(London) – Standard Chartered is exploring the possibility of selling its wealth and retail banking businesses in Botswana, Uganda, and Zambia as part of a broader strategy to reduce costs and restructure its operations.
The bank announced its plans on Wednesday, stating that it was looking to divest from certain African markets to focus more on affluent individual customers and international businesses, which generate higher fee income. This move is aligned with the bank’s ongoing efforts to streamline its operations and concentrate on core businesses, particularly in fast-growing Asian markets.
Standard Chartered, like its competitor HSBC, has been shifting away from its global operations to concentrate on profitable sectors, including wealth management and banking services for high-net-worth individuals. The bank is looking to double its investments in wealth management, while scaling back its retail banking activities in regions where it sees less potential for growth.
The planned exits in Africa represent the first steps in a wider plan to reduce the bank’s retail operations in some markets. This restructuring effort aims to save the bank approximately $1.5 billion (around KSh 222 billion) over the next three years. While the changes are expected to lead to some savings, the bank noted that the financial impact of the potential business sales would not be significant.
Standard Chartered has benefited recently from higher borrowing costs and a resilient wealth management sector, particularly in Asia, which has seen strong economic growth. However, the bank’s efforts to reduce costs come at a time when inflationary pressures are rising, and business expansion costs are increasing.
In its third-quarter earnings announcement in October, the bank revealed it was looking at opportunities to sell off businesses where the strategic benefits were unclear. Despite the restructuring efforts, Standard Chartered’s shares in London saw a slight increase of 0.1%, while its Hong Kong-listed shares rose by 0.2%.