Business Overview of Standard Chartered Bank

Business Overview of Standard Chartered Bank

Standard chartered bank is world’s one of the fastest growing financial institution, it has also a history of over 150years. Including all subsidiaries, associates and joint ventures SCB has stretched its 1,200 branches in over 56 countries at the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the United States of America. Standard Chartered Bank is Asia’s top syndication bank and is also strong in debt financing. As one of the world’s most international banks, Standard Chartered Bank employs over 44,000 people representing 89 nationalities, worldwide.

The Standard Chartered Group is remarkable banking business. Though its root is from authentic British, its operational division, its set of connections or network and indeed its profit stream are overwhelmingly international. The name Standard Chartered comes from two original banks from which it was founded. One of the banks is the Chartered Bank of India, Australia and China and the other bank is the Standard Bank of British South Africa.

The Chartered Bank was founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853 while the Standard Bank was founded by John Paterson in the Cape Province of South Africa in 1862.

In 1969, the decision was made by Chartered and by Standard to undergo a friendly merger. On January 30, 1970 the new shares of the Standard and Chartered Banking Group Limited were listed in the London Stock Exchange. Queen Elizabeth II opened headquarters of the Standard Chartered Bank PLC in March 20, 1986. Becoming stronger after merger, Standard Chartered Bank embarked upon serious expansion in Europe and United States, The Standard Chartered Merchant Bank was built up from a number of acquisitions made during the 1990s. In the thirty years, Standard Chartered Bank has experienced continuous growth, which led to its becoming one of the top 100 listed banks in the world. It was also judge the best bank in the Asia-Pacific region in 1993 and 1994 for its rate and excellent service.

STANDARD CHARTERED BANK BANGLADESH

The Chartered Bank started operating in Bangladesh in 1948, opening a branch in Chittagong. The branch was opened mainly to facilitate the post-war reestablishment and expansion of South and Southeast Asia. The Chartered Bank opened another branch in Dhaka in 1966, where it is still headquartered.

After the merger of the Chartered Bank with the Standard Bank in 1969, the Standard Chartered Bank took up a program of expansion. It increasingly invested in people; technology and premises as its business grew in relation to the country’s economy. In 1993, there was an organizational re-structuring, which led to a substantial expansion of the Bank’s business.

Bangladesh is under the Middle East and South Asia (MESA) region, with the controlling office in Dubai. Its correspondent relationship with Sonali Bank, the largest bank in Bangladesh, gives its customers access to all major centers in the country. Standard Chartered Bank’s worldwide network facilitates convenient connections with foreign trade and remittance business. Standard Chartered Bank’s branch banking license in Bangladesh allows it to offer a full range of banking services.

At present the Bank has 18 branches in Dhaka, it also have one offshore banking unit inside the Dhaka Export Processing Zone at Savar, one branch in Narayanganj, three branches in Chittagong, one branch in Khulna, one branch in Sylhet, one branch in Bogra.

In the year 1999, Standard Chartered has acquired the operation of Grindlays Bank in the Middle East and South East Asian countries. Former Grindlays Bank started its journey in Bangladesh in 1905 under the name of Grindlays Bank. Standard Chartered Bank took-over the operation of ANZ Grindlays Bank in Bangladesh as a part of acquisition of the South East Asian and Middle East operation of the Australia and New Zealand Banking Group. SCB with its 18 branches and booths across Bangladesh has employed more than 600 people. The acquisition of ANZ has enabled Standard Chartered Bank (SCB) to access 500,000 new customers and 40 branches in India, and this made them one of the biggest banks in this region and in Bangladesh it is the largest foreign bank.

The Bank presently has 26 outlets in 5 cities in the country. The network of SCB Bank in Bangladesh includes:

• 18 Branches in Dhaka city
• 1 Branch in Savar EPZ (recently started with full banking operations)
• 1 Branch in Narayanganj
• 3 Branches in Chittagong
• 1 Branch in Khulna
• 1 Branch in Sylhet
• 1 Branch in Bogra

SCB engages itself for providing best quality banking service in retail, commercial and corporate banking segments. The countries top enterprises; multinationals, large local corporations and many financial institutions are served by SCB. With total asset based of BDT 17.5 billion and annual turnover of BDT 1.78 billion, SCB in Bangladesh is among the top performing multinational bank.

The Functional Structure of Standard Chartered Bank

SCB Bangladesh operates with a functional structure with sufficient flexibility to obtain the benefit of matrix system of organizational structure. The functional structure that relies on grouping of people on the basis of common expertise and experience allows sufficient opportunity to become more specialized and productive by doing the same work repeatedly and over long exposure to the work.

Such a structure provides greater control over quality control and effective allocation of fund and task to the employees. The structure is also conducive for the employees to enjoy greater autonomy and span of control.

At SCB, the functional structure is applied with a great deal of flexibility. That is, the bank intends to shrug off the demerits of the functional structures by implementing certain flexibility and allocation of authority that enables it to reap the benefits of matrix structure. This process at SCB is achieved by greater automation of the process by using of computer technology and forming of crossfunctional teams to develop new products and improve the quality of the services or address specific operational problems. SCB is known for revolutionizing the banking industry of Bangladesh through the adoption of newer technology such as ATM machines, Tele banking, credit card operations etc.

SCB in Bangladesh can be broadly divided into two functional areas;

• Business & Support Division of SCB
• Product Division of SCB-consumer, corporate and institutional banking

Business division:

• Corporate Banking:

The Corporate Banking Group in Bangladesh has displayed a spirit of community involvement by working with NGOs to underwrite soft loans. Standard Chartered Bank offers corporate financial services to the local organizations. Corporate clients of Standard Chartered comprises of top local and multinational companies operating in Bangladesh and all the accounts are supervised by a Relationship manager who maintains bond and provides all the necessary financial assistance. They aim to maintain detail knowledge of the client’s business and to provide time worthy business solution to enhance client’s development. The expertise of the Institutional Banking and Treasury groups is also support corporate client in providing financial solutions. The Offshore Banking Unit (OBU) in Savar offers full range of facilities to overseas investors. Standard Chartered Bank offers its corporate customers:

• The wide varieties of lending needs with skilled and responsive attention
• Project finance and investment consultancy
• Syndicated loans
• Bonds and Guarantees
• Local and International Treasury products

Trade finance facilities includes counselling, confirming export L/Cs and issuing of import L/Cs, backed by its international branch and correspondent loan network Bond and Guarantees Project finance opportunities for import substitution and export oriented project.

• Treasury:

Throughout the world the foreign exchange and money market operation of the Standard Chartered Bank is extensive. Foreign currencies happen to be one of its special areas of strength. A 24 hour-service is provided to customers in Bangladesh through the Bank’s network of dealing centers placed in the principal of the world.

The Bank’s treasury specializes in offering solutions to those who wish to manage interest rate and currency exposures that result from trade, investment and financing activities of other dynamic economies of the region. Treasury operations are developed in line with changing market conditions to provide the best services to its customers. According to BAFEDA (Bangladesh Foreign Exchange Dealers Association), Standard Chartered Bank presently controls 42% of the local foreign exchange market’s traded volume.

• Financial Institution:

Financial Institution Department (former Institutional Banking) is a specialized banking unit of Standard Chartered, providing products and services to the specific needs of other banks and financial institutions. It offers various services like L/C Confirmation, Negotiation, Inter and Intra Bank Guarantee, Local Bill Discounting, L/C Advising, L/C Transfer, L/C amendment advising, Reimbursement Undertaking and Authorities, Fund Transfers, Export proceeds, BDT Draft Drawing, International Payments (TTs) etc. The bank offers foreign missions, voluntary organizations, consultants, airlines, shipping lines, and their personnel the following financial services:

• Current accounts in both Taka and other major foreign currencies
• Convertible Taka accounts (these funds are freely convertible to major international currencies).
• Custodial and Clearing Services:

Headquartered in Singapore, Standard Chartered Equator fulfils the group’s strategic commitment to the provision of custodial service in Asia. Equator’s customers are primarily foreign global custodians and broker/dealers requiring cross border information as well as sub-custodian services. Standard Chartered Bank, Bangladesh is responsible for the planning in Bangladesh, but the overall management of the custody business is based on Equator’s international business strategy.

• Consumer Banking:

Superior retail banking services comprising a wide range of deposit and loan products are offered by the Standard Chartered Bank to its individual customers.

The Consumer Banking division constantly faces challenges and meets them by developing new products and services to fulfill the specific requirements of local and foreign customers. Bank offers a 24-hour service in Bangladesh through its Money link ATM network and Phone-link Phone Banking services.

• Card Division:

Card is the latest area that has been identified for rapid development. The bank is the one of the acquirers of three major cards in Bangladesh. Two of the credit cards are VISA and MASTER CARD and the one is the charge card known as Japan Credit Bureau (JCB). Standard Chartered Bank is the subsidiary or secondary agent of the credit cards and a primary agent of JCB.

SCB started its cards operation in 1989 as a part of retail banking. Initially, SCB’s card market was very small, with only 30 merchants. But seeing the economies and the consumers’ attitude towards the credit card, it has given the opportunity to expand their market base by acquiring high quality merchants in the chosen segment. The bank is the first to introduce the TAKA CREDIT CARD. The card is issued basically to a person’s name and the specific person can use the card in anywhere in Bangladesh.

Supporting division

• Operation:

Operation is part of the support division, which helps to run the businesses of the bank in a smooth and controlled manner. Since it helps mainly in processing the works of the business units, any mistakes made can be easily detected and on time. Following are the main functions of the operations department:

1. Central operations deals with the closing and opening of accounts and other payment and account related processing of the Personal Banking division.
2. Treasury operations help to deal with the processing works of the treasury division. Loan Administration Unit (LAU) deals with the processing of the Corporate Banking division.
3. Operations also have a department that deals with internal projects that arises from the need to deal with certain problems or to make certain changes.

• Finance, administration and risk management:

This department deals with the financials of the organization and reporting. It looks after administration, audit and back office operation, take care of taxation and financial control of the bank, and keeps track of overall credit operation.

• Information and Technology Department:

This department is instrumental in the running of all the computerized operations of the bank. They help in the implementation and generation of computerized reports.

Another major duty of the department is to maintain communication with the rest of the world.

• Human Resources:

This department deals with the people of the organization. It manages recruitment, training and career progression plan. Standard Chartered Bank highlights the importance of developing its people to create a culture of customer service, innovation, teamwork and professional excellence.

• Legal and Compliance:

This department deals and ensures compliance with the local (country) and group regulations. In the UK, Standard Chartered Bank is regulated by the Bank of England, while in Bangladesh local banking laws regulate it and rules set by the Ministry of Finance and Bangladesh Bank. It also encourages its staff to conform to an internal culture of ethical behavior and sensitivities to the culture and religion of the country.

Some of the key areas that the Legal & Compliance department has to take care of are: any kind of legal issues, to advise the CEO regarding all matters and the management on legal and regulatory issues, correspond regulatory compliance issues to MESA Regional Head of Compliance, and supervise internal control (e.g. internal audit).

• Credit:

This department is responsible for credit rating and approvals of corporate clients. The approval is mainly based on the risk analysis of the corporate clients done by the Corporate Banking division. To identify the customer and rating them on the risk basis, bank uses different scale as how to know the customer by the nationality, professional and status in the society.

• External Affairs:

The external affairs department deals with issues like social responsibility, sponsorship etc. This department deals with advertising, public relations, promotions, partial marketing which involves disseminating new products and services to customers and above all ensuring service quality.

• Social Welfare Activities:

Standard Chartered Bank believes in the interdependence of world communities and hence the need of investing in community welfare. In Bangladesh, Standard Chartered Bank is a corporate sponsor of the Young Learners’ Center in Dhaka and Chittagong, which were started by the British Council. It is also involved in Fresh Water for Slum Area project with a major NGO. Standard Chartered have also funded the project of eye hospital at Dhaka.

Product Division of SCB – consumer, corporate and institutional banking

Different types of customers are targeted by differenet divisions. Consumer Banking Division (CB) and Corporate Banking Division namely Corporate and Institutional Banking (C & I) are two main divisions. There are different divisions for targeting different type of customers. Mainly it consists of two divisions, that is Consumer Banking Division (CB) and other is Corporate Banking Division named Corporate and Institutional Banking (C & I).

Consumer Banking

Consumer banking division meets the needs of individual customers with various products like Savings Account, Extra Value Savings Account, VIP Saver’s Account, Freedom Account, Access Account, Call Deposit, Graduate Account, FCY Deposit, NFCD Fixed Deposits, RFCD Account, Personal Loans, Auto Loans, Flexi loans, Cash Line, Installment loans, etc. This department also deals with other savings instruments like education savings scheme, rainy day scheme, marriage day scheme, millionaire scheme (some printed brochures are enclosed in the Appendix)

Corporate & Institutional Banking

Corporate and institutional banking meets the needs of companies, banks and other financial institutions. Standard Chartered provides a full range deposit and loan products to it’s corporate clients. Rapid decision-making is an important feature of SCB’s services to international and domestic companies doing business in Bangladesh. All accounts are assigned to a Relationship Manager to look after client needs. Each relationship manager keeps close contact with the client obtaining indepth knowledge of the client’s business and providing timely advice.

This division’s also include products such as,

• Network banking and borrowing services like working capital loan, long term loans, short term loans, margin account
• Commercial large loans
• Real estate apartment loans
• Heavy transport buying loans
• Real estate mortgage loans
• Construction loans
• Restaurant loans

It also includes products like international trade related services such as L/C issuing, L/C amendment, L/C Transfer, L/C Confirmation, Negotiation, Bank Guarantees, etc. These products are only served to the corporate clients of the bank, and those are mostly local corporate, large and local corporations, multinational national companies.