Dubai: Standard Chartered expects profitability of the bank’s UAE operations to improve along with the revival in the economy and the bank will continue to invest in its operations in the country, José Viñals, chairman of the Standard Chartered Group told Gulf News in an interview.
“We are fully committed to the UAE. We started here 61 year ago. We expect to be here several multiples of the years we have already been here. What we meant by singling out the UAE along with India, Indonesia and South Korea is that these are markets that are with tremendous potential,” said Viñals.
Following the announcement of the annual results for 2018, Standard Chartered said it aimed to improve returns in India, South Korea, the UAE and Indonesia, four large markets that have been a drag on its financials, accounting for 21 per cent of costs but just 13 per cent of profit. The announcement triggered speculation that the banking group is looking at restructuring or even sale of some of its businesses in these countries.
Viñals ruled out selling any of those four businesses. “We need to make sure that we have to work harder in these markets to be able to realise the true potential. What we have done is just identifying these markets as target areas for greater efforts to realise their true potential. The exercise in no way means we are planning an exit from these markets,” he said.
In Africa & Middle East the bank is present in 25 markets, of which the most sizeable by income are the UAE, Nigeria and Kenya. In the UAE the bank reported an operating income of Dh637 million in 2018 compared to Dh733 million in the previous year. The UAE reported an operating loss of Dh12 million compared to a profit of Dh115 million in 2017, largely resulting from credit impairments of Dh196 million last year.
In recent years, the decline in oil prices and the regional geopolitical events had some impact on the UAE’s economic growth. “Now we have a situation the oil prices are recovering, and the non-oil sectors are growing faster. Our internal forecasts show the UAE which grew less than 3 per cent in 2018 is projected to grow by about 3.5 per cent this should reflect on our performance too,” said Viñals.
The bank sees great synergies in its Asia and Africa businesses with the UAE as it sits in the middle between Asia and Africa. “We are strong in Asia and Africa. The UAE sits in the middle of these two important financial and trade corridors. We do a lot of business here that connects Asia with Africa and the Middle East,” Viñals said.
José Viñals was appointed chairman of the Standard Chartered Group in October 2016 and became Group Chairman in December 2016.
Viñals has substantive experience in the international banking regulatory arena and has exceptional understanding of the economic and political dynamics of the markets and of global trade. Viñals began his career as an economist and as a member of the faculty at Stanford University, before spending 25 years at the Central Bank of Spain, where he rose to be the Deputy Governor. José has held many other board and advisory positions including Chair of Spain’s Deposit Guarantee Fund, Chair of the International Relations Committee at the European Central Bank, member of the Economic and Financial Committee of the European Union, and Chair of the Working Group on Institutional Investors at the Bank for International Settlements. He joined the International Monetary Fund (IMF) in 2009 and stepped down in September 2016 to join Standard Chartered PLC.