The Chartered Bank joined the HKGCC as a founder member just two years after setting up a branch in Hong Kong. The origin of The Chartered Bank -- the longest established bank in Hong Kong -- is steeped in the historical and political events in the mid-1800s. It owes its existence to a far-sighted Scot named James Wilson, a Member of Parliament, a keen businessman, and the founder of The Economist -- still one of the world's leading journals.
The name Standard Chartered comes from the two original banks from which it was founded ? The Chartered Bank of India, Australia and China, and The Standard Bank of British South Africa.
The Chartered Bank was founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853, while The Standard Bank was founded in the Cape Province of South Africa in 1862 by John Paterson. Both companies were keen to capitalise on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods from Europe to the East and to Africa.
In those early years, both banks prospered. Chartered opened its first branches in Bombay, Calcutta and Shanghai in 1858, followed by Hong Kong and Singapore in 1859. With the opening of the Suez Canal in 1869 and the extension of the telegraph to China in 1871, Chartered was well placed to expand and develop its business. Traditional business was in cotton from Bombay, indigo and tea from Calcutta, rice in Burma, sugar from Java, tobacco from Sumatra, hemp in Manila and silk from Yokohama.
In South Africa, Standard, having established a considerable number of branches, was prominent in financing the development of the diamond fields of Kimberley from 1867 and later extended its network further north to the new town of Johannesburg when gold was discovered there in 1885. Half the output of the second largest gold field in the world passed through The Standard Bank on its way to London.
Both banks -- at that time still quite separate companies -- survived the First World War and the Depression, but were directly affected by the wider conflict of the Second World War in terms of loss of business and closure of branches. There were also longer term effects for both banks as countries in Asia and Africa gained their independence in the '50s and '60s.
Each acquired other small banks along the way and spread their networks further. In 1969, the decision was made by Chartered and by Standard to undergo a friendly merger. They decided to counterbalance their network with expansion in Europe and the United States. Further expansion also took place in Standard Chartered's traditional markets in Asia and Africa. All appeared to be going well, when a hostile takeover bid was made for the group by Lloyds Bank of the United Kingdom in 1986.
When the bid was defeated, Standard Chartered entered a period of change. Like many British banks, provisions had to be made against third world debt exposure and against loans to corporations and entrepreneurs who could not meet their commitments. Standard Chartered began a series of divestments notably in the United States and South Africa, and also entered into a number of asset sales. In mid 1993, Sir Patrick Gillam became Chairman. He made it clear that Standard Chartered would grow and develop its strong franchises in Asia, the Middle East and Africa using its operations in the United Kingdom and North America to provide customers with a bridge between these markets. Secondly, it would focus on consumer, corporate and institutional banking, and on the provision of treasury services ? areas in which the group had particular strength and expertise.
In August 2000, the US$1.34 billion acquisition of Grindlays Bank was completed. This made Standard Chartered the leading international bank in India and the other countries of South Asia, strengthened the group's competitive position in the Middle East and brought to the group a respected private banking business.
In September 2000 the group agreed to acquire Chase's Hong Kong consumer banking business for US$1.32 billion, which makes Standard Chartered the leader in Hong Kong cards. At that time it was also announced that Chartered Trust had been sold to Lloyds TSB for ?627 million