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Regular-article-logo Wednesday, 16 July 2025

StanChart prop for India Inc

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OUR SPECIAL CORRESPONDENT Published 03.10.06, 12:00 AM

New Delhi, Oct. 3: Standard Chartered Bank may bring out equity-linked and credit-linked notes to fund India Inc’s capital expansion plans and mergers and acquisitions.

“We are planning to bring out equity-linked and credit-linked notes,” StanChart CEO (wholesale bank) and director Michael Rees said.

The equity-linked and credit-linked products will give companies more options to raise funds and the notes will help them manage their foreign exchange requirements.

Standard Chartered, which has been buying banks in Asia, however, feels constrained by Indian regulations against acquisitions by foreign banks. “It (consolidation) is a phenomenon happening worldwide. I don’t see India being anything different ... but we are constrained by Reserve Bank of India regulations at the moment,” Rees said.

Standard Chartered’s wholesale banking division deals with cash management for global and Indian companies, loan syndications, mergers and acquisitions.

The bank was involved in deals such as Tata Steel buying Singapore’s NatSteel and a stake in Thailand’s Millennium Steel, and Malaysia’s Maxis buying a stake in Indian mobile operator Aircel. Standard Chartered has identified auto, pharma, metal and mining as sectors that will lead the way in mergers and acquisitions in India in the years ahead.

The London-based bank sees a strong revenue growth from its wholesale operations in India. The division had revenues of $240 million in 2005 from Indian operations, and the management is aiming for a $1-billion turnover over the next five years.

Bala Swaminathan, regional head of client relationships in India and South Asia, said, “I expect a 25-30 per cent rise in revenues over the next three to five years. We are likely to garner a revenue of $325 million in 2006 from wholesale banking.”

However, sources said Standard Chartered Bank may exit its $3-billion asset management business in India as part of a recast of operations here.

The recast is aimed at consolidating its position as the largest international bank in India, which is also Standard Chartered’s third largest overseas market.

The British bank has in the past exited the domestic automobile finance as the cost to revenue graph was not satisfactory. The bank plans to focus on consumer and wholesale banking, including hedging and risk-management products, project finance, commercial real estate, cash management and trade finance, officials said.

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