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New CEO outlines ambitious plans for SCNB

October 2, 2000

AFTER just four months into his Thailand posting, Vishnu Mohan may still need a road map or a driver to help him navigate the streets of Bangkok, but the new CEO of Standard Chartered Nakornthon Bank knew from day one how he was going to run the bank.

"He immediately settled down to business, outlining his vision and putting across a clear message as to what he would like to achieve with the bank," said one of his aides.

Mohan plans to expand SCNB into a key player in local consumer banking, as well as upgrading its corporate and treasury businesses.

After his outstanding performance at Standard Chartered Bank in Ghana, where he worked for almost six years, Mohan was given a new challenge with the top job at SCNB.

In September last year the UK-based bank acquired a 75-per-cent stake in what was formerly known as Nakornthon Bank from the Financial Institution Development Fund.

While other international banks have been consolidating, Standard Chartered has mounted an aggressive acquisition campaign, capping it with the recent acquisitions of Chase Manhattan Bank's credit-card business in Hong Kong, a banking business in the Middle East and a Union Bank of Switzerland trade-finance unit.

In Ghana Mohan won numerous awards for Standard Chartered, including Euromoney's best foreign bank for 1997, 1998 and 1999. Ghana's Chartered Institute of Marketing also named Standard Chartered, under Mohan's leadership, "Best Bank in Ghana" for 1997, 1998 and 1999. Sri Lankan-born Mohan, now a Canadian citizen, has been with Standard Chartered since 1989.

Over the past few months SCNB has been focusing on an integration programme encompassing technology, infrastructure and corporate culture.

The programme exposed bank staff to a new performance-based ethos in line with Standard Chartered's management policy, replacing the previous local management style.

Since the acquisition, the number of staff has been cut from 2,800 to 1,344. With assets of about Bt68 billion SCNB is a small bank and has handled this delicate labour issue particularly well. Offered an attractive early-retirement programme, most of the staff who were laid off left the bank with no bad feelings. "As part of the process, we have recruited between 200 [and] 250 new staff, which has helped improve productivity," said Mohan, adding that two Thais had been promoted to take over the IT department and the Internal Audit department.

Mohan says he is happy with the present size of the workforce and the nationwide network of 68 branches. He has already visited 25 branches and is about to set off on a countrywide road show to meet his staff and share his vision of how the bank should be run. SCNB inherited the 130,000-customer base of the old Nakornthon Bank to build on. And last week, the bank took over the consumer-banking business of the Bangkok branch of Standard Chartered.

It has also agreed to acquire the credit-card business from the Bangkok branch for about Bt1.8 billion. This provides a quick way to grow its consumer-banking business, leaving the parent bank branch to concentrate on corporate and international banking.

"This is an integral part of Standard Chartered Nakornthon's plan to capture a much larger market share of the Thai credit-card sector. It is an excellent platform upon which to grow business," Mohan told his staff last week.

"It also fits in perfectly with the group's overall plan to have Standard Chartered's Bangkok branch focus primarily on the wholesale-banking business while Standard Chartered Nakornthon concentrates on the retail business," he added.

Previously SCNB did not have a credit-card business, and if it had had to build a credit-card service itself it would have required considerable investment in technology, marketing people and time. It would also have taken several years before it would have been in a position to make a profit.

"To give you an example," he said, "the trading profit of Standard Chartered Bank's card business in 1999 was Bt49 million.

"The purchase will also give us an immediate client base of more than 100,000 cardholders and the ability to offer a complete credit-card service. It will make the bank more competitive in the sector, offering us valuable opportunities for cross-selling of the bank's products and services."

Mohan sees technology as the driving force in banking. He was surprised to learn that out of 35 million Thais who have bank accounts only 12 million have ATM cards. This shows that most bank customers still prefer over-the-counter banking, face to face with bank tellers - a costly exercise for the banks.

"We should encourage people to use the machines," he said.


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