Financial crisis 'far from over', says UK bank chief

The financial crisis is far from over but will take only a moderate toll on fast-growing emerging economies in Asia and elsewhere as they continue to boom in the years ahead, the chief executive of British bank Standard Chartered said today.

Increasing reliance on domestic demand and regional trade rather than on exports to developed countries will help Asia weather slowing demand and credit losses in the West, CEO Peter Sands told reporters in Hong Kong.

“In the West we have a financial crisis that is in full swing and from my perspective is far from over,” said Mr Sands.

“I wouldn’t say that Asia will be immune to all the consequences of the credit crunch in the West ... what we will see in Asia is a moderation of the growth but not an interruption of economic growth.”

Asia’s economies, he said, would slow to growth rates that are “still much faster than Western economies ... have seen in recent decades”.

Emerging country companies also wouldn’t undergo the same “massive deleveraging” as those in the West, he added.

So far, Standard Chartered has not seen a worsening of its credit holdings from the credit problems engulfing many US and European firms, he said.

Standard Chartered PLC, which has market capitalisation of $35.5bn (€25.2bn), is known for its focus on emerging markets and gets some 90% of revenues from Asia, the Middle East and Africa.

Last month, the company reported a 32% rise in half-year profit, with strong growth in all regions except for the Americas and Europe, which saw losses.

Earlier this week, Standard Chartered along with HSBC won approval from the State Bank of Vietnam to become the first foreign banks to open their wholly owned entities in the communist country.