Positively Positioned

MEA Finance met with Dr. José Viñals Group Chairman, Standard Chartered Bank during his recent visit to Dubai, and here in the full-length cut of our interview with him, he underlines the importance of the region to the bank and the opportunities it promises, the improvements that digitisation is bringing and how the principles of ESG align with those of the bank

What is your view on the Africa and Middle East outlook in the current macroeconomic environment?

Well, the first thing to be said is that Africa and the Middle East is a very diverse region, where you have oil and commodity exporting countries as well as having all the commodity importing countries. And I think that, at present, given the elevated prices of oil and other commodities, this is a bonus for the first group. We can see that here in the UAE and also in Saudi Arabia, and in other countries across the region which is something that is very positive for them. But if you look at other markets, other countries in Africa, there are some which are going through a difficult situation. There are some lowincome countries with debt vulnerabilities.

They are in debt distress already or close to becoming debt distressed. But you also have other markets, which are important, and which are doing well. So, it’s a very heterogeneous region where we can see a little bit of everything. I can tell you that our Africa and the Middle Eastern region has had the best performance in many years. And that we have a very positive on the outlook for these places, in spite of the current difficulties in some countries.

What opportunities are you seeing and what are the potential growth areas across Africa and the Middle East?

We identify a number of opportunities, and in the discussions that we have had this week here in Dubai, where we have had one of our first overseas board meetings, we have been talking a lot about such opportunities. Because in the world, we know about the challenges, we know about the downside risks, but there is also an upside, and there are opportunities. And in a region which is so broad and so diverse, certainly, there are opportunities. We can see them clearly here in the UAE. We have been speaking to clients during our days here and there are many interesting and important things that we can do with them, and that we are doing with them. The UAE for example, is an international trade, financial and business hub. We have trade and connectivity in our DNA so there are important opportunities coming from this, such as making sure that we act as a bridge between different parts of the region, but also between the region and the rest of the world. So, again, with those corridors which are now well established across the emerging markets, between Africa and the Middle East and Asia, and also between Africa, the Middle East and Europe, and North America, this is where we really bring our capabilities to help our clients do business.

And we see important areas of opportunity. For example, the region has a lot of natural resources, which I think is a great opportunity, not only in terms of oil-producing and exporting countries, but also in minerals, many of which are very important for the new economy that is coming.

There are also opportunities to help finance development across these regions, particularly in Africa where there is a clear need for building the infrastructures necessary for development and growth. More opportunity still, resides in providing sustainable finance, a critical element along the path to the transition to Net Zero, something that will happen gradually.

We also see important opportunities in working with our clients, with our corporate clients in particular in order to offer them professional support and financing for the transition towards Net Zero. Again, it is something which will not happen overnight, it has to happen affluent clients and also to our corporate clients through digital means, providing them a seamless access to the fantastic network that we have through Asia, Africa and the Middle East in particular.

So, these are some of the areas of opportunity in addition to the demographics in Africa, in the Middle East, but particularly in Africa, with its increasing rate of urbanisation, which again, for a bank like ours are important areas of future business. So, no shortage of opportunities in the region. We are very positive about the region, it is part of the challenges that we understand and that we try to navigate as well as possible.

Can you comment on Standard Chartered Bank’s performance, commitment and positioning in Africa and the Middle East?

Our strong commitment to Africa and the Middle East has been there from the beginning and will always remain. And this is extremely important. We have a very extensive franchise in the region. We are the main international bank in Africa. We are one of the main international banks in the Middle East and we continue to invest and to strengthen our capabilities in the region so that we can continue to provide all our clients -retail clients, affluent clients, corporate clients, the best services, so demonstrating that our commitment is there.

gradually from brown to semi brown, to semi green, to green because you cannot in most instances go directly to green overnight. And the energy mix is going to include green and non-green components for quite a long time still. But we want to make sure that we move the world in the right direction through our operations, working closely with our clients.

And another big area of opportunity is digital. We are introducing a number of digital innovations across our footprint in order to help people, to include people in financial channels, to provide better services to our retail clients, to our

And that commitment has been strengthened recently by our entry into two very important markets, Egypt and Saudi Arabia. In Egypt, we have gotten a provisional banking license, and where before we had before a representative office, now this is going to allow us to do banking from inside of Egypt and be able to bring our capabilities much closer to our clients. And we have a formidable sort of set of clients in Egypt. This is a country that we think has a bright future over the medium term. There is a lot of potential there.

Saudi Arabia is another very large market. In Saudi Arabia we also got a banking license and we have opened a bank here too. Before this, we only had a capital markets license. And again, this is a country which is going through a process of diversification in the pursuit of their vision and there are plenty of opportunities here. Its scale is very important as the largest country in the Middle Eastern region and again, we’re very pleased to be there. So, we have a strong commitment to this part of the world, operating in eighteen markets across the region, and though we decided to exit a few small markets in order to maximise the opportunities to make the biggest contributions to our clients and to the business, our commitment to Africa is unshakable, and it will remain. So, that is what we’re doing.

How is the Standard Chartered managing digital transformation trends?

Since the pandemic, all the digital trends that we were seeing already beforehand have accelerated dramatically. I think this is something that we have noticed in our personal lives, but also in the business. Now the majority of the operations that we generate with our retail clients are generated digitally. We are also doing more and more digital transactions with our corporate clients. And ten years back, when people talked about technology, it was something that was supposed to be useful to improve the efficiency of your internal operations and to save on costs. But now it is fundamental to provide a second-to-none service to your client. You have to maximise their convenience. Clients need to be one click away from you and you need to be able to serve them with whatever it is that they want, in no more than 3 clicks. So, the investment that we have been making on the digital front has been fantastic, both inside of the bank in terms of our corporate business, in terms of our retail banking, but also in terms of new things and new digital platforms that we have created.

For example, digital banks. We have created, in Africa, a great digital banking proposition. Outside of the Africa, Middle Eastern region, we have created in Hong Kong, a very successful digital bank. We have reproduced that model in Singapore. In Indonesia, we have entered into a partnership with Bukalapak, which is the Amazon of Indonesia, in order to serve their more than 100 million clients. In India, we have created a platform that now we have reproduced in Kenya called Salt, to provide all sorts of services for small and medium sized enterprises. We provide banking and other services, auditing, financial and non-financial are supplied by high quality providers that we bring on to the platform. And again, this is something that we are re-exporting through our market. So, digital is certainly a very fundamental part of the new Standard Chartered.

And we also have Standard Chartered Ventures (SC Ventures), where we are investing in developing a number of ventures with external partners in many fields. And many of those ventures would be applicable to the bank in the future, and also will have a life on their own. It will be able to create value also in that way for the bank and its shareholders. So, we are very pleased with the innovative angle of the bank. And digital is yes, one of our key bets going forward.

How important are ESG considerations in the world of banking and finance today?

Well, ESG is extraordinarily important nowadays for any organisation but particularly, I would say, for financing, for global banks like us. Of course, the G, which stands for governance, means that you have to have the right governance, because that’s something which will make sure that the organisation goes in the right direction. And in fact, in our case, we want our profit to be fully aligned with our purpose, which at the end, tries to use banking to improve the lives of everyone that we touch as clients and other stakeholders.

The S in ESG has to do with the social dimension. And that is related to things like diversity, like inclusion. We have a very international footprint with 59 markets where we have a direct presence, and then many others where we have operations directly from those other markets. And so, all things having to do with all facets of diversity are critical. We have more than 120 nationalities in the bank. We very much value diversity in all of its forms. We were born half in Africa, half in Asia, and then became Standard Chartered. So, our roots are really very diverse. And so, we feel that diversity and inclusion is something which is not just a matter of fairness, it’s something that makes us be a much better organisation, much more productive, increases our employee value proposition so we can attract the best talent in the world and also deliver the best services to our clients, who also coming from so many countries are very diverse themselves. So, those aspects of diversity and inclusion as part of the S in ESG are critical.

And we also have the E of environment. And this is something to which we are very strongly committed. We are very strongly committed to help the world move towards Net Zero, what is normally defined as a just transition. Which for a bank like us, that banks primarily in emerging markets, means that we need to help our clients and the markets in which we operate go down the path towards the transition to Net Zero, but in a way which is just, which means that is consistent with furthering the economic and social development objectives of those markets, of those economies, of those societies. So, that is something where we are also very invested. We have committed, between now and the end of the decade, to mobilising $300 billion for green and transition finance. We have established objectives in terms of emissions for the high carbon sectors in our portfolio. And we are developing many products (many which are already on the market), sustainable products, sustainable finance products so that we can provide our clients or corporates, not only with the best professional support, but also with the best financing to help them move along in the transition.

And just to conclude on this, our strategy for the bank is supposed to deliver 3 standards, which go really very well with the ESG we are talking about. The first is accelerating Net Zero through the things that I’ve just mentioned. The second is lifting participation, trying to bring in activities that will improve the lives and the conditions of one billion people in our markets.

And the third is resetting globalisation. Globalisation, which I think has served the world well, needs to be perfected, not abandon or discarded, but perfected. And that means making a globalisation which is more inclusive, so that the benefits can be distributed among all people, not just a few; more sustainable and fairer. And these are the three standards we have put in line with ESG ideas which are so critical for organisations nowadays.