Following is the transcript of a CNBC interview with Anna Marrs, Regional CEO, ASEAN and South Asia of Standard Chartered Bank. The interview was broadcast on CNBC on 24 April 2017 at 08:10AM SG/HK Time, during CNBC's "Hong Kong versus Singapore" theme week.
All references must be sourced to a "CNBC Interview'.
Interviewed by Dan Murphy, Correspondent, CNBC and Bernie Lo, Anchor, CNBC.
Dan Murphy: Now the global operations of the bank are also run here at Singapore. Why here and not anywhere else?
Anna Marrs: I think Singapore has a number of advantages as a financial sector. First of all, it's the gateway to ASEAN, it's very strategically, geographically located. Another thing it has going for it is great connectivity - it's very easy to go in and out of Singapore. And thirdly, it's a very pro-business environment. So that World Bank report, the one that your colleagues mentioned, cites that it takes about six days, six working days to open a business here in Singapore. We really feel that.
Dan: So the fundamentals are really strong in Singapore but you only need to open up the newspaper to see that there's really alot of uncertainty about the financial space here. We've seen a slowdown in IPOs. Capital markets have also seen less activity. Do you think the downside risks for the financial space here are rising?
Marrs: I think that Singapore is really in the right places where the growth is. So if you think about the deep capital markets here, this ability to finance regional growth, its focus on wealth management, the sort of access to regional and international wealth management opportunities from Singapore.
And thirdly, which maybe should be firstly, these days is fintech. Singapore's very committed to developing its fintech center. Singapore committed $160 million over five years to invest in fintech here. So they really plan to build on the lead they've already developed.
Dan: And Anna, my colleague Bernie has a question for you.
Bernie Lo: Hi Anna, Bernie in Hong Kong. I suppose we have, we do still, the benefit today and have benefited from years of being on the doorstep of China. I mean when Shenzhen companies, you know, when mainland entrepreneurial type companies, when peace ships that they become known now as private ships, like, you know, start thinking of going public, naturally their mindset naturally sort of morph over to Hong Kong for, if no other reason, initially than proximity. Obviously you have to consider more than just proximity, but at least it's the first option for a lot of these companies. So Hong Kong does have that going for it, doesn't it?
Marrs: I think when you look at where China is investing and you look at the one-belt one-road markets, it's not just about Hong Kong. Hong Kong might be a gateway. Absolutely, but as I travel around our one-belt one-road markets and Standard Chartered interestingly is a more one-belt one-road markets than any other bank. You really see in steel, the scale of Chinese investment. A lot of that will flow through Singapore into ASEAN and through Hong Kong and Singapore to the rest of the world.
Bernie: Right. So you're saying the one-belt one-road (OBOR) is sort of an offset to the natural proximity then. So too you can't really have a conversation without including OBOR nowadays.
Marrs: I think we're going to see, given the scale of that investment, is Hong Kong can be a gateway, Singapore can be a gateway, but it is so global in its nature that you can't just rely on proximity anymore.
Dan: Anna, I also wanted to ask you about some of the other challenges in the region. Last year for Standard Chartered in particular, we saw income down about six percent in Singapore and at the time, the bank sighted what was a challenging operating environment here. Standard Chartered also saw fewer private wealth clients, I believe, coming through. Tell me, do you think the outlook has improved in the first quarter of this year and what's the outlook for the rest of the year? Are you optimistic that the bank can overcome some of the recent challenges that it has faced and continue to grow in this region?
Marrs: If you look back on the strategy that we set out in the autumn of 2015, we really started talking about securing our foundations. When you look at our 2016 results, we see really strong progress there. Whether it's credit risk, operational risk... Really getting that that the footings of the bank in good shape.
Now we also talked about taking cost out. We've made good progress on our cost agenda. We've set a target of $2.6 billion. And we've done about 1.6 of that at the end of last year.
But critically we also talked about investing in innovating. And we know that we are in markets that are growing, our clients that are growing, thus we can get the bank back to growth to all we can be. And Singapore plays a key role in that.
One of the places that we're investing meaningfully is in technology. We're spending about a billion dollars a year now on technology - research and development, and interestingly, our technology headquarters is here in Singapore. So it really is an important business and tech hub for the bank.
Dan: That's right; Standard Chartered has the accelerator program which really ties in nicely with what the Singaporean government is really working to push here to really encourage Singapore to be a fintech hub. When it comes to your competitors, though, do you see fin tech as a threat to the business or is it an opportunity? Is your, you know, traditional competitors sort of being side-lined by this emergence of new technology?
Marrs: I think technology is going to keep us on our toes. Both start-ups and incumbents. And when I look at the way Singapore is committed to investing behind that, I see them focus not just on start-ups, although clearly their work with fintech start-ups is important, but also incumbent banks. There's this interesting statistic that about $11 billion was applied in fintech in Asia last year. And actually that overtook the U.S., so we're seeing more tech here than anywhere else.
What it means for incumbent banks is you're going to have to, as I said, stay on our toes. Adapt. You know if we see new start-ups and new technology coming out, what can we use? But also invest, really, to improve the experience for our clients ultimately, to make things faster and better.
Dan: And when it comes to the Singapore, Hong Kong contrast, which is what we're really focusing on today, you know Singapore's a big private wealth management hub, and as CEO, that's something you've really been focusing on as well to sort of drive the business into that area, build on the private banking side, build on the private wealth management side. Are you seeing progress there and do you expect that to play a larger role in the bank's earnings in the future?
Marrs: We are. Not just private banking, but also serving our affluent clients. One of Standard Chartered's great strength is retail presences across many ASEAN countries. We're the only bank, actually, in all 10 ASEAN markets on our corporate side, and as we invest in that, it's not just about serving the super affluent, it's also about managing our, you know, sort of, regular network clients who may have you know few hundred thousand to invest, in helping them to invest that safely and for growth.