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Banking chiefs look to emerging markets for growth after credit squeeze

Banking chiefs look to emerging markets for growth after credit squeeze

Banking chiefs meeting in London on Tuesday stressed the potential for significant industry growth in emerging markets, which have been largely unaffected by the global credit crunch.
They added, however, that excessive regulation in response to the current crisis could hamper the development of these emerging markets in Asia and Africa.
While much of the first British Bankers' Association annual meeting was dominated by a discussion of the current tough trading conditions engulfing much of the world, several banking executives said the future remained bright for institutions with access to emerging markets.
HSBC Holdings PLC chairman Stephen Green said the rise, or "reawakening," of China would be one of the major factors for the industry in coming years.
"It will continue on its rapid growth," Green told members of the BBA, which represents 230 banks from around 60 countries that operate in Britain.
Barclays PLC chief executive John Varley put China, India and Russia at the top of the growth list, but warned that the development of these markets would depend on capital issuance.
"They must be in a position to continue this in the decades to come," he said, cautioning against regulation that would constrain such practices.
Varley said that British-based Barclays wants to increase its share of profits from Asia, pointing out that the bank's profits in Asia have accounted for just 5 percent of profits in the past three to four years. That rose to 9 percent last year, he said.
"We have started to move the needle, but I'd like to see that go higher over time," he said.
The state-owned China Development Bank took a 3 percent stake in Barclays last year, a development that Varley said Barclays welcomed as providing "a new leg for growth."
"That strategy remains very much in place," he said, adding that expansion could be through either global retail or its capital markets business.
Citigroup chief executive officer Vikram Pandit said that global demographic shifts indicated that most growth would come from markets including China, India and Brazil.
"Many of these people have never used financial services," Pandit said.


Updated : 2021-01-28 21:15 GMT+08:00