Standard Chartered revisits SME lending portfolio

MANILA, Philippines - Standard Chartered Bank of the Philippines (SCBP) is revisiting its lending portfolio for the small and medium enterprise (SME) sector its top executive said.

‘’We are studying it seriously,’’ Mahendra Gursahani, the bank’s new chief executive, said in a press briefing yesterday.

The British-owned bank said it has a considerable deposit portfolio from existing SME accounts but its SME loan portfolio remains insignificant.

SCBP said these loans will not only increase the SME’s ability to expand but also to link up with huge conglomerates and multinationals.

SCBP and the World Bank’s International Finance Corp. (IFC) have entered into a $1-billion unfunded risk participation arrangement for trade finance in emerging markets.

SCBP would assist domestic banks in the emerging markets to extend trade financing to their importer and exporter clients. The IFC, on the other hand, would serve as the guarantor for the portfolio, thus providing credit protection and capital relief on the portfolio over three-and-a-half years.

The global financial crisis sharply curtailed the availability of trade finance in emerging markets, and both IFC and Standard Chartered have been working to promote trade finance arrangements that maintain and expand financing lines for developing economies.

Gursahani said the London-based bank has always focused primarily on the markets of Asia, Africa and the Middle East. It has strong operations in Europe and the United States but the key focus remained on the emerging markets especially after the financial crisis emanating from the developed economies.

“We are sitting on a good part of the global economy, and we are in the middle of trade flows,” the SCBP chief executive said.

The bank is already positioned for trade facilitation from the Philippines to other Asian countries, from Asian nations to Africa and the Middle East. This, in turn, would create opportunities for trade facilitation with developed countries. After all, Standard Chartered has 1,700 offices in 70 markets globally.

In the Philippines, it is looking for a suitable site for its sixth branch license. It is relocating its Cebu branch to the Ayala business district, while its four remaining branches are all located in Metro Manila.

It will likewise rely on electronic channels and corporate accounts to grow its market base as it is limited to only six branches as a foreign universal bank. Counterparts Citi and HSBC took one step forward by establishing their own thrift banking units to expand their reach.

“We are looking at opportunities and distribution channels,” Gursahani said, adding that Standard Chartered does not operate a thrift bank anywhere.