Standard Chartered starts process to sell retail, wealth businesses
The Standard Chartered bank logo is seen at their headquarters in London, Britain, July 26, 2022. PHOTO/ REUTER
What you need to know:
- Standard Chartered says the process of selling its retail and wealth businesses is expected to be completed in about 18 to 24 months
Standard Chartered Uganda has said it has started a process in which it will sell its retail and wealth businesses.
The announcement, which is pending regulatory approval, comes after Standard Chartered Group announced a process in which it would divest its wealth and retail banking operations in Uganda, Botswana, and Zambia to refocus on affluent clients.
Speaking in a press briefing in Kampala yesterday, Mr Sanjay Rughani, the Standard Chartered Uganda chief executive officer, said the process of selling the business arm of wealth and retail banking services would be completed in about 18 to 24 months, noting that the bank was also still looking for a buyer.
“We are taking a phased approach … we remain open for business; our branches and systems continue to work as normal ... we are committed to managing this process in partnership with our key stakeholders to minimise disruption for clients,” he said, noting that the sale will allow the bank to focus resources on cross-border needs of corporate and institutional banking clients.
Mr Sanjay also indicated the bank would continue to take care of its staff and current customers in the retail and wealth business until when the segment is sold off, noting that some of the staff would be absorbed in the corporate and institutional banking business, while others would be absorbed by the entity that will buy the businesses.
Dr Fred Muhumuza, a seasoned economist, said yesterday the move will refocus Standard Chartered on serving big companies, wealthy individuals, and institutions while moving away from the retail segment, a key division among most banks in Uganda.
However, he noted the new direction will need a high capital base to meet new needs of high cash-requiring customers to be able to lend to big corporations, among which include financial institutions.
“The challenge with the retail segment is that deposits are not as high as they used to be. Banks are struggling to sustain them because this comes with operational expenses [such as] administration, technology, and management, yet [new platforms such as] mobile, online, and agent banking are reigning supreme,” Dr Muhumuza said.
In a statement published yesterday, Standard Chartered Group said the sale would be the “first in a small number of potential business exits to fund incremental investment in the Group’s wealth management business,” noting that it was also aligned with its refreshed priorities that seek to accelerate income growth and returns.
Standard Chartered Group chief executive officer Bill Winters said that they would “continually assess the efficacy of our global business model and regularly take action to concentrate resources where we have the most distinctive client proposition”.
In Uganda, Standard Chartered operates three branches in Kampala, 32 automated teller machines, and 10 cash deposit machines. It also offers Agent Banking in more than 20,000 locations across the country.
Standard Chartered Bank has operated in Uganda for more than 112 years, making it the oldest bank in the country.
The move comes two years after the Standard Chartered Group, in April 2022, announced the exit from five African markets, including Angola, Cameroon, Zimbabwe, Gambia, and Sierra Leone, in addition to exiting Jordan and Lebanon.
