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Wealth Lending for greater financial flexibility

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Wealth Lending for greater financial flexibility

Our secured Wealth Lending facility is an asset-backed lending arrangement designed to provide you with greater liquidity by securing against financial assets held with us, whilst providing you with flexibility as to how you choose to utilise the funds and how you manage repayments.

What is secured Wealth Lending?

What are the benefits?

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What is secured Wealth Lending?

Our secured Wealth Lending facility is a credit solution offered against financial assets held with and acceptable to Standard Chartered Bank up to a percentage of their prevailing market value.

  • Make your investments work harder for you
      • A secured Wealth Lending facility can provide you with greater liquidity by securing against multiple financial assets held with the Bank
      • The increased liquidity gives you the option to choose how you would like to use the facility, to explore new investment opportunities or for your personal needs
      • It allows you the flexibility to choose from a wide range of currencies including US Dollar (USD), British Pound (GBP) and Euro

    • Your available credit limit under this facility will be determined based on a range of factors such as the type of financial assets you use as security together with their prevailing market value and the concentration of the financial assets within your portfolio held with the Bank1.

Financial markets analysis

What are the benefits?

Our secured Wealth Lending facility is a credit solution offered against financial assets held with and acceptable to Standard Chartered Bank up to a percentage of their prevailing market value.

  • Potential of secured Wealth Lending
    • Benefits of secured Wealth Lending:
      • Unlock the value of your existing investments
      • Enhance portfolio returns and also hedge risks
      • Improve personal liquidity position with no restriction on use of the facility
      • Attractive lending rates
      • Tailored to meet your financial needs
      • Flexibility to choose when you wish to repay the facility
    • You can borrow against the following asset types2:
      • Cash Deposits
      • Equities
      • Exchange Traded Funds
      • Bonds
      • Mutual Funds
      • Signature Discretionary Portfolios
      • Structured Products
      • Fixed Maturity Plans

       

How does it work?

Investment without Secured Wealth Lending

Let us assume that you have invested USD100,000 into a Mutual Fund. The Mutual Fund pays an approximate income of 4% per annum and achieves a capital gain of 2%. Your annual return on capital would be 6%.

Capital
Income
Capital gain
Annual Return
USD100,000 USD4,000 (4% p.a. of USD100,000) USD2,000 (2% of USD100,000) USD6,000
Investment with Secured Wealth Lending
Capital
Income
Capital gain
Annual Return
Credit Facility Interest
USD100,000 USD4,000 (4% p.a. of USD100,000) USD2,000 (2% of USD100,000) USD6,000 2.5% p.a.

Through Secured Wealth Lending, assuming the invested Mutual Fund has a Loan-to-value (LTV) of 70%, you can avail a credit facility of USD70,000 against the investment (2.5% interest rate is for illustrative purposes only).

You can use the credit facility of USD70,000 to invest into the same or into a different investment. Assuming you proceeded to purchase the same Mutual Fund that pays an approximate income of 4% per annum.

You could have USD170,000 invested in the same mutual fund earning 4% p.a.

Subject to market conditions, Secured Wealth Lending may increase your potential gains or magnitude of loss as compared to investing without Secured Wealth Lending, as illustrated in the scenarios below2.

Scenarios
Income
+
Capital gain
–
Annual Interest
=
Annual Return
Scenario 1 USD6,800 (4% p.a. of USD170,000) + USD3,400 (2% of USD170,000) – USD1,750 (2.5% of USD70,000) = USD8,450
Scenarios
Income
+
Capital gain
–
Annual Interest
=
Annual Return
Scenario 2 USD6,800 (4% p.a. of USD170,000) + (USD3,400) (-2% of USD170,000) – USD1,750 (2.5% of USD70,000) = USD1,650
Scenarios
Income
+
Capital loss
–
Annual Interest
=
Annual loss
Scenario 3 USD0 (Not applicable) + (USD3,400) (-2% of USD170,000) – USD1,750 (2.5% of USD70,000) = (USD5,150)
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Footnote

Risks of Secured Wealth Lending

Market risks
Depending on market conditions, the value of your collateral may fall. You may then be called upon to “top up” your collateral by substantial amounts or to repay your outstanding credit facility at short notice. If you fail to do so, the Bank may have to liquidate your collateral at a loss to repay any amount outstanding and you would be liable for any amounts still owing subsequently.

Interest rate risks
The interest rate of your credit facility may increase, resulting in a higher interest payment amount for the facility. An increase in interest rate will in turn reduce the return on any investment.

Foreign exchange risks
Your credit facility may be subject to additional foreign exchange risks if it is taken in a different currency other than that of your collateral. If the exchange rate moves against you, the repayment amount of the facility may be affected and/or you may be required to “top up” your collateral.

Change in credit Loan-to-value (LTV) ratio
LTV ratios are subject to periodic review and may change within a short period of time. When the LTV of your collateral is reduced, you will need to have sufficient liquidity to reduce or repay your outstanding credit facility or pledge additional collateral as security for the credit facility.

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