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Email ArticleStandard Chartered has set up an onshore presence in Kenya for private banking and wants to grow that business in other parts of Africa, its head of private banking said on Wednesday.
"We have put some staff into Africa. Kenya is one," Shayne Nelson, the CEO of StanChart's private bank, told the Reuters Global Wealth Management Summit in Singapore.
"We are looking to expand."
Africa is increasingly viewed as a continent offering strong possibilities for future economic growth and wealth creation. According to the Boston Consulting Group, Middle East and African households had $4.5 trillion in investible assets in 2010, a rise of 8.6 percent from 2009.
StanChart currently services most of its African private banking clients from offices in London and Geneva.
StanChart is also gaining inflows from millionaires in Asian and other emerging markets as the region's wealthy seek the safety of banks well placed to weather the current uncertainty, said Nelson.
"Standard Chartered always attracts deposits and assets under management in troubled times... If you look back to 2008, a lot of the big build we had came during that period," he said.
Emerging markets-focused StanChart, which has a core Tier-1 ratio of 11.9 percent, one of the highest among global banks, reported a 31 percent rise in assets at its private bank during the first half of this year.
The private bank also increased its pool of relationship managers by about 10 percent from a year ago to over 470 and added more than 2,500 new client accounts, it said in a mid-year report.
According to Nelson, Asia accounted for about two-thirds of the private bank's assets of more than $50 billion.
Cost Advantage
Nelson said private banking clients were sitting on lots of cash and not investing in financial products that generated higher fees and commissions.
But this was less of a problem for StanChart as the private bank's cost-to-income ratio of below 80 percent provided it with a cost advantage over most of its competitors. The deposits by wealthy clients could also be tapped by the wholesale bank.
"I don't need to build lots of new product experts all over the place because I've already got them embedded within the (Standard Chartered) infrastructure. So that gives us a cost advantage," he said.
"A lot of the private banks are running cost-to-income ratios of 80 percent and above. Standard Chartered is not in that category," he added.
