The Nation Newspaper

Tag: STANCHART

  • StanChart may exit non-core business segments

    Standard Chartered could exit non-core business areas in response to the potential losses in the commodities sector.

    A GTR report said the bank is believed to have up to some $61 billion in outstanding loans to commodity traders and manufacturers at a time when the prices of oil, copper, iron ore and other major components of Standard Chartered’s portfolios are hitting all-time low.

    Economists at Macquarie, the Australian Bank, became the latest to forecast gloomy times ahead for Standard Chartered, with analysts predicting cumulative losses of almost $6 billion – about the same amount as a year’s profits.

    While reiterating the bank’s stance of not responding to individual analysts’ notes, a Standard Chartered spokesperson in Singapore told GTR that the bank has hiked up diligence and has the capability of absorbing any losses. They also said it is open to “exiting or reconfiguring non-core and underperforming businesses”.

    Many banks are expected to incur heavy losses due to the collapse in commodities markets. However, a series of research notes have predicted that the British-based bank will be hit hardest. “StanChart will suffer from a combination of commodity finance-related defaults and revenue pressure, in our view,” said the authors of the Macquarie report.

  • StanChart targets Nigeria, others for Africa retail growth

    Standard Chartered Plc (StanChart) expects to open 100 new branches in Africa by 2016 to benefit from the continent’s $1 trillion annual retail spending,it has said. The lender will be focusing in key African countries, including Nigeria, where only about 14 to 15 per cent of the population has bank accounts.

    The lender opened 27 new outlets last year and will “invest heavily” in digital technology over the next four years, Raheel Ahmed, the bank’s Dubai-based head of consumer banking for the Middle East, Africa and Pakistan, has said. The bank will focus on small and medium-sized companies and private banking, he said.

    “There is so much growth potential, particularly where economies are growing rapidly,” Ahmed said.

    “In Nigeria, only 14 or 15 per cent of the people have bank accounts,” he said.

    StanChart’s operating revenue at its Africa consumer banking unit rose 9.4 per cent in the first half to $257 million. Economic growth in Sub-Saharan Africa will accelerate to 5.1 per cent this year and 5.9 per cent next year from 4.9 per cent in 2012, according to the International Monetary Fund.

    The bank posted a 24 per cent drop in first-half profit to $2.18 billion after a $1 billion write-down of its Korean business. Revenue rose 6.6 per cent as growth in Hong Kong and India helped offset declines in Korea, Singapore and China.

    Its income from retail banking in Africa, including credit cards and personal loans, is growing helped by expansion in Kenya and Botswana, Ahmed said. Income in Ghana grew 32 per cent and in Zambia by 45 per cent in the first half, he said. The bank has a “high single digit” market share in consumer banking in most countries on the continent in which it operates and more than 10 per cent in some, he said.

    The bank also expects to benefit from growing trade between Africa and China, which it forecasts to rise to $1.7 trillion by 2030 from $200 billion in 2012. Its presence in Asia, the Middle East and Africa will help it connect companies and help facilitate trade, Ahmed said.