StanChart announces exit from five African markets
The Group is currently present 59 markets and serves clients in a further 83.
Standard Chartered will exit from five African markets in a strategic review that will reduce its presence on the continent from 15 to 10 countries.
In a statement last week, Standard Chartered said it would sell its operations in Angola, Cameroon, Zimbabwe, Gambia and Sierra Leone, besides exiting Jordan and Lebanon.
“Today the group announces a set of actions to redirect resources within its Africa and the Middle East region to those areas where it can have the greatest scale and growth potential, in order to better support its clients,” Standard Chartered said in a statement last week.
However, the banks will maintain its operations in Uganda, Kenya, Tanzania, Botswana, Mauritius, Nigeria, Zambia, Cote d’Ivoire, Egypt and Ghana.
The move follows another strategic exit by Barclays, which sold most of its stake in Africa in 2016 to reduce the risk and capital burden that came with majority ownership of the businesses.
In a statement, Standard Chartered said the decision seeks to dispose less profitable subsidiaries and simplify the group’s business which spans Africa, the Middle East, Asia, Europe and America.
The markets that will be exited generated around 1 percent of total group income in 2021 and a similar proportion of profit before tax.
Standard Chartered also indicated it would sell its retail banking businesses in Tanzania and Cote d’Ivoire, to retain only corporate and institutional banking.
“As we set out earlier in the year, we are sharpening our focus on the most significant opportunities for growth while also simplifying our business,” Standard Chartered’s chief executive Bill Winters, said, noting that the bank remains excited by a number of opportunities in Africa and the Middle East, “but remain disciplined in our assessment of where we can deliver significantly improved shareholder returns.
However, the bank indicated it would continue to serve corporate and institutional clients as well as facilitating cross-border capital flows and offshore business in all markets it is exiting using its international network.
The decisions by Barclays, earlier and now, Standard Chartered suggests that the extensive presence in some African countries had been a drag on burdening the profitable franchise.
Barclays’ decision
In 2016, Barclays cut its stake to 14.88 percent in South Africa’s Absa Group, a move in which it sought to consolidate its direct interests in multiple continental subsidiaries, some of which had been a drag-on on its profitability.
