The man with a mission

While at Sibos in Toronto, Cash&Trade caught up with Kah Chye Tan, global head of trade and working capital at Barclays Corporate. In an exclusive interview, he revealed that his aim is to help Barclays become the global trade bank Kah Chye Tan has a mission – and, if he succeeds, his bank, Barclays, will benefit. Currently, he is the global head of trade and working capital at Barclays Corporate. Based in London, he is responsible for delivering overall trade finance and short-term lending, strategy, sales and product development across Barclays’ global network. His hope, though, is to help Barclays become pre-eminent in global trade.

As one of the leading lights of banking as a whole, he was appointed chairman of the ICC Banking Commission in September 2010. He is also a founding member of the BAFT-IFSA Global Trade Industry Council as well as being a member of the WTO Trade Expert Committee.

During an interview with Cash&Trade at SIBOS in Toronto, he explained that
Barclays Bank has been at the forefront of trade finance for more than 300 years, mainly in the UK and Africa, competing with leading local and global banks.

Part of his future strategy is that Barclays should dominate the UK market in the near future. Thereafter, he would like to see it become the global trade bank and to be present in the top 10 trade cities. In the Middle East, Dubai would be a vital centre “given the important location of the emirate and our client base”.

Also, “the Dubai office is staffed with all the right talent that supports and meets the requirements of the bank’s clients in the region. The clients that benefit the most from Barclays’ expertise are mainly the multi-national corporates, larger local corporates and the financial institutions, which we serve and work with.

“We are relationship driven and not product driven. However, our relationship managers play a key role in cross-selling our products. Our aim is always to add value for our clients.

“Open account and structure trade is a growing area and Barclays will play an increasingly important role in this space globally, especially in the MENA region. We also see a growing growth in supply chain financing. On top of all this, the bank continues to invest in technology, ramping up spending in this area hugely over the past 12 months.”

Prior to joining Barclays in 2011, Tan spent six years at Standard Chartered Bank as global head of corporate trade and cash. With more than 20 years of banking experience, he has also worked for Deutsche, JPMorgan Chase and Citibank.

Tan was no stranger to Toronto, where he was at High School. Then he went to Dalhousie University in Halifax to study business. Thereafter, he gained a scholarship that led him to study for an MBA, and, ultimately, made him decide on a career in banking.

He has been involved in trade since the early 1990s and has seen it evolve from document-driven processes to an IT-enabled service. At the same time, he has observed the growth of Asia’s fast-growing exporting nations, playing his own role in financing their aspirations.

Now, his brief is to “build the global franchise” of Barclays. But, first, “We want to absolutely dominate UK trade. When anyone wants to buy or sell anything domestically or on a cross-border basis, we want Barclays to be the first port of call.”

Beyond the UK, Barclays is strong in a number of different countries, where Tan will also focus efforts. “Building the global franchise means being present where it makes the biggest difference to our clients. That is in the top 10 or 12 trading cities in the world, including New York, London, Frankfurt, Johannesburg, Dubai, Mumbai, Singapore, Hong Kong, and Shanghai. When we firmly cover those, we’ll be a true global bank.”

On the subject of Basel III, Tan told Sibos that large trade finance banks could be faced with huge increases in capital requirements if it was implemented in its current form. He was speaking in a debate that focused on Basel III and its impact on trade finance and the world economy.

A topic of concern among the panellists was the proposed calculation for leverage ratio that requires a 100 per cent credit conversion factor (CCF) to some off-balance sheet items, including standby letters of credit (LC) and trade LCs.
Management of the CCF is an issue for Tan, who said if banks reckoned 10 per cent was reasonable to set against the CCF, the large banks that can have up to $50bn of contingency would have to raise an average of $5bn.

He added that Basel in its various numerical guises had been around for 20 years, yet it took the financial crisis to galvanise financial institutions into providing the empirical data necessary to demonstrate to regulators the issues around the 100 per cent CCF proposal.

“We are still hearing banks don’t have enough data,” he said. “Why has it taken 20 years to get the data together to prove to regulators that trade finance is a low-risk business? We have not been pooling the right data and now is the time to do it. We cannot keep blaming Basel itself.”