"Right or wrong, everyone draws the conclusion that this is the decade of China rising," said Tee Chong Ong, Standard Bank's new head of structured trade finance for Asia.
Whether or not we've entered a new Chinese era is debatable, what's not is the country's increased trade flows with Africa -- Standard Bank's niche. "With anything that touches Africa, Standard Bank has a great advantage," said Ong, who plans to use that advantage to become the bank of choice in Asia when it comes to Africa.
The Singapore native joined Standard Bank in August after five years at Standard Chartered Bank. He is responsible for building and improving the South African institution's structured trade team in the region with an emphasis on China.
Ong reports directly to Standard Bank's Hong Kong-based Asia chief executive Andrew King and to South Africa-based global head of structured trade Craig Polkinghorne. He also works closely with Beijing-based Craig Bond, the bank's China chief executive.
Structured trade is an important product when dealing with emerging markets. Typically used with commodities or when there is, in Ong's words, a lack of "mutual understanding" between the parties, structured financing includes more complex structures, often syndicated, and allows users to shift the burden of risk to the bank who then closely monitors the transaction.
"It's a question of having better control of where the funds flow and capturing the funds when the company makes a sale," said Ong. During our conversation, he repeatedly emphasised that it's "not rocket science", though spent more than 15 minutes describing structured trade financing.
The addition of an Asia-Pacific structured trade head is just one sign of Standard Bank's growth in the region. Since Industrial and Commercial Bank of China (ICBC) took a $5.5 billion equity stake in the bank in 2008, Standard Bank has been building its team in the region and has opened offices in Beijing and Shanghai. In addition to its traditional trade finance businesses, Bond recently said that Standard Bank has experienced especially strong demand for its project finance business and is growing that segment as well.
This is a good time for the bank to be expanding in Asia. China's economic growth requires an enormous amount of raw materials and Standard Bank, whose specialties included Africa and metals and mining, is especially poised to meet those needs. According to China's Ministry of Commerce, Sino-African trade totalled $106.8 billion in 2008, up more than 10-fold from the beginning of the decade.
Ong's experience in structured trade should certainly help Standard Bank grow. When asked why he moved to the bank, Ong said it was for the "excitement" of Africa. "When you get too comfortable in a job you can get overconfident. That's when it's time for a change," he said, suggesting, though not saying, that he had gotten too comfortable at Standard Chartered.
Prior to Ong's five years at Standard Chartered as managing director of structured trade finance for Asia-Pacific, he worked as a chief financial officer at Indonesia's Asia-Pacific Resources International, learning the ins and outs of trade finance from the customer's perspective. Before that he worked in various banking roles related to financing.
Ong adds a critical link in Standard' Banks emerging market knowledge. "I told my boss I understand business in Asia; I understand the culture and appreciate how business is conducted,'" said Ong. "But for anything on Africa I need to depend on my colleagues. [Together] we create a team."
Not more than three months into the job, Ong is already looking to add two additional people to the structured trade team in Beijing. Currently he oversees a structured trade team of 10 (not including himself) spread between Beijing, Hong Kong, Shanghai and Singapore.
Despite Standard Bank's ambitions, there are potential obstacles ahead. HSBC and Standard Chartered are both significant players in Africa and China, and other majors, including Citi, are looking to expand their trade finance activities in these regions. What is likely to boost the comparatively small Standard Bank is its link to ICBC and other Chinese financial institutions; this gives it an edge that other institutions lack.