Standard Chartered has unveiled trustee services in Hong Kong and Malaysia and intends to do the same in Singapore, as part of its drive to win more custody business from mutual-fund companies.
George Nast, Singapore-based global head of product management for transaction banking, says: “We’re still bullish on Asia’s mutual-fund business. The long-term trends still hold true, such as Asia’s high savings rate that needs to be invested. Global fund managers continue to set up in the region while local players are going cross-border.”
StanChart has been upgrading its IT with a bigger budget for the past few years to compete with its local and global custody offerings. Nast says a trustee capability was the missing ingredient. Until now, the bank offered this only in Korea via its arm, Standard Chartered First Bank.
Nast says Asian fund companies looking either to expand business outside of their home market, or to provide international exposures to domestic clients, will require such support, alongside custody and fund administration.
He cites Thailand as one example where domestic fund managers are increasingly active in building overseas exposures for local investors.
StanChart now offers fund administration in 12 Asian markets and is looking to expand that to the Middle East and Africa, as well as to frontier Asian countries, particularly where the bank has a funds distribution business as well.
But that is a medium-term objective; for 2013, the aim is to commercialise the bank’s investments and win custody business from mutual funds engaged in cross-border activity in Asia.
The move to open trustee services in Hong Kong and Singapore is actually a resumption of a previous service offering. In the 1990s, StanChart was a trustee in those markets, but divested the business to Bank of Bermuda. What seemed at the time like a smart outsourcing turned sour when Bank of Bermuda was subsequently acquired by rival HSBC.
David Gilmour, managing director of transaction banking, says the bank has a live trustee client in Malaysia and will go live with one in Hong Kong soon. He declined to name the fund houses.