Here for good: Standard Chartered’s commitment to Jordan’s finance sector
CEO Jordan and Country Head of Corporate Banking, Muhannad Mukahall, envisions a steady future for Standard Chartered Jordan Bank and highlights the benefits of finance technologies. With over 20 years of regional financial knowledge, Mukahall is confident that Standard Chartered Jordan can, along with its on the ground knowledge, level of services and international standards, disseminate its skills to Jordan to lead within the finance industry.
Through the acquisition of ANZ Grindlays Bank and the much earlier acquisition of the Ottoman Bank in 1925, Standard Chartered has been operating in Jordan for almost a century. What has Standard Chartered added to the local banking sector?
To start with, Standard Chartered is a leading international banking group that has more than 86,000 employees and a presence in 60 dynamic markets.
Standard Chartered was the first bank to operate in the Kingdom.
We have a 94-year history in Jordan and remain deeply committed to growing and investing in our franchise. Our heritage and values are expressed in our brand promise: “Here for good”.
What we have added to the local market is our bank’s wealth of international experience, long-term solutions for our trusted clients and our strategic partnership with the private and public sectors. We offer structured and tailored solutions for our clients through our extensive global network and international best practices. We bank three segments: Retail, Commercial and Global Banking; which cater to individuals and corporations alike. We offer a range of banking products, from a simple credit card to a more complex M&A advisory service. In addition, we are Jordan’s trusted sub-custodian, capturing the majority market share. What this means for us, is that our work is not just about giving clients the normal banking service. As an international bank, our focus is on building long-term relationships where we can add value for clients, as well as sharing our international experience and abundance of knowledge across the years. Of course, we are also proud of our strong ties with the Government of Jordan, the Central Bank of Jordan and the public sector, where we are considered a trusted partner.
What is more, we believe in empowering the community that we work within, which is why we have implemented various sustainability programs. We are utilizing the tool of volunteering, that is heightened during the holy month of Ramadan with Tikyet Um Ali to serve Iftar meals to underprivileged families. We also have several sustainability initiatives such as our “GOAL” program, launched in 2011, which seeks to empower women through sport and life skills and is targeted at adolescent girls in partnership with the Ministry of Education and Injaz.
We are proud to say that it has reached more than 15,000 girls in various rural areas across the Kingdom.
Last year, Standard Chartered Jordan also launched Goal Employability and Entrepreneurship Fund in order to train 200 Goal champions on the basics of entrepreneurship in order to equip them with tools that will prepare them in their entry to the job market. On the other hand, we launched “Seeing is Believing” in Jordan, which is a global program of our bank that aims to eradicate avoidable blindness. One of its initiatives that was implemented locally in Irbid, was done by screening 30,000 students.
We have a strong focus on community, women and youth empowerment through these programs to develop and enhance skills that serve as building blocks in our society.
What is more, along with our Futuremakers initiative, we launched the Employee Volunteering plan targeting Jordan’s youth for them to become active and knowledgeable members of their society. Through our collaboration with Injaz Foundation, we are ensuring they have access to schooling and universities as well as special needs education.
What have been the most notable challenges you have faced as a bank in your time here? And what have been the most notable achievements?
One of the main challenges we have encountered is the unstable geopolitical landscape in the Middle East region. Of course, Jordan has been surrounded with various Arab Spring movements that has affected its various sectors.
Another challenge was the swift shift to digitization worldwide and across the financial sector, and the need to accommodate moving into an online platform that would offer the same level of security and quality services to our clients that they have been privy to for many years. At the same time, the Central Bank of Jordan has been issuing policies to regularize this ongoing shift and to safeguard banks and their clients.
Despite the effects of regional and international challenges that have affected the local market and its institutions, the opening of markets, mainly in Iraq, have posed an opportunity to explore a wider network of clients to present more business prospects. Some of these are network/corridor opportunities that capture cross-border possibilities from trade and investment flows mainly from China and India in the east and Iraq and the GCC in the MENA region. We are proud to say that regardless of trials posed, our most recent achievement was completed around the end of 2019. We were mandated as a financial advisor to Jordan Petroleum Refinery Company for their fourth expansion project. We also acted as Structuring Bank, GuarantCo Coordinator, Mandated Lead Arranger, Facility & Security Agent and Account Bank, and we executed a five-year GuarantCo guaranteed facility of USD 42.5 million with Classic Fashion Apparel Industry.
Also, this year, our bank was awarded “Best CSR Bank” by the International Business Magazine, in addition to the “Best Corporate Bank” in Banking Awards by the International Finance Magazine.
As for 2018, we closed a first of its kind project for our bank in the Middle East, as the project is concerned with the wind energy sector. We finalized a USD 43 million agreement with Korean Wind Power Company “Dihan” to finance the 51.75 MW wind power project in the Tafileh province. The project is also considered the second renewable energy agreement for our bank in Jordan.
How important has the local banking sector been to Standard Chartered? How do you view local competition?
Despite regional geopolitical tensions, Jordan is still perceived as one of the region’s safest countries and a regional economic and technology gateway.
We aim to work closely with the government on projects to provide near term needs and longer-term strategies. The bank has strong relationships with financial institutions and is looking to grow the banking and non-banking FI portfolio in Jordan. On top of that, the bank has the means and ability to cater to the Global Subsidiaries that operate in Jordan, as we maintain a good reputation and relationship with major corporations across the globe. The formula that enabled local banks to offer products at very competitive prices is a very strong balance sheet and a highly liquid local market; this is including products that were previously dominated by banks with the ability to book offshore. In addition, Jordan is a regional front runner in technology and modern innovations, with a pipeline of major transformational projects which Standard Chartered is keen to be a part of. Within the local market, we have a strong banking sector due to the backing of an effective regulator.
By following the latest innovative methods and state of the art technologies, Jordan is enabled to compete at international standards.
When we talk about the local market, we were serving past generations of our clients’ families and are now providing services to their current and future generations. This concept plays an important role in our identity as a local institution. Our clients not only receive products we also offer customized and in-depth solutions for their businesses to empower forward thinking and future planning.
How does the bank service corporations and individuals looking to invest?
Well, here in Standard Chartered, our key business segments highly cater to both retail and corporate banking. The retail-banking segment focuses on banking and attracting high net-worth, affluent individuals with an appetite for investment and foreign exchange products. Standard Chartered Jordan is a leader in wealth management and now, looking forward, is focusing on investing in digital capabilities to bring convenience to clients in line with regional initiatives.
As for the corporate banking segment, it covers a selection of businesses in Jordan, including local large and medium size corporations, financial institutions, commercial businesses and global subsidiaries. Aside from trade and lending, Standard Chartered offers project finance and advisory and hedging solutions.
What are your plans with regards to expanding retail banking, in terms of geographical spread? And in what ways has Standard Chartered adapted to new disruptive realities?
Moving into digitization is the future of the banking and finance sector; and one of our main priorities for our business in the country is to focus on that. It is critical to stay onboard the global trend and move into it in the future. We aim to serve our clients through various modern and innovative digital pathways that will cater to each need. Our dedication and investment towards digitization is reflected by spending between USD 1.6 to 1.7 billion a year towards this shift as our group CEO, Bill Winters, has stated recently, to stay on the modern trajectory with the many changes in the banking landscape. In Africa and the Middle East, we have been leading the way in driving a strong digital innovation agenda.
For example, we launched the bank’s first full-fledged digital bank in Côte d’Ivoire followed by Uganda, Ghana, Tanzania, Kenya among more countries, with further plans to replicate the business model in other countries with Standard Chartered presence. We have also championed starts-ups and the Fintech community through our SC Venture Arm. We are always trying to stay ahead of the curve. We bring a depth of international standards and banking knowledge to the local market and we are well positioned to be the go-to advisory partner to high-profile clients, businesses and the public sector. As mentioned earlier, we take pride in our on the ground presence, deep local knowledge and international expertise, that enable us to provide an unrivalled level of service and expertise to local corporations and the high net-worth segment of retail banking in Jordan.
In a dynamic and technically complex environment such as that of the financial sector, regulatory authorities are required to develop a constant and close interaction with the market participants. In your view, how advanced is Jordan’s financial regulation system?
Given the presence of 24 banks in the market, the financial regulatory system in Jordan is quite advanced and well established. The Central Bank of Jordan adopts the latest and highest of standards in line with the world’s major regulators, not to mention having strong ties with IMF and the World Bank, which is a highly added value to the local market in general. Following guidance and direction from the regulator, banks in Jordan are adopting the latest technologies in an ever-changing banking environment.
The regulator consistently views the customer as the main beneficiary and is constantly viewing their policies and moves through that lens, while also fully supporting a saturated banking market. However, given the economic constraints in the country, our financial regulation system is liquid, with strong focus on capital adequacy within the financial system. We are proud to say that our bank has a long standing and strong relationship with the regulator and is in-line with all regulatory requirements.
It has been a decade since the financial crisis – has the global banking system fully recovered? And to the best of your knowledge, what can we expect in 2020?
During the years post the financial crisis, the world has witnessed some pockets of growth in countries across the globe, while others have faced instability regarding regional turmoil such as our region the Middle East. Of course, the trade war also had its effects globally as well. However, regardless of the general slowdown, Jordan was well regulated during and after the financial crisis. Jordan remains well capitalized, and we must be adaptable and embrace new innovative business models circled around technology and innovation. Jordan also boasts security and stability, albeit in a turmoiled region, and is still perceived as one of the region’s safest countries and a regional economic and technology gateway.
Due to GoJ’s efforts through the Jordan Investment Commission, foreign investment is encouraged, and an environment of growth has been molded in recent years that is the result of the cooperation of private and public sectors in joining hands and creating such an atmosphere. For example, the London Initiative 2019 that was co-hosted by the UK and Jordan aimed to emphasize investment opportunities in supporting the Jordanian economy. It remains a substantial undertaking by the government, and in which we a bank also participated in.
Additionally, one of the factors affecting public debt in previous years was the energy bill for Jordan in terms of elevated prices. However, the recent consolidation between the governments of Jordan and Egypt to cover the country’s gas needs is a substantial and strategic initiative that would lower Jordan’s energy bill for years to come. Looking forward, you can expect a growth and adaptation of Fintech (financial technology) that will create new opportunities for the financial sector. All are positive signs amidst a troubled region, which for Standard Chartered Jordan poses an opportunity to cement its footstep in the country.
By Ghalia Mousa