Taipei Times (TT): What has been the biggest challenge during the integration between Standard Chartered and Hsinchu International Bank (新竹商銀)?
James McCabe: There's an initial integration when you do an acquisition -- just kind of like a discovery process, where an integration team has been put together and figures out what's what, who's who. Then you start to bring in policy procedures, embracing the way local banks are doing things because this is an international bank that came to Taiwan really to become a very large local player after having been just a small foreign bank. So, there's a lot going on in the early stages combining your systems. And you have [what] we called "amalgamation" -- through merger, you put two businesses together.
On July 1, we merged the Standard Chartered Bank operation with Hsinchu operation to a new entity: Standard Chartered Bank Taiwan. In some cases, some people called that the end of integration, or "project." Integration is a journey, not really a project. And like any journey, it has many phases to it.
A very important phase is amalgamation: when you combine the bank, its customers and staffs. The regulators were extremely supportive of everything we've done so far. But then that journey continues and has continued as one bank because there are constantly things to learn from both sides, to upgrade and to continue developing. So, the first phase of integration has been a big success. But I think it's important for people to realize the journey will take a long time. What we are doing is revolutionary here in Taiwan. The combination of two cultures, two very different ways of doing things.
TT: How different?
McCabe: Some of the differences are obvious [and] some of the differences are more subtle. You have to deal with all of that. Basically, a foreign bank did not have access to the entire Taiwan market and all Taiwanese customers, so they tended to do what they have most access to, which would typically be larger companies and international elements of financing.
In our consumer banking side, it was more of the big cities or with a certain client segment because if there's only one branch or two branches, they can only do so much. But once you have the opportunities to embrace the entire nation through a nationwide 86-branch network, your dream is a bigger dream. Your opportunity is a bigger opportunity. Your journey is a longer journey and that's where we are now.
TT: What will make the journey successful?
McCabe: When we are embraced by our customers and when the community we're in gets the feeling that we are adding value and a good citizen. We are not a narrowly focused bank that only works with a few people. And we don't want to lose the feeling and reputation that Hsinchu International Bank had in its community. We want to show that community that we are as interested in them and still engaged with them and provide them with things even Hsinchu couldn't provide. So, we're not trying to change. We're trying to improve.
TT: A year go, some people said you had dug gold in the corporate clientele while others said you've overpaid for Hsinchu International Bank. How would you respond to those comments one year on?
McCabe: In just two years time, the acquisition will be successful enough. We'll be making enough money that adds value to the overall results of Standard Chartered Bank. And the investment will return a double digit rate of return. We reiterated the same confidence and focus. Everything we said on day one continues to be on track. In our merger acquisition, we acquired a good bank with good customers and reputation. We're not trying to resurrect somebody from the dead. This bank was very alive and in a good shape. All we're doing is combining our talents with their talents. It has to represent to the customers something more.