Philip Panaino: “Mauritius is the key place for corporates doing business in Africa”

The Regional Treasury Centre in Mauritius set up by Standard Chartered Bank completed one year of operations in November 2014. The bank’s Regional Head of Transaction Banking for Africa takes us through its journey so far and forthcoming projects.

BUSINESSMAG. What can you say about the first year of operations of Standard Chartered’s Regional Treasury Centre in Mauritius?

As a bank, we are really excited since we’ve launched the regional treasury centre (RTC) in November 2013. The focus and growth have been phenomenal in terms of what the customers want and are expecting from us. The connectivity between Africa and Asia, with Mauritius in the centre, has been a key driver for our business.

I met with corporates in Houston who are focused around natural resources in Africa a few months ago and also met one of the largest logistics company in the world in Germany recently. The interesting part is that every single corporate, as they are driving towards greater efficiency and better control in liquidity mana-gement, is targeting Mauritius. It is the one constant element that comes up every time with each corporate, and this is a big compliment for the Mauritian leadership and vision.

If you think about it, the solid base and strong dynamics of the Mauritian economy is really key for us as it enables us to continue on this journey.

What is unique about our offering? We, at Standard Chartered, have a strong presence in both Asia and Africa. In Africa alone, we are in 15 markets – very soon to be 16 markets – and are exceptionally heavily regulated while others are moderate to easily regulated. From a liquidity management perspective, with the unique systems, technology and integration of the bank, and with Mauritius as a cornerstone of our offering to corporates, we are really able to bring about efficiency in the use of liquidity.

Being the largest bank in Africa, with our footprint in Asia, along with Mauritius at the centre, we are well positioned to create this ecosystem bringing trade partners together, which is a great success for us.

When questioned about the future and where the bank is going, I answer that there will be a continued strategic area of focus for us, where the creation of the dialogue around Mauritius resides in its positioning as a key offering in our network. Going forward, we wish to build on these perspectives.

The beauty about Mauritius is that technically it is a $13 billion economy with $12 billion of excess liquidity sitting in this market. It has got far more advantages to access the Africa growth potential with its historical and economical relationships with its neighbours on the continent – Mauritius being part of COMESA, SADC, IOR-ARC. It gives whoever operates from here a unique access to 641 million people and 1.2 Trn in GDP in Africa.

BUSINESSMAG. Has the RTC been able to meet its objectives?

It is a constant journey and demands deeper evolution. When the RTC agenda started, there was a lot of focus on bringing payment efficiency and creating a procurement hub in Mauritius. Now what we are seeing is the deepening of the financial services market to meet the demands of corporates in terms of capital raising. The offshore management companies in Mauritius are adding exceptional value to the Mauritian market and to the global corporates by explaining how to do business here.

BUSINESSMAG. How many large corporates have you attracted?

We have an exceptionally large customer base in Mauritius. We are focused on global corporates and large local corporates and even financial institutions. The Mauritian market is well positioned to serve foreign investors, African and global banks. The second step would be to look at niche markets. Our estimates for corporates doing business with the RTC are between fifty and a hundred corporates and involve the establishment of really deep treasury centres.

BUSINESSMAG. Have you obtained the desired visibility by your presence in Mauritius?

It has been successful but we intend to do more. From an Afri-can perspective, the Standard Chartered team elevates the dialogue about Mauritius with customers when it comes to liquidity management. The success of our network depends on how we market the destination and how do we further strengthen its offering through our colleagues here in Mauritius. It’s a bit of a two-pronged approach. If you are a corporate in Africa or a multinational doing business in Africa, Mauritius is the key place for you.

BUSINESSMAG. How can Mauritius better position itself in this field?

Further diplomacy to expand the agreements Mauritius has within the continent can be undertaken. Mauritius could also benefit from a quicker implementation of the actual agreements signed. One other direction to look towards would be the Renminbi. Chinese solutions in Mauritius are going to be key.

The evolution of the world and the changing mix around currency status will make Renminbi quite important for Africa. If Mauritius can leapfrog that opportunity to develop Renminbi solutions, then this will definitely be a strategic advantage for the country. We are going to work with stakeholders to position this growth faster.

BUSINESSMAG. Some Asian countries like Japan are shying away from RTCs. How do you explain this phenomenon?

When we look at what makes a RTC or hub successful, it is predominantly the political willpower to transform an economy into the financial services sector environment, and Mauritius has the intent to drive towards that.

For countries like Japan, it’s a big shift to say I want to create a RTC where there could be a greater outflow of capital. It is a difficult journey to embark upon. Mauritius does not have that baggage. The country is ten years ahead of the curve.

BUSINESSMAG. You have acquired significant banking experience in Africa. What advice can you giveto Mauritian banks wanting to be present on the continent but which are facing limitations?

Africa is one amazing continent but is made of fifty-four markets. Each one is pretty unique and different. However there are common monetary areas and a bank looking to expand should be looking at these opportunities. It is all about partnerships and dialogue. The opportunity is definitely there. It is not going to be easy. Africa is not easy but is certainly the continent of opportunities.

BUSINESSMAG. The EU recently conducted a stress test on several European banks. How about Standard Chartered’s situation?

We are one of the best capitalised banks in the world and exceptionally well diversified. We were not part of this stress test as our footprint is not necessarily centred there. However a sound financial environment is the key to the sustainability of business.