Thu, Dec 10, 2020 – 5:17 PM
STANDARD Chartered Singapore was awarded enhanced “Significantly Rooted Foreign Bank” (SRFB) privileges by the Monetary Authority of Singapore on Thursday, paving the way for it to set up a digital-only bank.
The enhanced SRFB privileges allow StanChart to secure an additional full bank licence to establish a subsidiary to operate new or alternative business models, such as a digital-led bank with ecosystem partners.
StanChart Singapore was in August named the country’s first SRFB, with MAS looking to further boost the SRFB framework to possibly offer an additional full bank licence.
If this digital bank comes to pass, StanChart will join the four digital banks here that were recently awarded licences by MAS. Consumer Internet company Sea and a Grab-Singtel consortium nabbed the two digital full-bank licences, while the two digital wholesale bank licences were clinched by China’s Ant Group and a Greenland Financial-led consortium.
In a statement, Patrick Lee, CEO of StanChart Singapore, said: “We are excited about the opportunity to secure an additional full bank licence under the enhanced SRFB framework, and are actively developing and exploring the best digital models for consumers in Singapore.”
The bank earlier confirmed that it was mulling over its decision whether to build a digital banking outfit here, similar to MOX in Hong Kong.
StanChart Singapore’s enhanced privileges are in recognition of the bank’s “significantly higher degree of rootedness” exceeding the SRFB baseline criteria, according to a statement. With the signing of the UK-Singapore Free Trade Agreement (FTA) on Thursday, it will also be entitled to additional customer service locations on top of the 50 which it is entitled to as an SRFB. As at August, it had 18 places of business.
Bill Winters, group chief executive, StanChart, noted the “long and extensive” UK-Singapore bilateral relationship, and said that the signing of the UK-Singapore FTA enables continuity from the EU-Singapore Free Trade Agreement (EUSFTA).
“Singapore is a core market for us, and it is a significant honour to be granted enhanced SRFB privileges,” he said in a statement. “We have invested and grown in Singapore to be the global business and operations hub that we are today, and we look forward to playing our part in developing the country’s banking landscape.”
StanChart is the first domestic systemically important bank to incorporate all its businesses in Singapore, and the largest foreign banking subsidiary with a US$80 billion balance sheet backed by US$6 billion of capital. Singapore is the group’s operational hub housing global businesses, technology and operations; and many of the bank’s leadership teams are anchored here.
Singapore is its second largest market after Hong Kong.
The SRFB framework was announced in 2012, with SRFBs awarded only as part of an overall package negotiated under FTAs with qualifying full banks’ (QFBs) home countries, and to QFBs that are “significantly rooted” here.
The first FTA that includes SRFB commitments, the EUSFTA, entered into force on Nov 21, 2019. StanChart Singapore is also the first QFB to qualify for SRFB privileges under the EUSFTA commitments.
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