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Friday, Feb 23, 2024

Standard Chartered says Saudi Arabia has opportunities for growth

Standard Chartered says Saudi Arabia has opportunities for growth

Saudi Arabia is an important market that is “growing and promising” and opens up large-scale banking opportunities for the region and the world, a banking official said on Wednesday.
“The Saudi-UK business, trade and investment partnership is very strong and historic,” Mazen Fahad Al-Bunyan, CEO of Standard Chartered Saudi Arabia, told Arab News on the sidelines of a UK roadshow that coincided with the launch of the British-based multinational bank’s Q1 results on Wednesday. “The trade corridor is very strong. It has recorded SR15.3 billion last year and that was a 47-percent growth that excludes foreign direct investment, which was SR5.1 billion, give or take, which is significant and important for the two countries, and we’d like to play a role in that as well.”

Standard Chartered has been operating in the Kingdom since 2011 through its capital markets license, and has already set up similar licenses in the UAE and is looking to do the same in Egypt by the end of the year. It is already present in 18 markets in the Middle East and North Africa region and Al-Bunyan says the company has a “very clear strategy” for the region.

“We’re not foreign to the market,” he said. “In fact, it’s a very important market for us. We continue to invest in localizing our coverage and bringing teams on the ground, bringing capabilities on the ground, investing in digital systems and bringing our best-in-class expertise, whether it’s people or innovative products,” he added.

The consumer, corporate and institutional banking, and treasury services company reported a very strong first quarter in which profits jumped 21 percent, beating expectations, as rising interest rates buoyed income from its cash management and retail banking businesses.

Profits in Africa and the Middle East increased by 9 percent but were up 31 percent on a constant currency basis, as income increased 26 percent with strong growth in cash management and retail deposit income, the report said.

“This was partly offset by expenses increasing 14 percent on a constant currency basis reflecting inflationary pressures in the region. Impairment charges were a net release of $26 million, an $18 million reduction on the prior year,” it added.

“We have achieved by far the highest quarterly results since 2014 for the bank as a whole, we remain very liquid and our asset quality is diversified and we are on track to achieve our 2024 targets,” Al-Bunyan said.

“Our 2024 target is to achieve a return on tangible equity of 14 percent, but looping it into Saudi, we are looking to further enhance our business and operation in the Kingdom, bringing our capabilities on the ground to tie in with our global clients and local clients as well, and to help work on achieving and supporting delivery of Saudi Vision 2030.”

He added that even during crises including the COVID-19 pandemic, the company still continued to perform well and claimed that the bank does not face any challenges, “only more opportunities.”

He continued: “Other things that Standard Chartered is doing in Saudi include developing local talent, engaging with key stakeholders within the country, and we have also launched a ‘Women in Tech’ program that is focused on supporting (female digital entrepreneurs). This is a very rich program, and it’s been very rewarding as well.”

Female participation in the Saudi labor market is at its highest ever, at 37 percent of the market, he added.

He also highlighted some youth initiatives — important since 70 percent of the Saudi population is below the age of 30. “Our talent mix on the ground is very youthful,” he said.

Standard Chartered has a global community initiative called Future Makers that is focused on youth. The company has already introduced the program — which focuses on education, employability and entrepreneurship — into Saudi Arabia, the UAE and Bahrain, and is looking to set it up in Egypt as well, Al-Bunyan said.

“It provides (youth) with the required skills (to enter) employment and function in the future,” he added.

Standard Chartered is also committed to delivering on the Saudi Green Initiative and the Middle East Green Initiative that were launched by Saudi Crown Prince Mohammed bin Salman in 2021, Al-Bunyan said.

“The initiative was very comprehensive and it could be a blueprint for other regions to adopt. As a region, they have shown they are serious about delivering on these targets,” he added.

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