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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
191191
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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Risk management in Standard CharteredRisk management in Standard Chartered
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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Risk management in Standard CharteredRisk management in Standard Chartered
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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Risk management in Standard CharteredRisk management in Standard Chartered
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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Risk management in Standard CharteredRisk management in Standard Chartered
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