Standard Chartered processes over CNY 10 bn in cross border lending
10 October 2013, Shanghai – Standard Chartered Bank (China) Limited (“Standard Chartered China”) today announced that it has recently completed a CNY 2.5 billion cross-border lending deal for Nokia Siemens Networks (China) Ltd (“NSN China”), an international mobile broadband specialist.
The RMB cross-border lending deal enables NSN China to lend within the quota of CNY 2.5 billion to their offshore related companies with a tenor of one year. Through this loan, NSN China can include the RMB into its portfolio of working capital currencies to better manage their global liquidity positions and streamline its treasury operations. To date, NSN China has completed two RMB cross-border lending drawdowns amounting to CNY 500 million.
This is the seventh RMB cross-border lending deal completed by Standard Chartered within three months after “The Circular on Simplification of Cross-border Renminbi Business Process and Completion of Related Policies” (“the Circular”) was announced by the People’s Bank of China (“PBoC”). Within this short span of time, the total RMB cross-border lending amount processed by Standard Chartered China has exceeded CNY 10 billion.
Cross border loans are a natural progression for corporates which have accumulated liquidity through a period of conducting cross border trade with China. Standard Chartered is the first foreign bank to complete the RMB cross-border lending deal on behalf of a corporate. Over the past quarter, Standard Chartered has completed RMB cross-border lending deals for seven corporate clients. These clients include Multinationals and large domestic enterprises, covering a variety of sectors that include automobile manufacturing, electronic products, industrial materials, watch retail, etc.
Johnny Ho, Head of Regional Treasury Centre, Greater China & Japan, Nokia Siemens Networks (China) Ltd, said, “ RMB cross-border lending opens a channel for the movement of onshore RMB liquidity offshore. The Circular announced by PBoC offers corporates increased liberty and flexibility when conducting business transactions in the RMB. Through cross-border lending, we achieved centralised management and effective use of funds at the group level, and significantly reduced finance cost. We look forward to continued introduction of policies that bring about greater convenience for enterprises doing business in and with China.”
In addition to RMB cross-border lending business, the Circular also significantly simplified the process of RMB cross-border settlement. After the Circular was announced, Standard Chartered China introduced a web-banking service for clients to achieve paperless processing and real-time collection for RMB trade settlement. Standard Chartered China’s RMB cross-border settlement volume has grown over 50% after the circular was released.
Sridhar Kanthadai, Regional Head of Transaction Banking for North Asia, Standard Chartered, said, “We have seen a significant growth in interest and client discussions on how to best tap on the potential benefits the recent circular offers. Today’s announcement is testament to our client centric commitment to build on our advisory capabilities, unparalleled network and understanding of the latest regulatory developments to help clients take advantage of opportunities and benefits presented by the internationalisation of the RMB.”