Standard Chartered - History - 2000 To 2010

2000 To 2010

In 2000, Standard Chartered acquired Grindlays Bank from ANZ, increasing its presence in private banking and further expanding its operations in India and Pakistan. Standard Chartered retained Grindlays' private banking operations in London and Luxembourg, as well as the subsidiary in Jersey, all of which were integrated into its own private bank. This now serves high net worth customers in Hong Kong, Dubai, and Johannesburg under the name Standard Chartered Grindlays Offshore Financial Services.

In India, Standard Chartered integrated most of Grindlays' operations, becoming the largest foreign bank in that country. Ethics issues and financial losses triggered turmoil; the bank went through three CEOs in three years: Malcolm Williamson was replaced in 1998 by Rana Talwar, who was unseated by Mervyn Davies in 2001. By the time Davies took over, his predecessors had systematically sold off the bank’s holdings in continental Europe and the Americas. Former CEO Talwar has claimed Standard Chartered's troubles over the years is due to its failure to hire local talent. The Indian-born Citigroup Inc. veteran became the bank's first non-British CEO when he was appointed in 1998.

Leading to the incorporation of Standard Chartered (Hong Kong) on 1 July 2004, the Legislative Council of Hong Kong amended Legal Tender Notes Issue Ordinance. The amendment replaced Standard Chartered Bank with its newly incorporated subsidiary - Standard Chartered Bank (Hong Kong) Ltd - as one of the note-issuing banks in Hong Kong. The same year, Standard Chartered Bank and Astra International (an Indonesian conglomerate, a subsidiary of Jardine Matheson Group) took over PermataBank and in 2006, both shareholders increased their joint ownership to 89.01%. With 276 branches and 549 ATMs in 55 cities throughout Indonesia, PermataBank has the second largest branch network in Standard Chartered organization.

On 15 April 2005, the bank acquired Korea First Bank, beating HSBC in the bid. The bank has since rebranded the branches as SC First Bank. Standard Chartered completed the integration of its Bangkok branch and Standard Chartered Nakornthon Bank in October, renaming the new entity Standard Chartered Bank (Thailand). Standard Chartered also formed strategic alliances with Fleming Family & Partners to expand private wealth management in Asia and the Middle East, and acquired stakes in ACB Vietnam, Travelex, American Express Bank (Bangladesh) and Bohai Bank (China). The largest shareholder, Khoo Teck Puat, died in 2004; and two years later, on 28 March 2006, the Singapore state-owned private investment firm, Temasek, became the bank's largest shareholder, when it bought the 11.55% stake held by the estate of billionaire Khoo Teck Puat.

On 9 August 2006, Standard Chartered announced it had acquired an 81% shareholding in the Union Bank of Pakistan in a deal ultimately worth $511 million. This deal represented the first acquisition by a foreign firm of a Pakistani bank and the merged bank, Standard Chartered Bank (Pakistan), is now Pakistan's sixth largest bank. On 22 October 2006, Standard Chartered announced that it had received tenders for more than 51% of the issued share capital of Hsinchu International Bank (“Hsinchu”), established in 1948 in Hsinchu, Taiwan. Standard Chartered, which had first entered Taiwan in 1985, acquired majority ownership of the bank. Prior to the merger, Hsinchu was Taiwan's seventh largest private sector bank by loans and deposits as of 30 June 2006, but had suffered extensive losses on defaulted credit card debt. Standard Chartered merged its existing three branches with Hsinchu's 83 branches, and delisted Hsinchu International Bank, changing the bank's name to Standard Chartered Bank (Taiwan) Limited; Standard Chartered is the largest foreign bank in Taiwan in terms of branch network. In 2007, Standard Chartered opened its Private Banking global headquarters in Singapore.

On 23 August 2007, Standard Chartered entered into an agreement to buy a 49% share of an Indian brokerage firm (UTI Securities) for $36 million in cash from Securities Trading Corporation of India Ltd., with the option to raise its stake to 75% in 2008, and, if both partners were in agreement, to 100% by 2010. UTI Securities offers brokering, wealth management and investment banking services across 60 Indian cities. On 29 February 2008, Standard Chartered PLC announced it had received all the required approvals leading to the completion of its acquisition of American Express Bank Ltd (AEB) from the American Express Company (AXP). The total cash consideration for the acquisition is US$823 million.

On 13 November 2008, Standard Chartered Bank (Hong Kong) Limited, entered into an agreement to acquire 100% of Cazenove Asia Limited, a leading Asian equity capital markets, corporate finance and institutional brokerage business, from JPMorgan Cazenove.

On 27 November 2009, Dow Jones Financial News reported that Dubai will restructure its largest corporate entity. Among international banks, Standard Chartered has one of the largest loan portfolios in the Dubai market and the UAE as a whole, estimated to be $7.77 billion in total. This amounts to 4.2% of Standard Chartered's total loans outstanding. Other impacted banks included HSBC, Barclays, and RBS. The bank stated that any impairment arising from this exposure would not be material.