by first name instead of surnames or prefixes or titles. Talk about simplification!
Staff Wellbeing
Bina Rana, Head, Human Resources, has a different take on the Here for good principle. She mentions, “We are here for people – committed to our aspiration of making the Bank a great place to work, focused on the development, growth and overall wellbeing of our people”. As proof, she offers StanChart as the only bank and perhaps the only private sector institution to have a Day Care Centre (Crèche) and Mother’s room for expecting & nursing mothers on its Head Office premises. Much deserved relief to young working parents.
The Bank operates on a 5 day week basis helping staff to maintain a healthy work/life balance. 90 days of maternity leave & paternity leave are other industry firsts. Similarly, with a focus on workplace and people’s health and safety, it is the only bank in the industry having a Health, Safety and Environment programme and policy. Similarly, the Bank has a policy to encourage staff to work closely with the community; for this purpose, on top of annual leave of 25 days in a year, the Bank provides 3 additional days of Employee Volunteering Leave to its employees. This is yet another unique feature that differentiates the bank from the rest and allows people to enhance ties with the local community.
Our interviews done, we exited their Head Office building in search for our vehicle. Sure enough it was parked there but the driver was absent. The guard quickly realizing this, hailed him from the driver room where he had been relaxing surfing television channels. It was true, we had just visited an organization with a difference. Here for good…
