Credit portfolio manager of the year: Standard Chartered

Risk Awards 2026: Bank brings synthetic risk transfer to new jurisdictions and develops new tools to improve balance sheet flexibility

Top left to right: Lim Wei Li; Gregory Gan; Mothusi Sebina; Lee Yongmou. Sitting, left to right: Lincle Liao; Kavita Raman; Teo Puay Tin; Anand Venkateswaran

Photo: Standard Chartered

For banks with global corporate lending franchises, the past few years have sharpened an old dilemma. Growth in client activity is increasingly concentrated in emerging markets and regional hubs, but capital and risk appetite are still largely managed from head office. Synthetic risk transfer – where investors agree to absorb a defined slice of portfolio credit losses in exchange for a premium – has become a core tool for freeing up the balance sheet. Yet most transactions still focus on a single risk booking centre, limiting the benefits for local franchises that are trying to expand.

Standard Chartered has been looking for ways to break that pattern. Its latest iteration, Shangren VII, is a synthetic risk transfer referencing a portfolio of trade finance exposures that delivers regulatory capital relief in both London and Singapore through a single structure. As the first regulatory capital relief trade of this type to be recognised in Singapore, the deal marks an important milestone for the bank as well as for the market, opening the door for other banks in the region to use similar structures to improve capital efficiency.

“The capital relief mechanism through Shangren has in a sense closed the triangle for us between our three hubs – the UK, Hong Kong and Singapore,” says Kavita Raman, global co-head of credit and portfolio management (CPM) for assets at Stanchart.

We have to maximise the availability of our distribution tools not just at the group level, but also at the local level

Teo Puay Tin, Standard Chartered

In technical terms, Shangren uses credit derivatives to shift the first losses on a pool of trade assets to an external investor, allowing the bank to reduce the risk-weighted assets attached to the portfolio without disturbing client relationships. What makes it stand out is that supervisors in both jurisdictions recognised it as a significant risk transfer, allowing capital relief at a local level rather than treating it purely as a group-level exercise.

“It also gave us a lot of comfort – the fact that we were looking across two regulatory regimes, and it was therefore seen by more eyes than just a single regulator,” says Raman.

Aligning expectations across two supervisory regimes and external investors required extensive preparation and ongoing dialogue, but Standard Chartered was able to steer the process to a successful conclusion.

“When we enter into complex trades like this, we’re always very open and transparent with our stakeholders,” says Teo Puay Tin, head of credit and portfolio management distribution at Stanchart. “They do have different emphases, but they are all good, and they all actually come together very nicely for us.”

For Standard Chartered, the deal – completed in March 2025 – is as much about strategy as structure. The bank works across more than 50 markets, and its CPM team wants distribution tools that can be deployed wherever balance-sheet pressure is most acute. Teo says that requires the team to be nimble above all.

“We want to execute and progress on our super-connector strategy, so we have to maximise the availability of our distribution tools not just at the group level, but also at the local level,” she explains. “I believe not many international banks have been able to mobilise liquidity or asset distribution locally as well as we have done.”

European assets, Asian funding

The same logic underpins a broader rethink of how Standard Chartered uses its three main hubs. If Shangren closed the triangle between London, Hong Kong and Singapore for capital consumption, an internal project known as Symphony set out to do something similar for funding. For years, a large share of corporate and institutional assets were originated in Europe and naturally ended up on the UK balance sheet, even as Hong Kong and Singapore accumulated surplus retail and corporate deposits that were often recycled into government securities rather than client lending.

“The idea has really been to explore how we can make funding we have from the East more fungible and available to the West – to look at how we could then use the balance sheet we have in Hong Kong in particular, but also in Singapore, to host assets that, typically, if we hadn’t tried to change things, would naturally sit on the UK balance sheet where they were originated,” says Emmanuel Ramambason, global co-head of credit and portfolio management for liabilities at Stanchart.

We’ve established a systematic approach for us to build our corporate plan in the respective balance sheets

Emmanuel Ramambason, Standard Chartered

Symphony brought credit portfolio management together with treasury, business heads and the group asset and liability committee to map out, in detail, which assets could move, where they should sit, and what that would mean for each receiving entity.

The objective was not simply to shift exposures for the sake of it, but to align client-facing origination with the “smartest and most competitive” place on the balance sheet to book the resulting assets, says Ramambason.

“It’s something we’re very happy with and will continue to pursue into next year, as we keep optimising how we organise our client-facing origination strategy,” he explains.

Making that work in practice required a careful reading of local risk appetite rather than just focusing on group return-on-equity. The bank therefore needed to run all the proposed rebookings through stress tests, while calculating regulatory ratio impacts for each affected entity.

Left to right: Prashant Hampihallikar; Ravi-Kumar Singh; Michael Krawtchenko; Emmanuel Ramambason; Steven Chisholm; Akhtar Muhammad Shah; Clement Monteil; Javid Ashraff

Photo: Standard Chartered

“This is a key part of what needs to be validated and framed as a condition precedent, so that we’re bringing into the local scene assets that align with the appetite we have locally,” says Ramambason. “Then there’s the local capacity to warehouse the right assets against the local constraints we face – whether from the capital, leverage, or liquidity ratio capacity we have locally.”

Over 2024 and into 2025, this work has started to pay off, with around $10 billion of assets rebooked across the three hubs, giving the UK more room to rebalance its funding mix while allowing Hong Kong and Singapore to put more of their excess deposits to work in client business.

“We’ve established a systematic approach for us to build our corporate plan in the respective balance sheets, keeping in mind what assets we think those balance sheets can look to get from our clients down the road – assets that historically would have been booked in other parts of the balance sheet,” says Ramambason.

Preparing for the next shock

If Shangren and Symphony show how Standard Chartered is rethinking its global balance sheet strategy on a business-as-usual basis, a third strand of the CPM agenda focuses on improving the bank’s resilience in stress conditions. Recent episodes such as the collapse of Silicon Valley Bank and rescue of Credit Suisse in the space of a few days in March 2023 have sharpened management’s focus on what a real-world stress might look like for a cross-border franchise. In particular, the CPM team has been searching for ways to establish contingent liquidity that is available in stress conditions without hampering the bank’s return-on-equity in normal conditions.

“How we manage our liquidity in a crisis has been a key question and focus that our CPM has helped our treasury look at and respond to, in a way that is as business-supportive as possible, while obviously giving regulators an adequate level of comfort that we’re ready if and when a crisis occurs,” says Ramambason.

The response has been to build out a liquidity distribution initiative – a set of pre-arranged structures with core clients that can be activated to generate cash in a stress situation, without needing a fire-sale of assets or dramatic changes in the bank’s service provision to clients. In simple terms, the bank uses its existing corporate loan portfolio to create securities that can be used as collateral for secured funding at short notice, broadening its armoury beyond central bank facilities and other traditional tools.

“[The initiative] has helped us through the support of our clients to really prepare the ground so that we have positions and deals which, if and when a liquidity crisis comes, we’ll be able to use to generate additional liquidity and help ensure the bank is in a strong position to weather the storm,” says Ramambason.

Crucially, CPM wanted this extra flexibility without inflating the balance sheet or creating new sources of volatility in normal times. Traditional liquidity trades – such as increasing holdings of high-quality liquid assets (HQLAs) like government bonds – can weigh on leverage ratios and expose the bank to mark-to-market swings.

“We thought the best way to add to this diversity of liquidity distribution tools was to avoid inflating day-one liquidity, since that brings additional risks,” says Teo. “So we asked ourselves: is there an off-balance-sheet way to optimise funding and manage cashflows?”

This was the thinking behind the Dawn committed liquidity programme, launched in the final quarter of 2024 and intended to provide liquidity resilience in a sustainable manner without undermining return on tangible equity (ROTE).

The result is another example of CPM operating at the intersection of client business, treasury and regulation. Through Dawn, Standard Chartered has effectively pre-positioned parts of its loan book as a contingent funding source, strengthening its ability to withstand a shock without hampering capital and leverage ratios in business-as-usual conditions.

In normal conditions, the structure is a standard offsetting pair of repo and reverse repo trades with the same client using HQLA securities, thereby minimising the capital impact. During a liquidity stress event, Stanchart replaces the HQLAs it transfers to the client in the reverse repo leg with notes issued by a special-purpose vehicle and backed by the pre-positioned loan portfolio. The bank therefore receives repo funding while retaining the HQLAs to boost its regulatory liquidity ratios.

Playbook for local stress

While Dawn focuses on group-level resilience, some of the toughest balance sheet questions for Standard Chartered sit in its smaller markets where the sovereign is rated below investment grade. Pakistan was a case in point. A long-running political crisis that resulted in a general election being delayed in 2023 left the sovereign with a CCC rating. During 2024, the increased political risk acted as a drag on the real economy.

“From a client perspective, given the issues in the country, there was lower demand for banking lines,” Raman notes.

At the same time, Stanchart was experiencing sharp deposit inflows linked to a flight to quality by clients – especially large local corporates and the Pakistani subsidiaries of multinational companies. Given the lack of lending opportunities, that extra liquidity was mainly recycled into sovereign bonds or central bank deposits. The returns on those bonds were high given the low ratings, but that advantage was offset by the capital implications of holding the portfolio.

“We had to allocate much higher RWAs to it due to the downgrade,” says Raman. “Due to all that, the ROTE ratio particularly fell.”

We bring together the different businesses of the bank and we aim to get all the needed stakeholders aligned on what’s right for the bank

Emmanuel Ramambason

Stanchart is in emerging markets to generate growth, not retrenchment, so an answer had to be found. The CPM team stepped in to work through both sides of the balance sheet – how much local liquidity the bank really needed, how much sovereign exposure was appropriate, and what alternatives existed to put surplus cash to work in a more capital-efficient way.

“It’s a classic example of what we can do as a CPM construct that covers both assets and liabilities across all our banks’ businesses,” says Ramambason.

Working with local management, treasury and risk, CPM devised a plan for reassessing target liquidity levels, reducing excess holdings of high-RWA sovereign bonds where possible, and looking for structures that could support client lending without unduly straining capital. Stanchart lent surplus Pakistani rupee liquidity to multilateral development banks, which can reuse it for their own operations in the country. Given the AAA ratings of those institutions, the new exposures carried a zero risk weight.

Stanchart also substantially increased its portfolio of mutilateral-backed lending in the country, with 50% participation rates from the multilaterals further helping to reduce RWAs while keeping loan origination active. It’s a playbook that could now be applied to other sub-investment-grade markets.

“The playbook’s ultimate objective applies to all our balance sheets: we bring together the different businesses of the bank and we aim to get all the needed stakeholders aligned on what’s right for the bank,” says Ramambason. “Year-to-date, we’ve probably touched six to seven countries where, in one way or another, what we saw [in Pakistan] has helped us shape what we think are material benefits for the bank by bringing the businesses together.”

It is a reminder that Standard Chartered’s CPM function is not just about complex structured trades in the main hubs, but also about making country-by-country calls on where capital and liquidity can be put to best use for conventional banking activities.

Know your balance sheet

Looking ahead, Standard Chartered’s CPM team sees its role increasingly defined by the tools it can put into the hands of the rest of the bank.

“Part of what CPM has really embarked upon is helping the bank improve the ability to understand and look at our balance sheet key aggregates in a more fluid and agile way,” says Ramambason. “That way, we have a shared set of tools across the finance function, the business function, and the risk function, which gives us maximum ability to make informed decisions with very fast turnaround times.”

The tools need to be as usable as possible, but the fact they are deployed across teams is also a vital part of their value. The idea is that decisions on where to book assets, how to distribute risk, or when to pull a liquidity lever should increasingly be made using a common, near-real-time view of the balance sheet, rather than through siloed analyses.

On the asset side, the bank expects its originate-to-distribute model to keep expanding, to enable the company’s growth plans. That will include collateralised loan obligations, new types of SRTs, or forward flow transactions, where SPVs are collateralised with loans as they are originated rather than from an existing warehouse.

“For us, that’s not going to stop, and we will continue to innovate across our markets,” says Raman.