KUALA LUMPUR: Malaysia is a key market for London-headquartered banking group Standard Chartered (StanChart) plc and has an important role to play in the lender’s overall Asian growth strategy.

       Chief executive officer (CEO) for Asia, Benjamin Hung, said after Singapore, Hong Kong, China and India, which remained the group’s largest Asian revenue contributors, Malaysia alongside Taiwan were the “next batch” of countries that generated most revenue within the region.

       “These are in the range of half a billion US dollars (RM2.2bil) each in annual revenue, so (they) are by no means small,” he told StarBiz in an exclusive interview here.

       The Hong Kong-born Hung, who was appointed the lender’s Asia CEO in 2021, is currently on a six-week working trip which includes a stop in Malaysia where the bank has had a long-standing presence.

       He said within Asia, Asean was an extremely important block, which he was “very positive” on. “Asean is a very big and emerging consumption engine by itself and within Asean, Malaysia is one of the core pillars.

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       “I would name Singapore, Malaysia, Indonesia, Vietnam and Thailand as the core drivers, you have the others also, but these are the ones that really shape the forward-looking agenda,” he said.

       Prior to his Malaysian visit, Hung was in Singapore where he said that the banking group would invest some S$1bil (RM3.19bil) over the next five years in the city-state.

       While there are no similar investment figures for Malaysia at the moment, Hung believes that Malaysia has the potential to grow.

       “I do think that Malaysia has the potential to grow. The last two years have been difficult, to be honest, for a lot of markets in Asia due to Covid-19.

       “Covid has knocked growth off, but I can sense that right now, Malaysia is emerging quite nicely out of Covid and geopolitically, it is not in any crossfire, and it is resource-rich,” Hung said.

       He noted that sectors in the country which had growth potential included solar, tourism, healthcare and electric vehicle components.

       “China is the biggest trading partner for Malaysia and there are a lot of significant opportunities for incoming investments into Malaysia.

       “Interestingly, Europe and US are also very keen to leverage on Asean and for that matter, Malaysia,” said Hung.

       According to him, as the only international bank with a network spread across all ten Asean countries, StanChart had a competitive advantage over its peers in facilitating cross-border transactions and businesses.

       He is confident that the lender will not be exiting any markets within the Asean region, even if not all are impactful to the lender’s bottomline.

       “Some are more impactful than others, some are naturally smaller but collectively, they are a proposition to support and serve multinationals which want to come to Asean...as a Pan Asian network, we are second to none, I think that is very relevant.

       Asked if there would be any form of scaling back within this region should cost or relevancy become an issue, Hung said Asia is a growth engine and as a whole, a “very return-accretive region”.

       “About 70% (revenue and profits) of the bank are from Asia so if you don’t grow from Asia, you wont be able to deliver growth.

       “If you think about the size, the critical mass, then Asia has it, so definitely the group is keen to extract growth and economically, the world’s growth is coming from Asia.”

       That said, Hung added: “It doesn’t mean that we won’t optimise areas that are less relevant or not as productive so, I would never say never...,”

       Meanwhile, he noted that inflation remained a challenge amid growth coming back globally.

       “In the US, I think between inflation and growth, I see the central bank tilting the bias towards addressing the inflation side, which may mean that growth will have to give way.

       “Therefore the world may have to go through a period of delayed growth impact.”

       Still, Hung believes that while inflation remains high in US and Europe, it is generally still manageable in Asia.

       “Hence, real growth will be more apparent in Asia than it will be in the West, in fact, more than half of the world’s growth will come from Asia...,” Hung said.

       Like most lenders, he expects StanChart to benefit from rising interest rates, notwithstanding inflationary pressure.

       “When interest rates start to rise, this will benefit banks with strong balance sheets, so we should be a positive beneficiary and Malaysia will be a part of it alongside other markets.

       On the area of sustainability and Environmental, Social, and Corporate Governance which are becoming more than just buzzwords these days, Hung said these were areas in which Asia offered “a huge amount” of opportunities.

       “However it’s very nascent, the standards are not totally aligned but I think this is one area that we can be a big engine of change to support clients.

       “Sustainability is one issue, global wealth gap is another.

       “We have to find ways to narrow the wealth gap this because if this continues, we are going to have all sorts of social challenges,” Hung said.

       As a bank, StanChart operates in 50-odd markets with most of them being emerging markets, he said.

       As a means to help those less privileged, efficient and cheaper financing can be extended, Hung said.

       “I do think banks are not just about making money, that’s never been my ethos, of course we are a commercial entity but in doing our business, I do think there is a role for us to play in addressing what we believe are world problems.

       “These are what we believe as a bank we should be doing because otherwise, we are just another financial institution trying to make money.

       “We have to believe that there is a role we can play, we won’t be the solution for everyone but we have to play a part.”