Standard Chartered Bank new CEO excited; sees compelling opportunity in Sri Lanka
Senior banker Jim McCabe is the new Chief Executive Officer at Standard Chartered Bank which has played a key role in the country’s development since its establishment in 1858. McCabe joined Standard Chartered in 2000 and his service and experience span diverse geographies ranging from the Americas, South East Asia and South Asia. Previously he served as the CEO of Bangladesh, Group Head of Operations, Singapore, CEO, Taiwan, CEO, the Americas and Risk Head for North East Asia, Wholesale Banking as well President, Bank of America, Mexico.
During his tenure as CEO in Bangladesh from 2009 to 2014, McCabe oversaw a growth in trading profit of 115%. His leadership in Bangladesh delivered impressive revenue growth, elevating business and diversifying operations beyond traditional banking into sophisticated financial solutions to meet the more complex needs of corporates. In announcing McCabe’s appointment, SCB’s Regional CEO of India and South Asia Sunil Kaushal noted that McCabe’s effective leadership in Bangladesh ensured strong revenue growth for the franchise in 2014. Kaushal expressed confidence that McCabe will lead the team in Colombo with the same passion and dedication to results and service thereby the Sri Lanka team will continue to serve local enterprise and facilitate growth and financial solutions which will contribute positively to the national economic agenda.
The Daily FT recently met up with McCabe for what was his first interview in Sri Lanka since assuming office. His initial take on Sri Lanka is very realistic and admits he is taking over at a very opportune time. McCabe is highly optimistic on Sri Lanka and believes the country offers a compelling opportunity for foreign investors apart from it being a shining example for other nations. Following are excerpts:
Q: What are your initial thoughts on Sri Lanka?
A: I see that everyone is anxious as the people of this country voted for an unprecedented change on 8 January through a democratic process. I think it is laudable. I was in Bangladesh when the presidential election results were announced and people were saying ‘Why can’t we do the same democratically?’ and several countries were asking why can’t they couldn’t be like Sri Lanka. In that context Sri Lanka scored massive points for democracy.
One of the main premises was that this change would happen quickly. The Government had been committed to deliver on promises made during the election. The people in the Government I have met so far are all strongly committed to transparency, best practices and good governance. That is wonderful and is lacking in this part of the world. Sri Lanka in my opinion has the potential to be a shining example for so many other nations to follow.
But I must caution that the devil is in the detail. Seeing a consensus reached among different parties gathered for a common agenda is very challenging. President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe are committed to delivering a better nation that can play to its strengths and sustain economic growth and development by laying a sound foundation of good governance. I see that as an opportunity. We at Standard Chartered Bank are totally aligned to that goal.
We have been here since 1858 and we are here for good. We want to participate in the bright future of Sri Lanka, facilitate growth and development and add value where we can. We have a very serious and committed appetite. All of us want a conducive environment for better and more equitable growth.
Q: You took over during a period of transition as the appointment was in January 2015. The bank had a good year in 2014. Do you see the momentum continuing or have you scaled down your expectation as the country is primarily focused on politics with constitutional and electoral reforms?
A: Performance organisations never slow down. Our aspirations for the year continue to be strong. The initial months have seen priorities on good governance and there has been a slowdown. This is understandable. What we are hoping for is, as the foundations are laid, the economy will pick up and accelerate and its momentum will carry on. More so than whether we make money this month or next month, I am here to figure out whether Sri Lanka will be an attractive market over the next five years.
We are here to help promote the onshore and offshore market, not just on a transactional basis but through sustained investment flows. The road ahead won’t be perfect and there will be bumps here and there. But broadly there are signs that the rhetoric and intent of the message of 8 January will become a reality. It is much more difficult to run a country than it is to win an election. It is about many steps being taken and people seeing strong commitment and direction, enabling the country to ride the wave with the support of all parties.
By the second half of the year we hope we can talk more aggressively about the future of Sri Lanka. The point isn’t whether 2015 is going to be a great or bad year. It is about the transition year that will lay the foundation for sustainably great years in the future.
Irrespective of our results in 2015, the issue is what the momentum is going to be like in 2016. We are witnessing a nation and an economy seeing massive change and we are very excited by this.
Q: Since assuming office you may have met several clients. What was their general reaction?
A: The welcome given to me has been very warm. Clients are very excited to have someone like me with my background to steer the bank. I am glad to see the commitment from the bank to Sri Lanka through my appointment. All our clients are committed to the future. I am very pleased that the Government and public officials have been very open. I am impressed by the level of interaction and dialogue. They are open to questions and hear other people’s point of view. I believe institutions must be led by people who are credible and inspire confidence. You can’t roll out kneejerk policy changes. People need to rely and trust that what you say will continue.
Going forward, Sri Lanka has to give confidence to investors that it means what it says. I think Sri Lanka’s next steps are more important than necessarily going back and rewinding the tape and doing it all over again. There have been countries where they have spent too much time looking at the past and engaged in a blame game. This way they have lost a lot of time and opportunity. However, for a country which has averaged 6% or 7% growth there is such a strong future and there is no point delaying that. Focusing on the future pays greater dividends. Doing it right tomorrow and better tomorrow is extremely important. I am very positive overall and I hope the change voted in on 8 January will gather momentum.
Q: What exactly will you be bringing to the Sri Lankan market as Country Head? From a market perspective and from the point of view of clients what can they expect from SCB?
A: Several things. On the retail side we want to be a bank known for its quality of service, a bank they can trust and one from which they can expect exceptional service, at a fair pricing. On the corporate side, we have a wonderful group of clients. We offer all support, including our extensive network, for them to become multinational. In between those two, I see the emerging second tier corporate sector which is aspiring and looking for an institution that values their transparent and high quality operations.
When we talk about attracting FDIs, it is not only about Fortune 500 companies but there is a huge base of next-level enterprises in the US, Europe and Asia which is looking at expanding markets. The world is growing so fast, there is a new emerging segment which can be highly resourceful and effective for Sri Lanka. The country must tap into this segment. In my view Sri Lanka can be a hub, a multipurpose nation which focuses on its emerging needs as well as the markets around the country. I have seen the President and Prime Minister speaking along similar lines. Singapore is a good model to follow. The Premier has said hard work and dedication is what is required for Sri Lanka to become successful and the private sector must make it happen while the Government can facilitate this with a conducive environment. In this process greater partnership between Government and the private sector will help.
Overall, there is a need for a culture change and managing it is the hardest thing and requires superior leadership that walks the talk and is of a variety which people will trust. I believe the Government has set its sights on this. This is very exciting. In a sports analogy, we as a bank are both in the stands cheering Sri Lanka as well as ready to come down to the field and play for Sri Lanka. We see ourselves as a player and also a supporter.
What is unique about Sri Lanka is that it is easier to put your arms around it, understand it and gain a feel for the country, which is something you cannot say for example about India. Sri Lanka is easier to embrace. This is the same for investors as well. Sri Lanka has so many natural advantages. Those need to be harnessed and substantiated with good governance, transparency, trust and consistency. Such a course will make Sri Lanka a great country and I am pretty excited about the country and the future.
Q: Given your wide experience in Asia, any specific concerns you have over Sri Lanka that policymakers should be mindful of?
A: Trying to please everybody may well be avoided. The hardest thing to do is saying no. You can’t say yes to everybody all the time. One must be content with a temporary no. Since you can’t please everybody, how people manage that process is key. This is very challenging for policymakers.
For example because so many different groups played a part in the change on 8 January, they want to see themselves in the equation, to feel that they are being taken care of and not being excluded but included. That is fine but at the same there are limitations. There must be broader trust and focus. Down the road, over a period of time, all interests will be taken care of.
Q: Any advice to the private sector about seizing momentum and creating opportunity in Sri Lanka?
A: The private sector must do it for the right reasons. Time and again, businesses fail when they deviate from their core competencies, when they jump on to fads or become opportunistic about sectors or moments. Nine out of 10 times they actually don’t achieve the desired results going after temptations. If you stick to your core competencies, deepen them, broaden them and build on that platform then it helps. If private sector businesses understand what they are and what they are not, and focus on core competencies, then success could be more sustainable.
Sri Lanka has so many opportunities but if you are driven by temptations it can get you into trouble. In a high growth country such as Sri Lanka there could be a lot of things that pass by in front of you. Don’t grab all of them but pick those which fit your competency and you can add value or take on what is strategic to your business.
Q: A lot of companies found tourism an attractive proposition in post-war Sri Lanka and ventured into it. Similarly, ICT was another sector. These sectors were picked as part of diversification strategies.
A: Yes ICT is attractive since Sri Lanka has an educated population. Sri Lanka is also strategically located geographically. Though no longer cheap, Sri Lanka has the potential to enhance value addition. Being a smaller nation with good policies, Sri Lanka can be nimble and efficient. There is great scope for the ICT sector.
Sri Lanka is also an ideal and natural tourism destination. But tourism is an industry and needs good infrastructure and trained people. You may have the perfect beaches but if skill or service is absent then there is no point.
If you are not what you say you are, tourists will not come again. There are opportunities in tourism where professional training, skills and management can be offered. Sri Lanka has the people but they must be skilled and the infrastructure must be developed as well because the country is a more beautiful natural destination than Singapore for example but that country excels better in terms of service and standards. A proper master plan and effective implementation will help. It is all about doing it smarter, building trust and ensuring consistency. People want consistency. That way you can build trust.
Q: Did you ever envision that you would serve Sri Lanka?
A: Not really. Firstly I found the Bangladesh opportunity amazing. It is not about the surface but what is underneath. That is what I learnt from my stint in Bangladesh. With Sri Lanka coming on board, I am equally glad. I never dreamt of it. To be here and be part of what is going to happen I hope that is extremely exciting and I am very fortunate.
Q: What is unique about the SCB Team in Sri Lanka?
A: We have a talented team of men and women in Sri Lanka. We have a great balance in diversity. We have a genuine commitment to the market, clients and society. They thirst for more.
I hope they will embrace leadership collectively and together continue the good journey. I see an engaged team wanting and hoping as a business, as a franchise and as career that they can continue to grow and progress. That is what I have come to offer. As long as we can do it right and the circumstances allow us to do that, then that is what we want to do. That is very compelling. I do this for them – the SCB team here and for the country. So I am excited to be in Sri Lanka and proud to represent SCB. I am also very willing to play my part. There is so much good going for Sri Lanka and that is very exciting.
