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StanChart ‘Isolated’ from Debt Crisis: Asia CEO

Standard Chartered has no sovereign exposure to Europe, said Jaspal Bindra, group executive director and Asia CEO of Standard Chartered Bank, adding that the lender’s cost of funding will be not be impacted as a result of the EU debt crisis.

“We are highly liquid, we are a net lender to the inter-bank market, from that point of view we don’t suffer the consequences of a higher cost of borrowing from the European market,” Bindra told CNBC Monday.

Standard Chartered Bank generates more than 90% of its income from emerging markets; namely Asia, Middle East and Africa.

However, Bindra noted that the lender is likely to feel the pinch of the “macro effects” of the sovereign debt crisis.

“The impact on Asia will be more in terms of sentiment; in terms of markets, currencies, interest rates.”

Despite these risks, he said that stress tests performed on various segments of the bank’s businesses confirm that credit is holding up “very well”.

StanChart Keen on Expanding in China

“We are…very well capitalized…so there is no immediate need for raising capital,” he stressed.

However, in terms of fundraising plans, Bindra indicated that the bank is “very keen” on listing in the China market when the regulations allow for it.

“We would like to do it largely for the same reasons we did India, which is really to build our presence and profile in that market. We’ll have to do the size it takes to get to that position,” he said, giving no indication of the scope of the future IPO.

The British bank listed on the Mumbai stock exchange last week, although the debut was muted with its Indian depositary receipts closing lower on the first day of trading.

Opportunities Beyond China

“In many ways we think that the Asia story is too much dictated by China alone.”

Along with South Korea and Vietnam, Brinda said the bank is “very excited” about the Indonesian market. “Indonesia is clearly a bright spot within that 250 million people, rich in resources,” he added.

StanChart has a large presence in Indonesia, including an investment joint venture in Bank Permata.