AFRICA – Standard Chartered Plc has announced the commencement of a strategic move to fully exit some African and Middle East markets.
The bank in a statement said the markets are Cameroon, Gambia, Angola, Zimbabwe, Sierra Leone and two other markets in the Middle East.
The multinational’s presence in Africa will drop to 10 from the current 15 countries. It will continue operating in Kenya, Tanzania, Botswana, Mauritius, Uganda, Nigeria, Zambia, Cote d’Ivoire, Egypt and Ghana.
In Tanzania and Cote d’Ivoire, the retail banking business consumer, private and business banking will be sold, and only corporate, commercial and institutional banking will be retained.
The global banking group said the planned exits will enable it redirect resources to markets where it has the greatest potential to grow and scale.
StanChart says its decision is aimed at disposing of less profitable subsidiaries and simplifying the group business which spans Africa, the Middle East, Asia, Europe and America.
The planned exit is, however, subject to regulatory approval, the bank said.
The banking group’s Chief Executive Officer, Bill Winters, explained that the bank is sharpening its focus on the most significant opportunities for growth while also simplifying its business.
“We remain excited by a number of opportunities we see in the AME region, as illustrated by our new markets, but remain disciplined in our assessment of where we can deliver significantly improved shareholder returns,” he said.
“Collectively, our actions will position the AME franchise for the next phase of growth after a very strong 2021 performance. We are grateful to our colleagues and partners in each of these impacted markets for their hard work and dedication and are committed to supporting them through this transition.”
StanChart says it will continue to serve corporate and institutional clients and facilitate cross-border capital flows and offshore business in all the markets it is exiting using its international network.
The decisions by Barclays and Stanchart show that having an extensive African franchise has less benefit as most subsidiaries struggle and only a few generate most of the profits.
The move follows its rival Barclays Plc, which sold most of its stake in its African operations starting in 2016 to reduce the risk and capital burden that came with majority ownership of the businesses.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE HERE
