Standard Chartered has announced its withdrawal from Zimbabwe as well as Angola, Cameroon, Gambia, Jordan, Lebanon and Sierra Leone. In addition, the bank will reduce its operations in Tanzania and Ivory Coast, focusing only on corporate banking services. The reason for the complete departure (and reduction) of those markets, according to a Reuters report, they accounted for just 1% of Standard Chartered’s total revenue for 2021.
“We are focusing more on the most important growth opportunities while simplifying our activities. We remain excited about a number of opportunities we see in the AME region, as illustrated by our new markets, but remain disciplined in our assessment of areas where we can deliver significantly improved shareholder returns. 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. »
Bill Winters, Chief Executive of Standard Bank (via ShareCast)
This departure from Standard Chartered puts an end to 130 years of presence in Zimbabwe and its deja vu because in 2017 Barclays chose to withdraw from the markets (including Zimbabwe) with whom he had a decades-old relationship. And just like Barclays, it won’t happen overnight.
It’s a statement of intent…
News like this is not the best as everyone will start to worry about the money they have in their Standard Chartered Bank accounts… However, the bank has a responsibility to its customers as well as the authorities local financial institutions and she would not want to smear her name or put herself in a difficult position with her clients.
Similar to what happened with Barclays, there will most likely be an exit strategy for Standard Chartered in Zimbabwe and other markets. If you recall, in the mid-2010s when Barclays decided to exit Zimbabwe, they opted to sell their outpost in the country to Malawi’s First Merchant Bank, which led to us having First Capital Bank .
It’s not (That much) It looks like Standard Chartered will go down this route, however, we can expect more details to emerge on how customers, employees and other stakeholders will proceed.
Could the closing of the branches have been a sign?
In a 2014 report by The Herald, Standard Chartered announced that it would reduce its physical presence by closing six branches and laying off 100 employees. Additionally, StanChart embarked on a digitization campaign in 2018-2019, long before the pandemic, where it offered agencyless services to its clients not only in Zimbabwe but in Ivory Coast.
Standard Chartered answers some of the questions you might have about their all-digital bank
Hindsight is 20/20 and suggests this might have been something StanChart had been pondering for some time, but we can’t know for sure. However, from a trading perspective, if a set of markets gain 1% combined, it is difficult to challenge the decision to exit.
Overheads are mounting and if there is no improvement in sight, an exit might be the only course of action. Moreover, Zimbabwe is an economic enigma that is a headache for most…
For now, we will have to wait and see what Standard Chartered’s exit strategy looks like and how it will affect its employees and customers.