Standard Chartered recently won a mandate from Al Mal Capital in the United Arab Emirates (UAE) and announced the expansion of its fund services capabilities in the Middle East to Bahrain and Oman. Stewart Adams, regional head of Investors and Intermediaries, Transaction Banking, Standard Chartered describes the Middle East as an important geographic corridor and part of the bank’s strategy of developing markets and making them more interesting for international investors.
How has Standard Chartered met its expansion plans in the MENA region?
Adams: We’ve expanded the fund services platform in the Middle East across all countries in the Middle East. That has officially been launched but it’s important to say it’s an expansion, and not a new launch, of existing services that we have in other parts of the world. So we’ve now got these services in the Middle East as well to have new clients come on board. Clients in the Middle East are looking for a provider that can give them the capability but more importantly give them the local service when they get the capability on board and that we can do through the DIFC or though in country.
Are your fund services available through Dubai and in country for inbound and outbound services?
Adams: Yes, absolutely. I think one of the USPs is that we have local operational people in the country and service people. So clients can be serviced from the local market and some of them do decide that they want to come to a central point which is the DIFC so it could be up to the service that the client wants.
What has transpired since the MSCI upgrade of the UAE and Qatar and where are custodians in preparation for this upgrade?
Adams: As you know the upgrade really doesn’t take effect until next May but in regards to us at Standard Chartered there is no requirement for any more preparation. We have capacity, we have the technology, the platforms are in place and we have the international broker dealer network in place in other markets as well. So there’s no real requirement for any upgrading of our services or further preparation. We are ready to take the whole spike in transaction volumes when the upgrade is officially in place in May.
When do you expect volumes to pick up in these countries?
Adams: I would say the volumes have picked up slightly. The transaction levels are on their way up but I suppose everyone quoted some fantastic numbers once the upgrade was announced saying hundreds of millions would come in. We will only see that once the allocation from some of the big pension schemes globally comes into the region because we have now had the upgrade and it will be under their mandate so these pension schemes will have to invest into that market. So I think that is where we will see a bigger spike but certainly I would say in the last 3, 4, 5 months there has been an uptake in the number of transactions and an interest across all of the markets in the Middle East.
How will Standard Chartered look to expand in the region going forward?
Adams: We cover the region. There are no gaps with our custody and fund administration in the region. We’ve continued to invest in the platforms we’ve got. We will look to enhance our service when regulation requires it. There could be a requirement if securities lending and when it is allowed in the region, we’ll be ready for an uptick in that. It’s something we have talked about – it’s there but its’ just not come to fruition yet. Maybe there will be an uptick in transfer agency capabilities if the markets ever get what I would say truly retail element. At the minute they are very institutional in nature but if there is an uptake on the retail saver that could be a development that I think could be very good in the market and we would be ready to support that. And obviously with Saudi, there is a great interest in Saudi and whether it will truly allow international investors to come in? That is a great question I don’t think anyone has answered yet. But that market is growing, the transaction volumes are growing. There is a lot of activity in the market place in Saudi. We as a bank are ready to do whatever is required in that market to support it once it opens up but for our clients.
As people become more aware of what is available from a retail perspective through some of the funds, having a good track record and having good growth will hopefully attract more retail investors into these funds and obviously that comes back to us.
What other opportunities exist for you in light of the MSCI upgrade and how are you placed for these markets opening up?
Adams: We’re working very closely with the regulators and government in the development of the market and to be one of their trusted partners to say how can we help develop markets and attract investors into the markets and make it a more interesting prospect for the international investors. So we don’t sit and wait for something– we are actively involved in these discussions. As you know Asia, Middle East and Africa and the Middle East are right in the core of that footprint and the Middle East is a corridor in that strategy. We are a core region for the bank and having been here 90 years plus we are a trusted advisor to many of these regulated governments and we are helping them to develop the markets, which is a benefit both locally and nationally. We are obviously a big trade bank as well and its key on the back of that knowledge and experience of the Middle East. Also with Africa presenting a tremendous opportunity it’s a matter of helping our clients in the Middle East region take advantage of growth in Africa.
Are you growing organically or acquisitively in the region?
Adams: Every provider is here in some manner. Some of them are here only to service clients on a global basis, while some of them serve global clients and the local market so as more come into the markets as the upgrade comes in the better as it raises the competition levels. The more the merrier.
Are you in acquisitive mode in the Middle East?
Adams: We’ll always look to see what’s out there and what’s available and if there is a particular requirement we see coming through form clients. We will certainly look at a market and if it makes sense for us we will go with it. We will grow organically – it’s the best way to grow for our clients and their clients and that’s the way we will look to grow our business.
GC Friday Interview: Stewart Adams, Regional Head of Investors and Intermediaries, Transaction Banking, Standard Chartered
Stewart Adams, regional head of Investors and Intermediaries, Transaction Banking, Standard Chartered describes the Middle East as an important geographic corridor and part of the bank’s strategy of developing markets and making them more interesting for international investors.