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A different kind of bank
In the past few years, banks have been put on the spot, and for good reason. The public have lost faith in institutions that fail to act in the interest of their customers. In this context, the very public debate about the future of the banking system came as no surprise to us.

We continue to be respected in our markets for standing by our customers and clients, and for upholding high standards of corporate governance and social responsibility. And we have been doing well. For the last nine years we have delivered record income and profits.

As a Bank with a conservative approach to capital funding and liquidity management and a stringent risk management framework, it is important for us to differentiate ourselves. Our values and commitment to the communities where we live and work sets us apart.

We believe that our ability to create sustained value for our shareholders is linked intrinsically to the health and prosperity of the communities in which we operate. As a bank, we seek to deploy our core banking skills, strong environmental and governance standards and community investment initiatives to have a positive impact on societies at the same time as creating business value. We take this opportunity seriously and it is captured in our brand promise ‘Here for good’.

To contribute to the wider debate around the social usefulness of banks, in 2010 we commissioned an independent study to understand our social and economic impact in Ghana. When we undertook the study, we knew that we were opening ourselves up to external critique and that the findings might not all be positive, but we saw it as an important and much needed exercise in order to illustrate the positive impact we have on economies.

The report reflected many things we knew already, such as the fact that international banks add value to economies in ways that go far beyond the provision of credit. We support Ghana’s economy by using our global footprint to enable trade and investment flows, by helping our clients to reach international environmental and social standards, by spurring innovation through the launch of new products, by improving access to finance and by providing world class employment opportunities and training.

The key findings of the study focused on the ripple effect on jobs and the economy that we create through our core business as a bank. In 2009, our operations and onshore financing in Ghana generated USD 400 million of value-added in the nation’s economy, equivalent to 2.6 per cent of gross domestic product.

We have a significant impact on employment in Ghana. We employ about 800 people in the country, but our operations generate a total of 15,400 jobs when the indirect employment effects are taken into account. In the same way, our clients employ 30,500 people directly as a result of our financing, but a total of 140,300 jobs are created when indirect effects of the financing are included. Relative to Ghana’s workforce, the total impact of our business – almost 156,000 jobs – amounted to 1.5 per cent in 2009.
The findings from the Ghana report demonstrate that our approach is having a positive impact. We continue to incorporate these into our overall approach to building a sustainable business.

For more information, see the links to the following studies:
The Social and Economic Impact of Standard Chartered: Ghana
(http://www.standardchartered.com/sustainability/news/20101014/en/index.html)

Comments
Paul Nyambe - 3/31/2012 11:34:36 AM
Re: Modern Banks Need To Be Adaptive and Inclusive
I agree with you Mark on what you have just indicated especially on Zambia, in your reply comment to my earlier comment. And I also acknowledge this indirect kind of approach that most old big banks including Standard Chartered usually employ to reach out to MSMEs. And here I mean the mostly marginalised very micro, small and medium enterprises. It is also common knowledge that these banks prefer this indirect approach as a risk mitigatory factor. And this in itself is a good idea. However, I am still of the view that in as much as banks need to maintain their risk safeguards. Modern day banks including Stanchart need to be more innovative, adaptive and inclusive to truly be relevant especially to the mostly marginalised MSMEs client base including youth entrepreneurs and also the communities they operate in. For instance, banks can further enhance this indirect approach in dealing with MSMEs by bringing into play the more-MSMEs-representative-structures especially entrepreneur/business associations like our new Youth Entrepreneurs Network of Zambia. With whom they can creatively engage with either directly or indirectly through other preferred BDS providers, as platforms that groom prospective MSMEs member clients in relevant business and financial management aspects prior to accessing the banks' tailored financial products and services. By so doing, the banks will in effect be broadening their market scope while at the same time reducing their risk burden. The other approach that banks can use to cope with the changing markets is of-course to be more creative and deliberately create products that makes it easy for MSMEs to directly access. And the issue of prohibitive collateral requirements especially, is one that needs to be creatively dealt with in doing this. As a matter of fact, the logical expectation from such smart approaches on the banks' side is definitely a broadened and sustainable market share through this creatively expanded client base, as opposed to self-limiting own growth potential. By the way, which bank wouldn't be pleased with this kind of business growth and impact to the communities they operate in? Caution! This is not an academic concept but a logical and real world thinking line suitable for a real world application.

Mark Devadason (Group Head of Sustainability and Regions, Standard Chartered) - 3/30/2012 10:06:23 AM
Re: Modern Banks Need To Be Adaptive and Inclusive
Paul,
I agree that Small and Medium Enterprises (SMEs) form the backbone of many of the economies where Standard Chartered operates. It is also an area where we continue to make a great impact. Since the start of the financial crisis in 2007, we've increased the amount of credit provided to small and medium enterprises by 60 per cent to USD19.2 billion. Last year we partnered with PwC to provide financial management training to 131 African SMEs in Ghana, Nigeria and Zambia and we look to do more this year.
We currently support 47 microfinance partners in 16 countries with a portfolio of USD220 million, by helping them access capital markets and, in the long-term, integrate into the formal financial sector. This means they can lend more money to more individuals.
The projects we're financing are also directly helping small scale farmers secure and grow their business, particularly in Zambia. Last year, we renewed a partnership with the Zambian Government's Food Reserve Agency which benefitted as many as 750,000 small-holder farmers.
Yes we have a conservative approach to banking, but that does not mean we're old fashioned. We release our 2011 Annual Report and Sustainability Review on the 23 March, where you can read more about our innovative approach to banking. You'll be able to access the reports at www.standardchartered.com.

Ian Dalton - 3/14/2012 4:37:26 PM
Preserving value and jobs through debt restructuring
This article and the report more generally present interesting findings on the impact of Standard Chartered's lending activities in terms of value-added and jobs created. Perhaps just as relevant, or even more so, is the specific impact that Standard Chartered has in cases of distressed but viable client businesses: to what extent does the bank engage in debt restructuring with these clients (either in or out of court) and has this impact been measured in terms of value-saved and/or jobs preserved? When debts are restructured and businesses are rescued, what percentage of employees is retained? These results, I imagine, would have particular appeal in the current commercial environment.

Paul Nyambe - 3/9/2012 8:31:42 AM
Modern Banks Need To Be Adaptive and Inclusive.
What a reflective article by Mark Devadason. It is clear though to note from this article that his bank and many other banks have not really done much to adapt to the changing market dynamics. Banks need to understand that we are in a totally different global economy. These banks and there traditional style were of-course broadly relevant in the old industrial economy. But let us face the facts, we are in a new entrepreneurial economy where the global economy thrives largely on the enterprising of its individual citizens. What do I mean? Banks shall in this age be more relevant and have a much broader and sustainable impact in the respective markets they operate in, if they put significant emphasis in the micro enterprising activities of the respective economies rather continuing with their traditional business banking models of ever nourishing the large and established corporations. Of-course their fears in dealing with micro clients are justifiable but if they don't begin to embrace and create innovative and appropriate products and services for traditionally-marginalized clients including youth entrepreneurs who are the promise for tomorrow's corporations and multinationals, they will be limiting their own market and business scope because there may be less or no corporations to do business as we move on. So, banks have got a big role to play in this entrepreneurial economy. And those that shall move with time and be more innovative, adaptive and inclusive especially in their business banking services shall attract an even large market share. I feel banks are currently limiting themselves especially here in Africa and Zambia in particular where the said standard chartered bank is predominantly focused on large corporation business banking services.