Bulking up

Standard Chartered: While many Western rivals are reducing exposure to volatile investment banking, Standard Chartered is to boost trading and dealmaking with 1,800 new hires. It hopes to double annual revenues from this part of its empire from $3.3 billion currently. That's ambitious, but with emerging market business proving resilient, StanChart's plan looks sound.

The need to attract new staff may also be one reason StanChart declined to join UK efforts to control bankers' pay packages. It can be seen why an agreement on bankers' bonuses - if it is needed at all - has to work within an international context. StanChart is hiring with its eyes firmly on the fast-growing Asian markets. Controls that attempt to outlaw rewards for failure in the West may needless truss other bankers in other markets.

This won't be StanChart's first push into investment banking. Brave earlier decisions, in 2008 and 2009, to hire bankers heading out of bigger institutions, are bearing fruit. It is one of the few lenders making more in investment banking today than it did before the crisis.

OK, so it has grown from a small base. But this year it has notched up roles advising BP on its $30 billion divestment programme and Bharti Airtel of India on its $11 billion purchase of Zain Africa. Record-breaking deals in both India and Malaysia in recent months - such as the $3.8 billion IPO of Coal India and the $3.4 billion IPO of Petronas Chemicals - bode well for further dealmaking. China also offers an array of new revenue streams. StanChart advised McDonalds on the first yuan-denominated bond issue by an overseas non-financial company. Work hedging exposure to the Chinese currency is also proving lucrative.

Of course, more revenue doesn't automatically translate into profit. Nor will StanChart be picking up bankers at the bottom of the market, as it was in 2008. Competition for Asian talent is keen. Furthermore, expanding into Asia after many of the region's stock markets more than doubled in value is not without risks. However, StanChart has so far adopted a cautious and considered approach to the build-out of its investment bank. Investors should be cheered.