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Pakistan
Standard Chartered Bank
No provider collected more responses in Karachi than Stand-
ard Chartered, and no bank has achieved a higher score either.
In most service areas it clears the global as well as the local
benchmarks, and the overall score is up by an eighth on last
year. In the core products of settlement, income collection and
corporate actions notifications, the bank touches excellence.
There is not much wrong with perceptions of the client service
or the relationship management either, though a careful reading
indicates an appetite for greater flexibility.
Like every custodian in this survey, Standard Chartered shines
less brightly in matters of cash, FX and credit spreads and daily
liquidity.
The commitment of the bank to this market is not in doubt.
Standard Chartered owns a sizeable retail and corporate bank-
ing franchise here, which was much enlarged by the merger of
its own operations with those of Union Bank back in 2006.
Deutsche Bank
The overall outcome is little changed by comparison with 2017.
The bank is also doing best (notably settlement and technology)
and worst (especially pricing) in much the same areas, though
there is a striking improvement in asset servicing. Though it
would be daring to place too much reliance on the assessments
of such a limited number of respondents, the findings do suggest
that Deutsche has weathered the challenges it encountered at
the time of the return of Pakistan to the MSCI emerging market
index, and which were an issue in the survey last year.
Like other custodian networks, the German bank can rely to
some extent on its regional hub in Dubai to manage the capacity
issues created by the characteristic booms-and-busts of smaller
emerging markets. It is telling that the bank collects some of its
best scores for non-bureaucratic account management, keeping
cash and securities safely, managing the settlement process and
providing stable and robust technology.
Citi
Average scores are down for a second year in succession, and to
levels that indicate a need for change in most areas. But then the
last 12 months were challenging ones for any direct clearing and
custody agent servicing broker-dealers in Karachi. Back in 2016
Pakistan was the top-performing market in Asia. This helped
to prompt the restoration of the country to the MSCI emerging
market index in May 2017 after a nine-year absence. In theory,
that should have halted the profit-taking sell-off by foreign in-
vestors and led to a sustained bull market on the back of a surge
of inbound indexed investment portfolio flows. It was, in fact,
followed by a continuous decline in the Karachi Stock Exchange
100 (KSE 100) that did not halt till December, and the market
has traced a volatile path ever since.
Importantly, the detailed scores underline that throughout this
period, Citi Karachi has continued to deliver the basics of the
clearing business – settlement, meeting cash needs, opening and
closing accounts, robust technology and avoiding compliance
problems – with aplomb.
WEIGHTED AVERAGE SCORES
Standard Chartered Bank
Deutsche Bank
Citi
Market Average Global Average
Share of validated responses (%) 47% 21% 32% Relationship management 5.24 5.69 4.52 5.10 5.30
Client service 5.48 5.85 4.67 5.34 5.56
Account management 5.51 5.23 4.46 5.16 5.14
Asset safety 4.15 3.88 3.42 3.91 4.60
Risk management 5.59 4.92 4.47 5.13 5.50
Liquidity management 5.52 4.55 3.94 4.82 5.14
Regulation and compliance 4.33 4.56 5.00 4.50 4.84
Innovation 4.39 4.17 3.91 4.29 4.75
Asset servicing 5.09 5.12 5.38 5.17 5.52
Pricing 4.80 5.40 4.33 4.78 5.28
Technology 5.43 5.00 4.88 5.18 5.41
Cash management and FX 5.65 5.55 5.21 5.51 5.42
Total 5.07 5.07 4.53 4.93 5.23
74
Global Custodian
Winter 2018