Standard Chartered, one of Hong Kong's biggest banks, will exit seven markets in Africa, Middle East in latest revamp

Standard Chartered, one of Hong Kong's three currency-issuing lenders, said it plans to fully exit seven markets in Africa and the Middle East and focus solely on corporate and institutional banking in two additional African markets as part of a reshaping of its business in the region.

The London-based bank, which generates much of its revenue in Asia, will seek to sell its onshore operations in Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe as part of an effort to refocus and simplify its business. It also plans to wind down its retail business in Ivory Coast and Tanzania to focus solely on commercial and investment banking.

Resources from those businesses will be redirected within the Africa and the Middle East region to areas where it can have the "greatest scale and growth potential, in order to better support its clients," the bank said.

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"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 CEO Bill Winters said in a statement. "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."

Following the exits, the bank said it would continue to serve corporate and institutional clients and facilitate cross-border capital flows and offshore business in those markets from its international network. It currently has onshore operations in 59 markets globally and serves clients in 83 markets.

The affected markets accounted for about 1 per cent of Standard Chartered's 2021 revenue and a similar proportion of profit before tax. The exits are subject to regulatory approval.

The latest revamp under Winters comes after the bank said in February it would invest US$300 million in its China business and seek to cut another US$1.3 billion in costs over the next three years as part of reaching a long-standing target of 10 per cent return on tangible equity (ROTE).

In 2019, Standard Chartered outlined plans to reach the profitability target by last year, but those efforts were thwarted by two years of Covid-19 restrictions and other fallout from the coronavirus pandemic. It achieved a ROTE of 6 per cent in 2021.

Standard Chartered Chief Executive Bill Winters speaks with media at Standard Chartered's main building in Central in October 2020. Photo: Xiaomei Chen alt=Standard Chartered Chief Executive Bill Winters speaks with media at Standard Chartered's main building in Central in October 2020. Photo: Xiaomei Chen>

"We will accelerate our execution and are implementing plans to simplify our business and sharpen our focus on where we are most differentiated," Winters said in February.

The exits come on the heels of significant investments by Standard Chartered in Africa and the Middle East in recent years, including increasing its digital banking operations in Africa. It has also expanded its footprint, opening its first branch in Saudi Arabia and receiving preliminary approval for a banking license in Egypt.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

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