Standard Chartered Bank to offer Yuan deposits this year

EXCLUSIVE: The British bank plans to replicate in Singapore the success of its Hong Kong branch in offering Yuan (CNY) or Remninbi (RMB) deposit products amid rosy growth prospects for China and expectation of its currency revaluation.

“We are looking to similarly offer RMB deposit accounts to our customers and clients in Singapore this year. It will be introduced in phases – first to our Private Banking clients and then to retail customers,” Andrew Chia, Standard Chartered Bank (SCB) Regional Head of Wealth Management for Singapore and Southeast Asia told Singapore Business Review.

The bank’s regional spokesperson noted that the plan was inspired by the positive response that SCB received from its first offering of deposit products in Chinese currency in Hong Kong last year. From January to June 2010, Mr. Chia said that SCB Hongkong RMB deposits increased by 142%, which is far ahead of the overall market growth of 65%.

SCB was the first bank in Hong Kong to facilitate a RMB denominated trade locally.

Strong demand for Yuan-denominated products according to Mr. Chia is driven by China’s economic growth fundamentals remain intact.

“There is a growing trend of consumer spending and demand increasingly playing a larger role in terms of its contribution to driving overall economic growth,” the bank’s spokesperson adding that SCB expects China to post 8.5% year-on-year GDP growth this year and 9% growth in 2012 – just a tad lower than the 10% growth recorded in 2010.

On the currency front, SCB believes that there is mounting external pressure for China to further revalue the Yuan. The bank though expects revaluation of Yuan to be gradual and mild so as to avoid excessive near term disruptions or shocks to the economy.

“Standard Chartered Bank expects the USDCNY rate to move to 6.05 by 2012 from approximately 6.60 now (that is, approximately 8.3% appreciation only),” Mr. Chia said.

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