StanChart ups Asia lending as Europe peers back off

The debt crisis in Europe and new capital requirements has forced many European banks to trim lending to Asia. But, UK-based Standard Chartered`s Group CEO, Peter Sands, says it will use this deleveraging as an opportunity to expand its market share in Asia.

"Many European lenders are deleveraging and so they are pulling back lending capacity from Asia...we feel there`s a lot of opportunity to grow our business," Sands said in an interview on CNBC`s Managing Asia.

Sands says the bank, which derives two-thirds of its profits from Asia, ramped up lending by 75 % in the four years following the global financial crisis when other banks were reluctant to lend. He sees the current environment as a chance to further grow that market share.

While 2012 is set to be a turbulent year for financial institutions, Sands says Standard Chartered is well positioned to weather the volatility and is poised for further growth. "We`re focused on the markets of the world that have strongest economic growth. We have the strength, balance sheet (and) franchise that gives us the momentum for continued growth."

Sands says the bank, which has made a push into China`s consumer and wholesale banking sector, will continue to look to the mainland for growth despite the slowdown in the world`s second-largest economy.

"You can`t have a country growing at the rate China has been growing without some bumps along the way...that is not deflecting us from our longer term strategy," he said, adding that the bank hopes to expand its retail banking operations from the current 80 branches.

In the first-half of 2011, Standard Chartered`s (Hong Kong Stock Exchange: 2888.hk) net profit rose 20% from a year earlier to a record high, on the back of robust revenue growth and stricter cost controls. Full year profits are also expected to be robust, said Sands.

The depreciation of Asian currencies against the US dollar in 2011 has impacted earnings slightly, he said, but noted that it would not harm the bank`s performance.

Copyright 2011 cnbc.com

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