StanChart sees Asia and the Middle East as bright spots in the weak global economy

SINGAPORE, Nov 21 (Reuters) – Standard Chartered (STAN.L) expects Asia and the Middle East to outperform other regions even as inflation spirals and borrowing costs soar risk tipping the world’s major economies into a recession next year, a senior executive at the bank said.

The London-based lender has boosted its transaction banking and capital markets businesses, betting the two regions will still experience economic growth while many Western countries face contraction, said Simon Cooper, CEO of StanChart for the corporate, commercial and institutional banking activities.

“I don’t see recession as a big risk in this part of the world. In Asia and the Middle East, I see the economies doing well,” said Cooper, 55, who is widely regarded by the business community. investors as a potential successor to CEO Bill Winters.

StanChart, which operates in 59 countries with a focus on Asia, the Middle East and Africa, is seeing its European and American customers move more business to Asia at low cost.

“As a result of COVID, we’ve seen the shift to Southeast Asia and neighboring countries from a manufacturing perspective. It’s continued and rather accelerated,” said Cooper, based in Singapore, to Reuters in an interview.

He said markets were looking to see the timeline for China to exit its zero-COVID policy.

StanChart, which derives most of its revenue from Asia, announced a 40% increase in pretax profit in the third quarter and raised its revenue growth forecast for the year as higher rates boosted its business. main loan.

Cooper also pointed out that India was a big beneficiary of supply chain changes and strong economic growth. “India has probably been in the best place for quite some time. People are starting to see a real opportunity there,” he said.

Cooper, who has already spent more than two decades at HSBC (HSBA.L), leads the division that contributed about three-quarters of StanChart’s pretax profit in the nine months to September.

StanChart’s focus on growth markets and its ability to better weather the economic downtown comes at a time when some global banks have announced plans to cut jobs as they brace for a recession and are hit. by the weakness of their investment banking activities.

Revenue from StanChart’s capital markets business jumped 17% to a record last quarter. “We now have much more balanced financial markets activity than before, from macro trading to foreign exchange to global credit markets,” Cooper said.

“We’ve seen client net income grow in double digits this year,” said Cooper, who is also CEO of StanChart’s Europe and Americas business.

Reporting by Anshuman Daga; Editing by Muralikumar Anantharaman

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