StanChart Thailand eyes to reduce risk

Stanchart targets US$1 billion worth of secured loans in 2012 by shifting its strategy.

Standard Chartered Bank (Thai) is shifting to focus more on expanding its secured lending business in order to balance its revenue to reduce risk, says Vikram Issar, senior executive vice-president for consumer banking, as cited in a report in Bangkok Post.

It aims to lift the proportion of secured loans to 70 percent of total lending (secured and non-secured), targeted at US$1 billion in 2012, from 50 percent currently.

Its 70 percent secured loan proportion is expected to be divided into 25 percent wealth management, 10 percent SMEs and the rest other secured businesses.

Mr Issar said Standard Chartered's global balanced portfolio mix puts considerable weight on secured loans at 80 percent, against 20 percent unsecured loans, which is used by its branches worldwide including India, the Middle East and Indonesia.

The shift in proportion will help to reduce portfolio risk but Mr Issar said the bank would still be able to maintain its revenue structure with 60 percent generated from unsecured loans, as well as maintain its net interest margin.

He said this was because the overall market was expected to become larger in the future based on the growth of three businesses on which it will focus: mortgages, SMEs and wealth management.