Date:10/05/2006 URL: http://www.thehindubusinessline.com/2006/05/10/stories/2006051004330600.htm

Back StanChart to diversify into agri financing

M. Somasekhar

Keen to offer entire range of products

MR NEERAJ SWAROOP

Hyderabad , May 9

Standard Chartered, the largest international banker in India, has firmed up plans to enter agriculture and commodities financing during 2006.

It will also consolidate its operations in traditional as well as in the growing retail banking sectors.

The bank is finalising a business model for agriculture financing. Some of the options being explored are to work through intermediaries, build cold storages, warehousing and transportation, according to Mr Neeraj Swaroop, Chief Executive Officer (CEO)- India, Standard Chartered.

Talking to Business Line, Mr Swaroop said in the next 3-5 years, the bank intends to increase its exposure in the small and medium enterprise (SME) segment; middle market through consumer loans and wholesale with focus on areas like technology, services, energy, infrastructure and telecom.

"Our strategy, firmed up a couple of years ago, is clear. We want to span the entire spectrum of products for the Indian market, since the country accounts for 10 per cent of revenue and profits of the bank's worldwide operations," the India CEO, who was here to participate in the recently concluded Asian Development Bank meeting said.

For StanChart, which operates in 56 countries globally, Hong Kong contributed about 20 per cent of the revenues, while Korea was next, especially after the recent acquisition of Korea First Bank.

On the expansion of the Bank's presence in the country, Mr Swaroop said the application for opening new branches was pending with the Reserve Bank of India. "At the moment, we have 81 branches with a good geographical spread in 31 cities and intend to leverage on their strengths," he added.

StanChart is on a consolidation mode in it commercial, wholesale, working capital, trade services, even while strengthening its activities in the derivatives and risk management business, especially cross border activity. On the fluctuations in the interest rates, Mr Swaroop said in the overall market there would be an upward movement in lending rates, even while some pressure on interest rates heading upwards was bound

The bank is also seriously considering project financing in the areas of real estate, especially corporate realty which is experiencing a boom. At present, the exposure is not sizable. Microfinance is another area, where the bank has identified India as among the four countries of attention. In a small way, operations have been initiated in Tamil Nadu and Andhra Pradesh, he said.