Last year, Standard Chartered recorded the first loss in the past many years. What are your strengths that will bring you back to profit making?
I'm convinced that we can return the bank to profitability because the core strengths that have been with the bank are still there. We made some lending mistakes in the years previously that we needed to address last year. On top of that, we had a very difficult environment in our markets, with slower economic growth and much lower commodity prices.
The economic environment remains challenging. Commodity prices remain low and there's quite a bit of uncertainty in terms of how markets will behave.
But we are convinced that the markets which we operate in China, the rest of Asia, the Middle East and Africa have good medium-and long-term prospects.
In China, in which sectors are your bad loans distributed? Are there any sectors or companies that you will refrain from lending?
Our asset quality in China is broadly OK. We did have non-performing loans in China but the overall scheme of our Chinese business is perfectly manageable.
We had some of the same concentrations of bad loans in China that we had elsewhere commodity-related companies. We have a very large small and medium-sized enterprises) business in China and we had relatively small but broadly dispersed risks in our commercial banking business.
When you think about our aggregate nonperforming loan problem, China doesn't feature as one of the trouble spots. We are not looking to tighten up our standards fundamentally in China.
You mentioned about digitizing your business in China. What do you think of the evolving financial technology and Internet financing here in China and emerging Asia?
The development of financial technology now allows for leapfrogging in many different ways. Of course we can be the one that does the leapfrogging or we can be jumped over, depending on how proactive we are.
I think there are broadly two types of financial technology firms that are being created: First, companies that want to disrupt the existing market and displace banks. Second, companies that want to find ways to basically serve banks or partner with banks. There will be a place for both as time goes by.
We'll spend something like $1.4 billion this year on technology-related investments. Most of that is financial technology even if it's entirely based on our existing systems.
What impact will the fluctuations of the renminbi exchange rate have on the currency's internationalization?
The volatility in markets both the RMB itself and also the Chinese equity market and the impact of that volatility on international markets is quite profound. We have to split it into a few different areas to consider.
I think the Chinese authorities are starting to have a set of long-term communication strategy that avoids the kinds of surprises that we had over the past eight months.
But fundamentally, we believe that the China growth story and China competitiveness in international trade remain strong, so we don't see a need for its substantial reduction in the value of the Chinese currency.
Do you visit China often? And what is your impression on changes in China over these years?
I came to China in 1989 for the first time as a tourist, and I've come probably every year since. I've been to many different parts of China, sometimes alone and sometimes with my family because we very much enjoy traveling to this country.
China has changed dramatically over that period. From the outsider's perspective, it's an incredibly dynamic country in every way and will continue to be so.
CV
Age: 54
Career:
2015 onwards: Standard Chartered Plc, group chief executive
2011-15: Renshaw Bay, chief operating officer and chairman
2011: Parliamentary Commission on Banking Standards, advisor
2010: Independent Commission on Banking, committee member
1983-2009: JPMorgan
Education:
1983: Bachelor's degree in international relations from Colgate University
1987-89: Master of Business Administration from the Wharton School at the University of Pennsylvania
Family:
Married with two children
