Introduction of Standard Chartered Bank

History
Standard Chartered was formed in 1969 through a merger of two banks: The
Standard Bank of British South Africa, founded in 1863, and the Chartered Bank
of India, Australia and China, founded in 1853.

Both companies were keen to capitalise on the huge expansion of trade and to
earn the handsome profits to be made from financing the movement of goods
between Europe, Asia and Africa.

The Chartered Bank

 Founded by James Wilson following the grant of a Royal Charter by Queen
Victoria in 1853.
 Chartered opened its first branches in Mumbai (Bombay), Kolkata and
Shanghai in 1858, followed by Hong Kong and Singapore in 1859.
 Traditional trade was in cotton from Mumbai (Bombay), indigo and tea from
Kolkata, rice from Burma, sugar from Java, tobacco from Sumatra, hemp from
Manila and silk from Yokohama.
 Played a major role in the development of trade with the East which followed
the opening of the Suez Canal in 1869 and the extension of the telegraph to China
in 1871.
 In 1957 Chartered Bank bought the Eastern Bank together with the Ionian
Bank's Cyprus Branches. This established a presence in the Gulf.

The Standard Bank

 Founded in the Cape Province of South Africa in 1862 by John Paterson.
Commenced business in Port Elizabeth, in January 1863.
 Was prominent in financing the development of the diamond fields of
Kimberley from 1867 and later extended its network further north to the new
town of Johannesburg when gold was discovered there in 1885.
 Expanded in Southern, Central and Eastern Africa and, by 1953, had 600
offices.
 In 1965, it merged with the Bank of West Africa, expanding its operations into
Cameroon, Gambia, Ghana, Nigeria and Sierra Leone.
From the early 1990s, Standard Chartered has focused on developing its strong
franchises in Asia, Africa and the Middle East. It has concentrated on consumer,
corporate and institutional banking and on the provision of treasury services -
areas in which the Group had particular strength and expertise.

Since 2000 the Bank has achieved several milestones with a number of strategic
alliances and acquisitions, which have extended the customer and geographic
reach and broadened the product range that Standard Chartered offers.

Standard Chartered In Pakistan:

Standard Chartered is the largest and fastest growing International Bank in
Pakistan. The Bank has been operating in Pakistan since 1863 when it first
established its operations in Karachi. Standard Chartered now employees over
4,000 people and has a branch network of 162 branches across 41 cities in the
country. Standard Chartered’s core businesses in Pakistan are in Consumer Banking
and Wholesale Banking.
Standard Chartered Pakistan is the first international bank to get an Islamic
Banking license and to open the first Islamic Banking branch in Pakistan and has
been given credit ratings of AAA/ A1+, the highest long-term rating assigned by
PACRA to any private sector commercial bank.
The Bank’s efforts have been recognised by independent and credible authorities;
we won "Best Foreign Commercial Bank in Pakistan" award by FinanceAsia; "Best
International Trade Bank in Pakistan 2009" by Trade Finance Magazine, a
publication of Euromoney; "Best Foreign Exchange Provider" Award from the Global
Finance Magazine for 2010; Triple A awards for the 'Best Debt House in Pakistan'
award by The Asset; "Pakistan Deal of the Year – 2009" award by the Islamic
Finance News; 'Awards for Excellence', London 2009, by the Global Custodian;
Consumer’s Choice Award for being the "Best Credit Card Provider in Pakistan" by
the Consumer Association of Pakistan.

 
 

Our business
Standard Chartered PLC, listed on the London, Hong Kong and Mumbai stock
exchanges, ranks among the top 20 companies in the FTSE-100 by market
capitalisation. The London-headquartered Group has operated for over 150 years
in some of the world's most dynamic markets, leading the way in Asia, Africa and
the Middle East. Its income and profits have more than doubled over the last few
years primarily as a result of organic growth, supplemented by acquisitions.

Consumer Banking
Consumer Banking offers a broad range of products and services to meet the
borrowing, wealth management and transaction needs of individuals.

Wholesale Banking
Wholesale Banking has a client-focused strategy, providing trade finance, cash
management, securities services, foreign exchange and risk management,
capital raising and corporate finance solutions.

SME Banking
Our SME Banking division offers products and services to help small and
medium enterprises manage the demands of a growing business, including the
support of our international network and trade expertise.

Islamic Banking
Standard Chartered Saadiq's dedicated team provides comprehensive
international banking services and a wide range of Shariah-compliant financial
products based on Islamic values.

The Standard Chartered Private Bank

Our Private Bank advisors and investment specialists provide customised
solutions to meet the unique needs and aspirations of high net worth clients.
 Executive Summary:

The main theme behind this report is to help understand the major functions of the
Personal Loans Department of Standard Chartered Bank as I had the opportunity of
interning at this prestigious bank. This requires that I introduce both the Bank and the
Department and then I will go on to give a brief summary of the major points, related to
my internship that have been presented in this report.

Standard Chartered Bank is basically the result of a merger between two banks the
Standard Bank and the Chartered Bank. Of these Chartered Bank is the oldest, having
been founded in 1853 whereas Standard Bank was founded in 1862. Over the 150
years of banking services that this bank has provided till today. SCB the merged
Standard Chartered Bank has developed a very stable position. On one hand it has a
very positive reputation in the international market which can be seen through their
presence in over 50 countries. On the other hand they have the added advantage of
having merged with various banks such as ANZ Grindlays and the Chase Consumer
Banking operations in Hong Kong in 2000. So we can see that this bank has still not lost
the urge to grow. This along with over 90 billion in assets makes SCB a very prominent
player in the international banking industry.

SCB has been one of the oldest amongst the foreign banks of Pakistan. At present it is
offering the banking consumers complete consumer banking and a wide range of
products such as long and short-term deposit/ current accounts, corporate banking
facilities, unsecured loans and credit cards. So this bank has kept a variety of products
to be able to furnish their customer to the maximum.

My internship, as mentioned earlier was in the Personal Loans Dept. which comes
under the unsecured loans of up to RS. 500000. During my internship I was assigned to
the Personal Loans Help Desk and stayed at only this position during the 6 weeks that I
worked there. From this position I was able to study the working of this entire
department as the nature of my internship sent me to nearly all the people working in
Personal Loans. I soon learnt the entire process that an application goes through, the
nature and type of tasks that were done by people at various designations in this
department. I also learnt the role that PLHD played for this dept and have therefore
discussed the entire department and also discussed the PLHD in detail. My desk was
on the “Floor” where all the counters were and also where all the customers came. I
was therefore, also able to grasp a slight idea about nearly all the departments of the
bank and the type of functions they perform. But that knowledge is not comprehensive
enough to be presented in this report. A brief idea of each dept. has still been given in
the introduction. A marketing mix analysis of the personal loans dept. has also been
conducted. This is because it is easier to introduce this dept. in such a manner as it is
basically a marketing dept. and the major revenue generating dept. of SCB.

A major portion of the report is devoted towards explaining and describing the tasks that
I performed or that I observed other people performing. These tasks have been
explained with relevance to the processes that I have discussed.
Various analysis of the dept. such as SWOT analysis, Competitive analysis and an in-
depth analysis of the role of IRR and Markup and how they work separately yet
collectively to determine the amortization schedule is also given.

The competitive analysis has been conducted with the major players of Pakistan’s
Banking Industry so as to give a realistic picture of SCB and its position in Pakistan.
Some of the major competitors of SCB and specifically competitors of the Personal
Loans dept. of SCB have been considered in the competitive analysis. Such as HBL,
Union Bank, Askari Commercial Bank etc.

Lastly I have discussed the problems that I think that this bank is facing at present and
also given recommendations as to how these can be resolved. My suggestions are
divided in categories where some suggestions are for the improvement of the product
while others are for the management of Personal Loans.

INTORDUCTION

A brief history of Standard Chartered

Standard Chartered is one of the worlds leading banks headquartered in London. Its
businesses however, have always been overwhelmingly international. The main events
in the history of Standard Chartered and some of the organizations with which it merged
are provided in this section.

The early years

Standard Chartered is named after two banks, which merged in 1969. They were
originally known as the Standard Bank of British South Africa and the Chartered Bank of
India, Australia and China. Of the two banks, the Chartered Bank is the older having
been founded in 1853 following the grant of a Royal Charter from Queen Victoria. The
moving force behind the Chartered Bank was a Scot, James Wilson, who made his
fortune in London making hats. James Wilson went on to start The Economist, still one
of the world's pre-eminent publications. Nine years later, in 1862, the Standard Bank
was founded by a group of businessmen led by another Scot, John Paterson, who had
immigrated to the Cape Province in South Africa and had become a successful
merchant. Both banks were keen to capitalize on the huge expansion of trade between
Europe, Asia and Africa and to reap the handsome profits to be made from financing
that trade. The Chartered Bank opened its first branches in 1858 in Chennai and
Mumbai. A branch opened in Shanghai that summer beginning Standard Chartered's
unbroken presence in China. The following year the Chartered Bank opened a branch in
Hong Kong and an agency was opened in Singapore. In 1861 the Singapore agency
was upgraded to a branch, which helped provide finance for the rapidly developing
rubber and tin industries in Malaysia. In 1862 the Chartered Bank was authorized to
issue bank notes in Hong Kong. Subsequently it was also authorized to issue bank
notes in Singapore, a privilege it continued to exercise up until the end of the 19th
Century. Over the following decades both the Standard Bank and the Chartered Bank
printed bank notes in a variety of countries including China, South Africa, Zimbabwe,
Malaysia and even during the siege of Makeking in South Africa. Today Standard
Chartered is still one of the three banks which prints Hong Kong's bank notes.

Expansion in Africa and Asia

The Standard Bank opened for business in Port Elizabeth, South Africa, in 1863. It
pursued a policy of expansion and soon amalgamated with several other banks
including the Commercial Bank of Port Elizabeth, the Colesberg Bank, the British
Kaffarian Bank and the Fauresmith Bank. The Standard Bank was prominent in the
financing and development of the diamond fields of Kimberly in 1867 and later extended
its network further north to the new town of Johannesburg when gold was discovered
there in 1885. Over time, half the output of the second largest gold field in the world
passed through the Standard Bank on its way to London. In 1892 the Standard Bank
opened for business in Zimbabwe, and expanded into Mozambique in 1894, Botswana
in 1897, Malawi in 1901, Zambia in 1906, Kenya, Zanzibar and the Democratic Republic
of Congo (D.R.C.), in 1911 and Uganda in 1912. Of these new businesses, Botswana,
Zanzibar and the D.R.C. proved the most difficult and the branches soon closed. A
branch in Botswana opened again in 1934 but lasted for only a year and it was not until
1950 that the Bank re-opened for business in Botswana. In Asia the Chartered Bank
expanded opening offices in, Myanmar in 1862, what is now Pakistan and Indonesia in
1863, the Philippines in 1872, Malaysia in 1875, Japan in 1880 and Thailand in 1894.
Some 34 years after the Chartered Bank appointed an agent in Sri Lanka it opened a
branch in 1892 to take advantage of business from the tea and rubber industries. During
1904 a branch opened in Vietnam. Both the Chartered and the Standard Bank opened
offices in New York and Hamburg in the early 1900s. The Chartered Bank gaining the
first branch license to be issued to a foreign bank in New York.

The impact of war

Even the First World War offered opportunities for expansion when the Standard Bank
set up a branch in Tanzania shortly after British troops occupied the formerly German
administered Dar us Salaam in September 1916. Both banks survived the inter-war
years but the worlds trade slump led to the closure of operations in the Canary Islands,
Liberia, the Netherlands, and Equatorial Guinea. Disaster struck the Chartered Bank's
office in Yokohama, Japan, when an earthquake destroyed it in 1923, killing a number
of staff. The Second World War particularly effected the Chartered Bank when Japan
occupied numerous Asian countries.

The post war years

After the Second World War many countries in Asia and Africa gained their
independence. This led to local incorporation in some countries, particularly in Africa.
Other operations such as those in Iraq, Angola, Myanmar and Libya were nationalized,
while in Indonesia the Jakarta office was destroyed in an attempted coup d'etat. In 1948
the Chartered Bank opened in Bangladesh and during 1957 it acquired the Eastern
Bank. The Eastern Bank gave the Chartered Bank a network of branches including
Aden, Bahrain, Beirut, Cyprus, Lebanon, Qatar and the United Arab Emirates. The
Chartered Bank also entered into a joint venture to form the Irano-British Bank that
opened for business in 1959. The bank grew rapidly and had 24 branches when it was
nationalized in 1981. By mid 1950s the Standard Bank had around 600 offices in
Southern, Central and Eastern Africa. Its network grew substantially in 1965 when it
merged with the former Bank of British West Africa, which had some 60 branches in
Nigeria, 40 branches in Ghana and eleven branches in Sierra Leone in addition to
operations in Cameroon and Gambia. Despite these acquisitions and expansion into
new countries such as Mexico, South Korea and Oman (1968), both the Standard and
Chartered Bank networks were comparatively small. Both viewed the future with some
trepidation as the need to protect themselves from acquisition became ever more
apparent. Standard Chartered PLC In 1969 the decision was made by the Standard
Bank and the Chartered Bank to undergo a friendly merger thus forming Standard
Chartered PLC. It was one year later that the descendants of the "Chartered Bank of
India, Australia and China" were finally permitted to open a representative office in
Sydney, Australia. Standard Chartered subsequently acquired the UK based Hodge
Group, in which it already had a minority shareholding, and the Wallace Brothers Group.
The Hodge Group brought to Standard Chartered an extensive network of UK offices
specializing in installment credit and industrial leasing, and after a period of
rationalization its name was changed to Chartered Trust Limited. Standard Chartered's
operations in Jersey emerged from the integration of other Hodge Group businesses
with those of Wallace Brothers Bank (Jersey), Limited.

Standard Chartered decided, after the merger, to expand the Group outside its
traditional markets. In Europe a number of offices were opened including Austria,
Belgium, Denmark, Ireland, Spain and Sweden as well as several major cities in the UK.
Standard Chartered also opened offices in Argentina, Canada, Colombia, the Falkland
Islands, Panama and Nepal. In the USA a number of offices were opened and three
banks were acquired. These included the Union Bank of California that gave Standard
Chartered a presence in Brazil and Venezuela. The opening of a branch in Istanbul in
1986 was overshadowed by a far more dramatic event when Lloyds Bank of the UK
made a hostile take-over bid for Standard Chartered. Standard Chartered won its right
to remain independent but entered into a period of considerable change.

By the late 1980s Standard Chartered already had considerable exposure to third world
debt. To this were added provisions against loans to corporations and entrepreneurs
who could not meet their commitments. Standard Chartered reviewed its operations and
decided to focus on its core strengths of Consumer Banking, Corporate & Institutional
Banking and Treasury in its well-established operations in Asia, Africa and the Middle
East. This led to a series of divestments notably in Europe, the United States and
Africa. During this time staff numbers were reduced; businesses not considered core
were sold or closed; associate holdings disposed of; unprofitable branches closed and
back office functions consolidated. In addition expensive buildings were sold with the
proceeds reinvested in the business, and the senior management team was radically
changed and strengthened.

Standard Chartered in the 1990s

Even within this period of apparent retrenchment Standard Chartered expanded its
network, re-opening in Vietnam in 1990, Cambodia and Iran in 1992, Tanzania in 1993
and Myanmar in 1995. With the opening of branches in Macau and Taiwan in 1983 and
1985 plus a representative office in Laos (1996), Standard Chartered now has an office
in every country in the Asia Pacific Region with the exception of North Korea. In 1998
Standard Chartered concluded the purchase of a controlling interest in Banco Exterior
de Los Andes (Extebandes), an Andean Region bank involved primarily in trade
finance. With this purchase Standard Chartered now offers full banking services in
Colombia, Peru and Venezuela. In 1999, Standard Chartered acquired the global trade
finance business of Union Bank of Switzerland. This acquisition makes Standard
Chartered one of the leading clearers of dollar payments in the USA. Standard
Chartered also opened a new subsidiary, Standard Chartered Nigeria Limited in Lagos,
acquired 75 per cent of the equity of Nakornthon Bank, Thailand; and agreed terms to
acquire 89 per cent of the share capital of Metropolitan Bank of the Lebanon.

Standard Chartered today

Today Standard Chartered is the world's leading market bank employing 30,000 people
in over 500 offices in more than 50 countries. Primarily in countries in the Asia Pacific
Region, South Asia, the Middle East, Africa and the Americas.

The new millennium has brought with it two of the largest acquisitions in the history of
the bank with the purchase of Grindlays Bank from the ANZ Group and the acquisition
of the Chase Consumer Banking operations in Hong Kong in 2000.

These acquisitions demonstrate Standard Chartered’s firm commitment to the emerging

markets, where they have a strong and established presence and where we see their
future growth.
 　

Mission Statement & Brand Values

Mission Statement:

“To offer outstanding value to our customers by providing knowledgeable,

efficient and reliable services in a personal, helpful and responsive manner.”

Over the 150 years of quality services that SCB has provided to its customers, the Bank
has had various mission Statements. However this is the one that is currently being
followed by the organization.

Brand Values:

From the above mentioned mission statement the bank has developed some very deep-
rooted brand values. These values are mainly designed with the intention of
communicating with the customers. However they also serve the purpose of showing
each employee exactly what a customer expects when he walks into Standard
Chartered. The employees are constantly reminded of the customer expectations and
have to continuously evaluate how their behavior is conformant with what the customers
have in mind. This is why it is common practice to display these values in almost each
department and on all the notice boards.

These values are there for all employees and apply especially to the personal loans
department. As it is the people of this department who are mainly going out to meet the
customers and getting the opportunity to communicate these values to them.

The values that have been developed over the 150-year life of this organization are as
follows:

Courageous
A commitment to being there for you, in good times and bad. We help you
achieve your aspirations by guiding you towards the right choice, not just the
easy one.

Responsive
We are good on our word. We are accessible whenever and wherever you need
us. Not only do we strive to deliver solutions, we also aim to exceed your
expectations.

International
We understand the balance between global and local. You trust us to be
established and internationally networked, while at the same time sensitive to
your individual needs. Our strong network across culture helps us build stronger
relationships based on ideas, not formulae.
 Creative
Creative thinkers are not limited by convention. They allow their minds to soar
beyond predictable solutions. That's how we approach each challenge posed to
us, which is why we base our products and services on ideas that are innovative,
perceptive and instinctive.

Trustworthy
We respect you, and the life you live. By understanding your needs and tailoring
the right financial solutions for you, we earn your trust.

Other Departments of Standard Chartered Bank

There are various departments in this bank due to the wide range of services that it
offers to its clients. Each dept. serves a very important role in making the difference
between a satisfied and a dissatisfied customer. The major departments that I was able
to learn about are:

IT Department:

Even though this department works at the back end and customers are never
aware of whether IT people exist in SCB or not. IT has a very important role to
play. As it is this dept. that comes up with all the latest upgrades to the system to
make it more efficient and effective. It is they who clear out the “bugs” in the BPS
system that generates Account Statements. IT also ensures that the inter branch
connection of this bank is maintained continuously through properly functioning
PABX, Fax machines, systems etc.

Personal Financial Services Department:

This department basically consists of 4 Personal Financial Consultants (PFC’s)

who have the task giving all sorts of financial services to the client. They can be
asked for information about any product of the bank or any advice to help in
reaching the best decision by the customer. It is basically there job to assist the
customer in any way possible. Their task also includes opening all types of
accounts and letting customers know of the best-suited option for them.

Corporate Department:

This department mainly dealt with all matters related to corporate accounts. By
corporate accounts I refer to all the companies that have opened accounts of
their entire staff with SCB. Management of these accounts is done in this
separate dept. of SCB. Other than management this department also has to
achieve a certain target of getting a certain number of corporate arrangements to
make this banks corporate customer base stronger. SCB has corporate accounts
of US Embassy, Australian High Commission etc.

Cash Management and Remittances:

This department is mainly concerned with the most critical and nerve wracking
work in the entire bank. This department includes the management of all cash
related activities and therefore also includes the tellers and all activities related to
withdrawals or deposits by customers. The management of funds and the
transfer of money within the bank is also managed by this dept. and the
additional services that this dept. performs are money transfers, issuing new
check books, making drafts etc.

Credit Card Department:

This dept. is basically concerned with all functions related to the credit cards of
SCB. There is a Visa card and a Gold card that is being offered by SCB. Getting
customers to buy these cards and also satisfying customers who have previously
got this card is the major function of this dept. however the dept also manages its
own collections of bad debts or people who pay late. So it is a relatively self-
sufficient dept that covers an entire product of SCB.

Priority Banking:

This dept basically exists for those customers who can open a minimum current
account for RS. 1 million or who open accounts of at least 2 million rupees in
case of savings account. Priority banking solely deals with customers who fit the
above-mentioned criteria and not with the regular customers. A separate teller
that is only for Priority Customers deals with matters of such clients. Apart from
this, finding such clients and making them open accounts with SCB is also the
task of this department’s staff.

Telemarketing:

This department as the name implies deals mainly with all telemarketing activity
of SCB within Islamabad. They provide information regarding the banks products.
They also serve clients by telling them their account balances or credit card limits
that are outstanding. This department provides further facilitation by helping get
clients for Credit cards, Personal loans and Auto Loans. Customer complaints
are also made to this department if they are via telephone.
Auto Loans:

This dept. basically deals with all SCB Car financing loans. This dept. also has a
fully equipped sales team like the Personal loan dept. and it is their job to get
customers to finance their cars through SCB.