Asia Risk corporate rankings 2013

Keeping up to date with the regulatory developments in the derivatives business has been key for banks seeking to stay on top in their dealings with corporates – something that Standard Chartered, this year’s overall rankings winner, has achieved

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The derivatives environment in Asia over the past 12 months has been dominated by regulatory changes both across the region and the rest of the world. While some of these changes are welcome news for corporates doing business here – the liberalisation of the renminbi for example – extraterritorial rules stemming from Dodd-Frank in the US and the European Market Infrastructure Regulation (Emir) in Europe are receiving a colder reception.

Against this backdrop, Standard Chartered has sharpened its focus on regulation and its know-how about the implications for clients, which has helped it win Asia Risk's 2013 corporate derivatives rankings survey. In particular, as the renminbi continues along the road of internationalisation, the UK bank has helped its global client base to expand its use of the currency.

The bank ranked highest among structured and vanilla hedging products in RMB and had top spot in G-7 ex-Japan currency and interest rate derivatives. HSBC came in second on the back of its strong RMB and Hong Kong dollar business.

Chris Wait, global head of sales at Standard Chartered, says maximising RMB-related business has dominated corporates' thinking and the bank has helped in developing their treasury centres and identifying trading opportunities tied to the RMB. "Our core footprint allows us to be at the forefront of RMB internationalisation. We continue to focus on multinationals and global corporations, to service their RMB cross-border remittances and other foreign exchange needs," he says.

Last year was a strong year for both global and local corporates across the industry, buoyed by a steadier global economic recovery. Corporate foreign exchange volumes for Standard Chartered, with its core clients, for example, are up by approximately 40% year-on-year driven by growth in emerging markets.

According to Wait, the bank supports RMB services and investment products for corporate clients in 36 markets and Nostro services for institutional clients in 66 markets. It recently issued a 5 billion yuan ($815 million) bond in the domestic interbank market which, the bank claims, is the largest RMB bond issued by a foreign bank in China.

Wait says that by providing clients with a dedicated unit focusing on onshore and offshore China, it has been able to maintain consistency in the quality of its coverage. The bank's sales force has separate units for multinational and global corporations, allowing it to tailor services to the two groups based on the preferred approaches the different treasury managers use to manage their balance sheets.

The bank's global network has paid off with its RMB service facilitating a foothold in Africa. This region, Wait says, has been an outperformer for the business this year and continues to provide opportunities for growth.

Standard Chartered has also bolstered its presence in mainland China while strengthening its position in the offshore RMB centre of Hong Kong and more recently Singapore. It was among the first group of banks to issue the debut offshore RMB-denominated three-year bond in the Lion City, after Singapore became operational as an offshore centre for the currency in May.

As well as RMB developments, Standard Chartered has also been tackling the impact of western financial regulations on corporate derivatives users.

"We remain focused on the changing regulatory landscape. We work closely with our core clients, regulators and local corporate treasury associations across our footprint, to educate them on what we view as the main challenges with respect to Dodd-Frank, Emir and other regional regulatory dynamics," Wait says.

Standard Chartered has also been at the forefront of the lobbying effort to get corporates exempted from mandatory over-the-counter derivatives clearing requirements, fostering a close dialogue about clients' concerns over the past year.

One of the UK bank's strengths is its long-term relationship with clients. The bank recently celebrated 150 years in Indonesia and, according to Wait, has been consistent in its commitment to the region's businesses operating both in Asia and around the world.

"Standard Chartered's mantra has been to be the best bank in our core markets via a seamless global coverage model to consistently deliver the best products and client services. Enabling this cross-border franchise is our connectivity within teams from transactional forex and payments to origination and distribution to advisory services," Wait says.