Expert: Chinas banks be well prepared before go globally

    By Wu Ye, Feng Yanqiang     BEIJING, June 12 (Xinhuanet) -- Chinese banks need to find good answers to three questions before expanding globally, said Peter Sands, Group Chief Executive of Standard Chartered.     "It is necessary and inevitable for Chinese banks to expand globally in the context of globalization," he said. "However, to be successful in international expansion requires good answers to three questions: why we expand international; where we expand to; how we are going," said Sands during the Spring Membership Meeting of the Institute of International Finance Thursday.     According to Sands, the best and the compelling reason for Chinese banks to go globally is to meet the need of clients as Chinese companies and individuals increasingly invest in global market and do more international trade.     Those clients need services from banks which have international networks. Following the clients is a sensible choice of banks. The worst answer to the first question is to fulfill the personal ambition of leaders of banks by wasting shareholders' money, he added.     Referring to the places to invest for Chinese banks, Sands believed, they need to go "where their clients go." The opportunity exists at every corner of the world, but priority is very necessary. Sometimes, the best place to go is a place other banks have not gone to because the competition is comparatively less.     In Sands' opinion, there are totally three ways for banks to enter a new area: building branches, acquiring local banks and creating strategic partnership with local banks. Each mode both has advantages and disadvantages. Therefore, he noted, Chinese banks need to choose the right mode according to a clear sense of reality.     Sands also highly praised the partnership between China's Industrial and Commercial Bank of China (ICBC) and South Africa Standard Bank -- the largest commercial bank in Africa, with more than 1,000 branches across the continent. ICBC bought a 20-percent stake in the bank in 2008 and became the top shareholder of the Johannesburg-listed bank.     At the end of Sands' speech, he told Chinese banks to recognize that the political attitude towards international banking has changed because of the crisis. "Many policy makers are more suspicious of international banks," he warned. Special Report:  Global Financial Crisis