Stanchart says Dubai is its spring board for Mideast
Sir John Peace, chairman of Standard Chartered PLC, was in Dubai last week to attend the bank’s global board meeting. Ahead of the board meeting, Sir John met with His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. In this high level meeting, he apprised Shaikh Mohammad of the bank’s plans for the region. In an exclusive interview with Gulf News, Sir John spoke about the bank’s global and regional strategic direction, investment plans in the UAE and the challenges and opportunities in the post-crisis global economy.
Gulf News: You met Shaikh Mohammad during this visit. What were some of the topics discussed and what was the key message you delivered to him and to the UAE leadership?
Sir John Peace: It was a great opportunity for me to have met Shaikh Mohammad and let the government know that this is a very important market for Standard Chartered, a market that we have been in for a very long time. It was a very important meeting for us to make him aware of our commitment to the UAE and we continue to invest here. Indeed, I came here for the board meeting and to visit our new regional headquarter building. We expect it to be ready early next year. He made me feel very welcome and was very supportive of what we are trying to do as a bank. I explained to him that as a bank, we are almost unique in terms of the importance we give to some of the emerging markets across Asia, Africa and the Middle East and the network we have is very important for the UAE as it expands its business relationships with some of these markets.
What is the significance of the new regional headquarters and its importance and meaning for the bank regionally and globally?
I will break it (the answer) into two parts. The UAE itself is a very important market for us, but it is also a regional centre. If you look at the strategic importance of Dubai and the UAE, I was explaining to His Highness that the opportunity is for the country. The hub we are developing here is not just impor- tant for Standard Chartered; it is a big opportunity for the UAE. When you consider the fact that Africa is going to grow, it is going to be an important market. Europe is continuing to be in turmoil. As you can see, the trading that is being developed across the world with the UAE as a hub, Standard Chartered is in a great position to support that activity and of course, our operations in Dubai are a key part of that. For example, our trading room in Dubai nearly 200 people. It is pretty significant.
Does this mean Dubai is emerging as one of your key global hubs like Singapore or Hong Kong?
Singapore is a very important hub for us in Asia. I think we could see Dubai in the same league as a hub which provides a spring board into some very important markets. During our meetings in Dubai this week, one of the things we focused is Islamic banking which is an important part of our business. I wanted our board to understand what the new opportunities are.
Moving on to a broader subject, going by the recent developments in the world of banking, is the global financial services industry headed into an era of over regulation and lack of innovation?
Following the banking crisis or the financial crisis which started in 200708, everyone’s concern is how to prevent what happened, if they can, from recurring in the future. So, strengthening regulation and making it more effective is an important part of governments’ efforts. And the financial services industry has indeed been going through these changes in the last three to five years now. However, there needs to be some balance between regulatory efforts and the way we fund businesses. For example, we almost hold twice as much capital today compared to what we did in 2006-07. That makes us safer; we have stronger balance sheets. But at the same time, it is important that the banks and financial institutions can continue to lend particularly to smaller business. So, there has to be a balance to be achieved between safer and effective regulation and the necessity for lending to not just big corporates but also to small and medium enterprises (SMEs).