The bank’s asset management arm has capitalised on demand for structured notes to post record results.

Standard Chartered Bank (SCB) wealth management has delivered ‘a record performance’ in H1 21 posting a 23% increase income to US$1.2 billion year-on-year (YoY), boosted by sales of structured notes, FX and equities.

The growth was largely supported by the UK bank’s digital investments, which brought a 27% increase of the income excluding bancassurance YoY, according to its 2021 interim report.

Digitalisation and technological development are key items on the group’s agenda

Despite the slow-down registered in Q2, the bank’s income rose 26% to US$554m in the quarter YoY after reaching US$646m in Q1, which was down 14% YoY. 

In consumer, private and business banking, the income grew one percent while assets under management were up four percent to US$246 billion in H1 21 YoY, which was driven by new wealth originations in Asia, according to the report.

The digital capabilities in the banking segment are particularly around onboarding, sales and marketing. ‘Digitalisation and technological development are key items on the group’s agenda,’ stated the bank.

One of the most recent developments, the launch of SCB China’s equity-linked deposit platform, which went live in December 2020, is already adding to the business with around CNY1 billion (US$154m) notional traded, as reported by SRP.

In H1 21, SCB introduced MyRM, banking software that enables clients to connect with their relationship managers in Singapore and UAE.

The Asian market remains the bread and butter for the UK bank where the pre-tax profit rose 41% to US$2.24 billion in 1H 21 YoY, accounting for 83.5% of the total. In Europe & Americas, the pre-tax profit decreased five percent to US$337m.

Nicolas Rigois (pictured), global head of capital market products and solutions at SCB based in Singapore, told SRP in June that the notional value of structured notes traded by the bank in Hong Kong SAR and Singapore rose 20% in 2020 YoY - the volume advanced another 12% in Q1 21 quarter-on-quarter.

However, operating income from transaction banking, financial markets, retail products and treasury at SCB in H1 21 dropped 16%, six percent, 11% and 22%, respectively, YoY.

Along with wealth management, lending & portfolio management delivered a bright spot as its operating income climbed 10% to US$486m YoY.

Groupwide, SCB recorded a net profit of US$1.9 billion in H1 21, up 81% YoY, while its total operating income decreased five percent to US$7.6 billion.

Structured products

Structured notes issued by SCB, booked as ‘debt securities in issue’, recorded liabilities at US$603m as at 30 June, up from US$160m six months ago and from US$456m year-on-year, the report shows.

During the six months, the structured notes issuance and settlement amount reached US$734m and US$361m, respectively.  

In addition, the commercial bank issued credit-linked notes (CLNs) for portfolio management purposes, referencing loan assets with a notional value of US$10 billion in H1 21, up from US$8 billion in 2020.

SCB also executed its first ESG-linked derivative in H1 21, according to the report.

SRP database registers 28 live structured products issued by the bank, spanning Singapore (11), Malaysia (10), UK (four) and Taiwan (three). 

Click here to read SCB’s H1 21 report.