StanChart unit to support mid-sized firms' overseas forays
Standard Chartered Bank (Thai)'s new commercial-clients unit is targeting the growing activities of Thai mid-sized firms in overseas markets.
Thailand yesterday became the 21st market to get the unit as StanChart has seen mid-sized firms becoming more active in overseas trade as suppliers and distributors.
Ashish Sharma, senior executive vice president for commercial clients, said mid-sized companies had the same banking needs as large firms, such as cross-border payments or access to capital markets for funding.
The bank has developed four products for this segment – working capital, business expansion, business protection and yield enhancement.
The bank’s customer base had been corporations and small and medium-sized enterprises, but it split out commercial clients with annual turnover of Bt400 million to Bt4.5 billion to support mid-sized companies looking for opportunities in offshore markets in terms of trade and investment.
The bank’s commercial-client loan portfolio has reached Bt3.3 billion from 200 borrowers. This year the bank plans to add 50 customers, mostly from the supply chains of StanChart’s large corporate customers, such as automobile-industry players.
The bank did not set five-year targets for loan growth or the loan portfolio, as the priority is to build a relationship of trust with this segment. A strong relationship will lead to growth in revenue.
Fee income is the target of the bank, as it will focus on transactional banking and cash management for commercial clients.
StanChart has set an ambitious income-growth target from commercial clients of Bt1.2 billion in five years from Bt300 million at present. The commercial-client business will contribute 20 per cent of the bank’s income within five years from less than 5 per cent now.
Most mid-sized companies use basic cash-management services but when they go outside, they need advice from banks on how to manage their cross-border cash flow or how to use more advanced treasury products, such as business protection, to help manage their risk.
Based on the bank’s recent research on Asia’s mid-sized companies, internationalisation is a key focus, as 67 per cent plan to increase sales in existing markets and 63 per cent to expand the number of international markets they operate in.
Mid-sized companies looking for opportunities in Asean require investment and they set up subsidiaries, but beyond Asean they require trade finance.
StanChart says its global network can facilitate those cross-border aspirations of mid-sized companies in Thailand.
