If you remember, Standard Chartered left the Zimbabwean market after more than 100 years in the country. Part of the reason was that the Zimbabwean market just isn’t conducive for business as most businesses in various industries can attest.
However, the main reason had nothing to do with our little economic challenges in our little economy but rather a strategic shift in Standard Chartered.
The bank is shifting its focus towards wealthier clients and international businesses to increase its fee-based income.
Standard Chartered is slimming down its global operations to concentrate on key areas, particularly in Asia where it sees strong growth potential. This involves reducing its retail banking presence and investing more in wealth management services for affluent clients.
So, the plan is to withdraw from Africa as the first step in this streamlining strategy. It was just last month when the bank said it was looking at opportunities to sell some or all of a small number of businesses where the “strategic rationale is not sufficiently compelling”.
So, African countries getting the axe this time around include Botswana, Uganda and Zambia. StanChart says it is exploring a potential divestment of its wealth and retail banking operations in those countries.
Don’t despair though, maybe this leaves room for African banks to serve their own rather than depending on these old Western banks. That’s the hope, at least.
What I find crazy about this story is that StanChart says the financial effects of the proposed exits are not material to the group.
They are leaving multiple African markets and its financial performance will more or less be the same. The contributions of these African operations seem to have been but a rounding error. Crazy.
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What’s your take?