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Stanchart Leads Foreign Banks in China on Small Business Loans

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March 7 (Bloomberg) -- Standard Chartered Plc, the U.K.’s second-largest bank by market value, says it’s lending more to small companies in China than its international rivals, as the government calls on lenders to support entrepreneurs.

“We probably do more lending to small and medium-sized enterprises than any other foreign bank in China,” Chief Executive Officer Peter Sands, 50, said in an interview with Bloomberg Television today. “It’s something we do in most of our markets and we have real expertise in helping SMEs, particularly those that want to export and trade with other countries.”

The Chinese government has pledged to bolster domestic banks’ financing for small businesses, to curtail defaults that may destabilize the economy. Limits imposed by the government to fight inflation had restricted lending available to smaller companies, forcing them to turn to non-bank lenders that usually charge higher interest rates.

Loans to China’s small enterprises rose 26 percent last year to a record 10.8 trillion yuan ($1.71 trillion), more than double the pace of lending to larger companies, the central bank said in its quarterly monetary report on Feb. 15.

Standard Chartered expanded its SME loan book in the “other Asia Pacific” region, which includes China, by 17 percent to $5.79 billion, the bank said in a filing on Feb. 29.

“China’s going to hit various bumps along the way, and there will be asset bubbles in certain places and NPL problems in others, but that isn’t the big picture,” Sands said. “The big picture is China will still continue to grow.”

Standard Chartered, which generated at least 73 percent of last year’s pretax profit from Asia, plans to expand its China network to more than 100 outlets from 81 at the end of last year, Jaspal Bindra, the bank’s Asia Chief Executive Officer, said Feb. 29. Standard Chartered doubled its pretax profit in China to more than $220 million last year, according to a filing that day.

To contact the reporters on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net; Maryam Nemazee in London at mnemazee@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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