LIM Cheng Teck, a 23-year veteran at Standard Chartered Bank, is the man at the helm of the London-based bank's operations in China. His job is to stay ahead of the curve as China's financial industry evolves alongside the country's rising economic clout. Lim, a Singaporean with family origins in China's Fujian Province, was appointed chief executive officer and executive vice chairman of Standard Chartered Bank (China) Ltd in September 2009. The bank is among the most ambitious of overseas lenders operating in the world's second-largest economy.

Standard Chartered, which makes 90 percent of its revenue and profits from emerging markets, has been in China since 1858. The bank stepped up its footing in China in April 2007 as one of the first four overseas banks to set up local incorporated subsidiaries in Shanghai. Its ambition is to offer full-service banking to corporate and retail customers.

Standard Chartered is the third-largest overseas bank in China in terms of number of outlets, following HSBC and Bank of East Asia. Its network comprises 69 branches, including one rural bank.

Shanghai Daily spoke with Lim in his office at the Standard Chartered Bank Tower amid the hustle and bustle of the Lujiazui area, the financial heart of China, in Shanghai's Pudong.

During the exclusive one-hour interview, Lim shared his views on the bank's strategy for dealing with China's rapidly changing financial landscape, its plans to get listed when China's long-anticipated international equity board begins operation and its efforts to recruit professional talent in a highly competitive market.

Q: Why are you planning to list on the coming international board in Shanghai?

A: If you look at us as an overseas bank based in London, we are now listed in three key markets - Hong Kong, London and India (Mumbai). We're very keen to get listed in Shanghai for a number of reasons: It is an important and key market, one of the oldest in our global network. More importantly, it reinforces our commitment to support and contribute to the development of Shanghai as an international financial center.

I will go deeper to look at our motivation. We're well capitalized. So it's not for liquidity's sake. We are not looking for additional capital. What we want to do is to show our commitment to China as a very important market for our group. We have been in China since 1858. We incorporated locally in 2007. The potential Shanghai listing is to build our brand and profile in the market.



Q: At what stage are you in the listing preparations? Is it just at the stage of expressing interest or are you actually preparing all the documentations?

A: We have been preparing for the listing for quite a while. The key thing doesn't really depend on us as market participants, but it's really down to the regulations. At the moment, the regulations covering the international board have still not been issued. Subject to approval by the authorities, we are keen to be among the first international companies to go public in Shanghai.



Q: What size listing are you planning?

A: The listing will not happen until the Chinese authorities are satisfied with the right framework being in place. They will provide guidance on conditions and requirements, including size of listings.



Q: China is encouraging qualified locally incorporated overseas banks to issue yuan-backed bonds in Shanghai. Does Standard Chartered have plans to issue such debt?

A: Our move to tap the yuan bond market depends on a few factors. First of all, we will need to look at our own liquidity situation. At the moment, our loan-to-deposit ratio is below 75 percent and meets the CBRC requirements. So we don't need to raise money for liquidity reason. We can expand our deposit base. Another factor is the cost of issuing debt. If it's cheaper than acquiring deposits, then it makes economic sense.



Q: So, you don't have any immediate plans to issue yuan bonds?

A: While we do not have an immediate need to do that, we always look at market conditions. If the economics are favorable, then, of course, that is something we will consider. Importantly, there is also an element of helping deepen the bond market in Shanghai. And that is something that we always want to see happen and contribute to.



Q: A China Banking Regulatory Commission survey found that locally incorporated overseas banks are forecasting slower economic growth this year as China's monetary policy tightens. How would that affect your bank?

A: If we look at the first quarter of this year, we've been growing our business broadly, across different product and segments. We are still enjoying good growth compared with last year.



Q: Standard Chartered China reported that revenue in China last year grew 23 percent to 4.5 billion yuan, though net profit dropped 9 percent to 384 million yuan on higher tax costs. Did 2010 live up to your expectations?

A: We're happy with our 2010 performance. It showed very good growth. We need to look back at prior years to put the figures in context. Overseas banks' combined market share actually went down in 2009 as domestic banks expanded credit rapidly amid China's 4 trillion yuan stimulus package. Last year was the start of normalization in the industry. On balance, we are very happy with our performance.



Q: Yes, you managed to keep the loans-to-deposits ratio under 75 percent, a year ahead of the regulatory schedule.

A: We have a very conservative balance sheet management approach. It's our philosophy. We want to grow our deposits first before we expand our loans.



Q: Aren't you under pressure to break even in your retail banking business in China? As we know, corporate banking is still the major cash cow for all overseas banks in China. What's your timetable to break even in the retail banking arm?

A: In running any business, of course, you want to break even as soon as possible. But you need to put that, too, in a proper context. Wholesale banking has a much longer history than retail banking for overseas banks in China. We take a long-term view in building our business. We are very keen in investing to build our franchise. So we will open as many branches as the regulators allow us. Today we have 69 total outlets in 18 cities, and we have ambitions to open in more cities, particularly those in central and west China. We will balance profitability target with investments in building out network.



Q: Why central and west China?

A: These are big and growing markets. Our clients are also shifting their manufacturing activities inland. We are following our clients and also the government's call for greater economic development in these areas. We also see growing urbanization as China's economy keeps expanding at a rapid pace. That will trigger consumption and more need for financial services. We are a growing business in a growing economy.



Q: How many new staff do you plan to hire this year to support your growth strategy?

A: We now have more than 5,000 people in China. Going forward, as we open outlets in more cities, we will hire more people. We've been looking at the same pace of growth in terms of new hiring as last year.



Q: It seems the ability of overseas banks to attract talented professionals waned after the global financial crisis. We see more and more professionals being grabbed by domestic banks as they mature. How does Standard Chartered compete for professionals?

A: Competition is intense. However, that is the nature of a market that is opening up and growing rapidly. It is not uncommon to see that happen. We experienced the same thing in the Hong Kong market in the 1990s.

When we're recruiting, we are looking for people who want to build a career within the bank. We encourage our people to see that as a long-term, exciting journey. I've been with the bank for 23 years. Over those years, I have been given new challenges and opportunities. That always continues to develop and stretch me, both as a person and as a banker. This is what we promise our staff.