The country’s largest foreign lender bank in terms of branches, Standard Chartered, is now aiming to expand its corporate client base by 10 per cent.
The bank initiated the step after recording a fall in its corporate book in 2015 and flat growth in 2014.
About new initiatives, Sanjeev Paul, regional head, commercial banking, said: “India remains a key market for us. We are making sure there is far more stringent due-diligence when we book new clients. There have been problems in the past and it takes time to come out of it.
“The positive thing is that the steps taken in the past 12-18 months are beginning to take shape in terms of numbers.”
Within the commercial banking business, Standard Chartered’s focus area is the midsize corporate segment of annual turnover between Rs 70 crore and Rs 300 crore.
The bank also has the middle market segment of companies with turnover between Rs 335 crore ($50 million) and Rs 1,340 crore ($200 million). Its third segment comprises the large local corporates, where the turnover goes up to Rs 10,000 crore ($1.5 billion).
Mentioning about the ways to reach the midsize corporate segment, Paul from Standard Chartered said they are using a strategy they term as “banking the universe”.
He further explained, “If a multinational company is sourcing from India, you use their supply chain as your universe and finance all their suppliers. So, the performance risk has been taken care of, as the Multi National Company (MNC) would have also done their due-diligence. And, with the MNC, we try and get into an agreement that if the supplier defaults, the MNC will stop working with them. This allows us to curtail risks.”
The bank, at present, is sourcing about 60 per cent of its new clients via the above quoted method.
Despite the rise in competition and the fact that private lenders have been wresting market share from foreign banks, the latter remain confident. Paul said they are focusing on offering more value added services such as risk-based solutions or helping India clients in setting up offshore business.
In the first six months of this calendar year, Standard Chartered India incurred a loss of Rs 167 crore ($25 million), lower than the loss of Rs 1,849 crore ($276 million) in the corresponding period last year. It has reduced exposure to certain sectors. The management has said the management of bad loans has significantly dropped and recovery is on track.
