a project of standrad chartered “commercial bank management”

8/8/2019 A project of Standrad chartered Commercial Bank Management

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A project ofCommercial Bank Management

A project ofA project of

Commercial BankCommercial Bank

ManagementManagement

ByBySyedSyed Muhammad AbdulMuhammad Abdul RehmanRehman

ShahShah

2525--SE/MSSE/MS--IBF2/FO9IBF2/FO9


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Historical

Review

An International Bank

Head Quarter : London

Standred Ch =Bank of

British South Africa + theChartered Bank of India,

Australia and China. Of the

two banks,(1969)


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Achievement


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In 1999, Standard Chartered acquired the

global trade finance business of Union Bank

of Switzerland. This acquisition makes

Standard Chartered one of the leading

clearers of dollar payments in the USA.

Standard Chartered also opened a newsubsidiary, Standard Chartered Nigeria

Limited in Lagos, acquired 75 per cent of

the equity of Nakornthon Bank, Thailand;

and agreed terms to acquire 89 per cent of

the share capital of Metropolitan Bank of

the Lebanon.


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Standard Chartered expanded its network, reStandard Chartered expanded its network, re--

opening inopening inVietnam in 1990,Vietnam in 1990,

Cambodia and Iran in 1992,Cambodia and Iran in 1992,

Tanzania in 1993 andTanzania in 1993 and

Myanmar in 1995.Myanmar in 1995.With the opening of branches in Macau andWith the opening of branches in Macau and

Taiwan in 1983 andTaiwan in 1983 and

1985 plus a representative office in Laos (1996),1985 plus a representative office in Laos (1996),

>Standard Chartered now has an office in>Standard Chartered now has an office inevery country in the Asia Pacific Regionevery country in the Asia Pacific Region

with the exception of North Korea.with the exception of North Korea.


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Standard Bank opened forStandard Bank opened for

businessbusinessIn 1892 the in Zimbabwe,In 1892 the in Zimbabwe,

Mozambique in 1894,Mozambique in 1894,

Botswana in 1897,Botswana in 1897,

Malawi in 1901Malawi in 1901

Zambia in 1906Zambia in 1906Kenya, Zanzibar and the Democratic Republic of Congo (D.R.C.), inKenya, Zanzibar and the Democratic Republic of Congo (D.R.C.), in

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In Asia the Chartered Bank expanded opening officesIn Asia the Chartered Bank expanded opening offices

Myanmar in 1862Myanmar in 1862

Pakistan and Indonesia in 1863,Pakistan and Indonesia in 1863,the Philippines in 1872,the Philippines in 1872,

Malaysia in 1875,Malaysia in 1875,

Japan in 1880Japan in 1880

Thailand in 1894.Thailand in 1894.


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Standard Chartered completed theStandard Chartered completed the

integration of itsintegration of its BangkokBangkokbranchbranch

and Standard Charteredand Standard CharteredNakornthonNakornthon Bank in October,Bank in October,

renaming the new entityrenaming the new entity StandardStandard

Chartered Bank (Thailand)Chartered Bank (Thailand). Standard. Standard

Chartered also formed strategicChartered also formed strategic

alliances with Fleming Family &alliances with Fleming Family &Partners to expand private wealthPartners to expand private wealth

management in Asia and the Middlemanagement in Asia and the Middle

East,East,


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Mission Statement & BrandMission Statement & Brand

ValuesValuesMission Statement:Mission Statement:To offer outstanding value to ourTo offer outstanding value to our

customers by providingcustomers by providing

knowledgeable, efficient andknowledgeable, efficient and

reliable services in a personal,reliable services in a personal,

helpful and responsive manner.helpful and responsive manner.


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Brand Values:Brand Values:From the above mentioned missionFrom the above mentioned mission

statement the bank has developed somestatement the bank has developed some

very deepvery deep--rooted brand values.rooted brand values.

Employees are Well Known aboutEmployees are Well Known about

CustomerCustomer BehaviourBehaviour.Major value.Major value

spreadedspreaded over 150 years.over 150 years.

CourageousCourageous

InternationalInternationalCreativeCreative

TrustworthyTrustworthy


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Departments of StandardDepartments of Standard

Chartered BankChartered Bank

There are various departments inThere are various departments in

this bank due to the wide range ofthis bank due to the wide range ofservices that it offers to itsservices that it offers to its

customers. The major departmentscustomers. The major departments

that I was able to learn about are:that I was able to learn about are:


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IT DepartmentIT Department

This department works at the back end andcustomers are never aware of whether IT people

exist in SCB or not.

It has a very important role to play.

It comes up with all the latest upgrades to the

system to make it more efficient .

IT also ensures that the inter branch connection

of this bank.


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Personal Financial ServicesPersonal Financial Services

Department:Department:This department basically consists of 4

Personal Financial Consultants (PFCs). They have the task giving all sorts of

financial services to the client.Customer can be asked for information

about any product. It is basically there job to assist the

customer in any way possible.

Their task also includes opening all types ofaccounts and letting customers know of thebest-suited option for them.


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Corporate DepartmentCorporate Department

Dealt with all matters related to corporateaccounts.

By corporate accounts refer to all the

companies that have opened accounts oftheir entire staff.

This department also has to achieve acertain target of getting a certain number of

corporate customer.SCB has corporate accounts of US Embassy,

Australian High Commission etc.


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Cash Management andCash Management and

RemittancesRemittancesThis department is mainly concerned with

the most critical and nerve wracking work inthe entire bank.

This department includes the management

of all cash related activities. The management of funds and the transfer

of money within the bank is also managed bythis dept.

The additional services that this deptperforms are money transfers, issuing newcheck books, making drafts etc.


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Credit Card DepartmentCredit Card Department

This dept is basically related to the credit

cards.

There is a Visa card and a Gold card that

is being offered.

This dept also manages its own

collections of bad debts or people who

pay late.So it is a relatively self-sufficient dept.


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Priority Banking:Priority Banking:

Customers who can open a minimumcurrent account for RS. 1 million or whoopen accounts of at least 2 million rupees incase of savings account.

Priority banking solely deals with customerswho fit the above-mentioned criteria.

Separate teller that is only for PriorityCustomers.

Finding such clients and making them openaccounts with SCB is also the task of thisdepartments staff


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TelemarketingTelemarketing

Deals mainly with all telemarketing activities.

They provide information regarding the

banks products ,account balances , credit

card limits etc.This department provides further facilitation

by helping get clients for Credit cards,

Personal loans and Auto Loans.Customer complaints are also made to this

department if they are via telephone.


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Auto LoansAuto Loans

This dept basically deals with all Car

financing loans.

This dept. also has a fully equipped sales

team like the Personal loan dept.

It is their job to get customers to finance

their cars.


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Standard Chartered OfferingStandard Chartered Offering

D

ifferent ProductsD

ifferent Products

Finance Lease

Operating Lease

Auto Leasing

Bemisaal Investment Certificates


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Finance LeaseFinance Lease

They tailor lease financing facilitiesThey tailor lease financing facilitiesto suit customer's individual needs.to suit customer's individual needs.

Lease periods vary from 3 years toLease periods vary from 3 years to

5 years.5 years.


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Operating LeaseOperating Lease

Standard Chartered Leasing providesStandard Chartered Leasing provides

operating leases for generators and vehiclesoperating leases for generators and vehicles

especially for their customers.especially for their customers.

Under an operating lease, StandardUnder an operating lease, Standard

Chartered Leasing insures and maintainsChartered Leasing insures and maintains

the leased assets, while the customer uses itthe leased assets, while the customer uses iton a rental basis.on a rental basis.


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Auto leaseAuto lease

Standard Chartered Leasing AutoStandard Chartered Leasing Auto

Lease offers flexible product rangeLease offers flexible product range

personalized to suit the specificpersonalized to suit the specificrequirements and financial needs ofrequirements and financial needs of

individual customers..individual customers..


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Bemisaal InvestmentBemisaal Investment

CertificatesCertificates

Standard Chartered Leasing offers aStandard Chartered Leasing offers a

perfect investment opportunity ofperfect investment opportunity of

Bemisaal Investment Certificates.Bemisaal Investment Certificates.

These certificates offers security,These certificates offers security,

amazing returns as well as liquidityamazing returns as well as liquidity

to both individual and corporateto both individual and corporate

customers.customers.


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MAIN SERVICESMAIN SERVICES

Consumer Banking:Consumer Banking:

Standard Chartered provide Mortgages, Credit Cards,Standard Chartered provide Mortgages, Credit Cards,

Personal Loans, Auto Loans.Personal Loans, Auto Loans.

They offer 24They offer 24--hour Phone Banking,hour Phone Banking, eStatementseStatements, SMS, SMSBanking, ATM Cards and VISA Debit Cards, as well asBanking, ATM Cards and VISA Debit Cards, as well as

Online BankingOnline Banking ..

Wholesale Banking:Wholesale Banking:

ThisThis banks also provide services to large corporatebanks also provide services to large corporateclients, midclients, mid--sized companies, real estate developers andsized companies, real estate developers and

investors, international trade finance businessesinvestors, international trade finance businesses


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Islamic BankingIslamic Banking

Standard Chartered dedicatedStandard Chartered dedicated

Islamic Banking team providesIslamic Banking team provides

comprehensive Islamic bankingcomprehensive Islamic banking

services and a wide range ofservices and a wide range of ShariahShariah

compliant financial products that arecompliant financial products that are

based on Islamic values.based on Islamic values.


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Global FinanceGlobal Finance

y Global Finance

Stars of China

Awards 2008

y

Best SME Lending,

Foreign Bank in

China


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Financial Advisor AwardFinancial Advisor Award

y CNBC Financial

Advisors Award

2008.

y Best FinancialAdvisors Award

amongst Banks in

India


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Wholesale Banking awardsWholesale Banking awards

y The Asset Triple AAsian Awards 2008

y Best TransactionBank in Korea - SCFirst Bank

y Best CashManagement Bank inSouth Asia

y Best Trade FinanceBank in Korea

y Best Sub-Custodianin Korea

y Best DomesticCustodian in Korea


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Trade Finance Awards forTrade Finance Awards for

ExcellenceExcellencey Best Trade Finance

Bank in Sub-SaharanAfrica - Global

y Best Trade FinanceBank in Middle East

and North Africa -Global (with HSBC)

y Best Soft CommodityFinance Bank - Global

y Best Trade FinanceBank in Singapore

y Best InternationalTrade Finance Bank inIndia


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ASSET ASIAN AWARDASSET ASIAN AWARD


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Financial resultsFinancial results

(Five years)(Five years)

Amounts are in Millions

2005 2006 2007 2008 2009

Profit after Tax 4,507 5,709 2,767 630 669

Net Interest income 5,276 10,336 16,192 1,419 16,284

Non Interest Income 2,450 3,687 6,147 6,566 6,883

Total Assets 111,668 246,318 255,545 264,617 312,874

Total Equity 8,406 40,230 43,066 42,757 47,74

Total Debt 103,262 206,088 212,479 221,860 265,128

Years


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0

50000

100000

150000

200000

250000

300000

350000

2005 2006 2007 2008 2009

Total Assets

Total Assets


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0

10000

20000

30000

40000

50000

60000

Total Equity

Total Equity

0

50000

100000

150000

200000

250000

300000

20052006200720082009

Total debt

Total debt


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Non-mark-up income of

the bank has shown a

growth over the last 5

years.

Growth of 4.8%----in----

FY09.

0

1000

2000

3000

4000

5000

6000

7000

8000

2005 2006 2007 2008 2009

Non Interest Income

Non InterestIncome


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Net Interest income

2005 5,276

2006 10,336

2007 16,192

2008 1,419

2009 16,284

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2005 2006 2007 2008 2009

Net Interest income

Net Interest

income


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The overall profitability of the

bank has shown a declining

trend over the last 4 year.There

was a major decline in the

profits of the bank in FY07.

They declined from Rs 5,709

million in FY06 to Rs 2,767

million in FY07. They further

declined in FY08 to Rs 630

million, and have shown a slight

improvement in FY09 to Rs 669

million. All this has contributed

to declining EPS of the

company to Rs 0.17 in FY09

from Rs 3.06 in FY05.

0

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009

Profit After Tax

Profit After Tax


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EARNING RATIOSEARNING RATIOS::ON THE EARNINGS SIDE, THE DIFFERENT EARNINGS RATIOS HAVE SHOWN AON THE EARNINGS SIDE, THE DIFFERENT EARNINGS RATIOS HAVE SHOWN A

DECLINING TREND OVER THE LAST 5 YEARS. THE MAJOR REASON FOR THISDECLINING TREND OVER THE LAST 5 YEARS. THE MAJOR REASON FOR THIS HASHAS

BEEN THE DECLINING PROFITS AFTER TAX OF THE BANK.BEEN THE DECLINING PROFITS AFTER TAX OF THE BANK.

RETURN ON EQUITYRETURN ON EQUITY

The ROE declined from

levels of 53% in FY05 to

17.8% in FY07 and then

further declined to 3.5% in

FY09. Also the return on

deposits has declined from

5.39% in FY05 to 0.32% in

FY09 1970

1980

1990

2000

2010

2020

2030

2040

2050

2060

2070

1 2 3 4 5

Return on Equity (%)

year


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EARNING RATIOS: Return on DepositEARNING RATIOS: Return on Deposit

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1 2 3 4 5

Return on Deposits(%)

year


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ROAROA

ROA has similar trend to ROE.

It has declined from 3.9% in

FY05 to 0.25% in FY09.

2002

2003

2004

2005

2006

2007

2008

2009

2010

1 2 3 4 5

Return on Assets (%)

year


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Risk management in Standard Chartered bank.Risk management in Standard Chartered bank.

y Operational risk is the risk of direct orindirect loss due to an event or action resulting from

the failure of internal processes, people and systems, or

from external events. The Bank seeks to ensure that key

operational risks are managed in a timely and effectivemanner through a framework of policies, procedures

and tools to identify, assess, monitor, control and report

such risks.


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Risk management in Standard CharteredRisk management in Standard Chartered

bankbank

y ORC (Operational Risk Committee) is

also responsible for ensuring adequate

and appropriate policies and procedures

are in place for theidentification, assessment, monitoring, con

trol and reporting of operational risks.


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bankbank

y Compliance and Regulatory risk includes

the risk of non-compliance with regulatory

requirements. The Compliance and Regulatoryrisk function is responsible for establishing and

maintaining an appropriate framework of

compliance policies and procedures.

Compliance with such policies and proceduresis the responsibility of all managers.


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bankbank

y Legal risk is the risk of unexpectedloss, including reputational loss, arising from

defective transaction or contracts, claims being

made or some other event resulting in a liabilityor other loss for the Bank, failure to protect the

title to and ability to control the rights to assets

of the Bank (including intellectual property

rights), changes in the law or jurisdiction risk.


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bankbank

y The Bank manages legal risk through Legal &

Compliance function, Legal risk policies and

procedures and effective use of its internal and

external lawyers.


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bankbank

y Reputational risk is any material adverseeffect on the relations between the Bank and

any one of its significant stakeholders.

y It is Bank policy that the protection of the

Bank's reputation should take priority over all

activities including revenue generation at all

times

a project of standrad chartered “commercial bank management”

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