HomeBusiness DigestStanChart confident as parent prepares Zim exit

StanChart confident as parent prepares Zim exit

STANDARD Chartered Bank Zimbabwe struck an optimistic tone this week as it moved to calm the market over impending shareholders changes. The lender said it was solid and would emerge unscathed as parent company Standard Chartered Plc exits Zimbabwe in search of higher return markets.

The assurance followed another statement by the Reserve Bank of Zimbabwe soon after Stanchart Plc’s March announcement that the Southern African country was among emerging markets affected by its strategic withdrawal from African and Middle Eastern markets.

Stanchart said it was unlikely to secure a new investor until after one year.

But before a deal is secured, results of a scan of the bank’s operations by directors have been positive, it said.

“On 14 April 2022, Standard Chartered Plc, the parent company of Standard Chartered Bank Zimbabwe Limited announced its intention to exit seven markets in Africa and the Middle East, including Zimbabwe to concentrate on the markets that present the Standard Chartered Bank Group with the greatest potential for growth,” Stanchart said in a commentary to financial statements for the year ended December 31, 2021.

“The exit process, through the sale of equity to a new investor, is expected to take a minimum of 12 months from the date of the announcement. The directors have assessed the ability of the bank to continue as a going concern and are of the view that the intended exit by the parent company will not affect the bank’s operations into the foreseeable future,” the lender said.

Stanchart lifted inflation adjusted profit after tax to ZW$1,6 billion (about US$5,1 million) during the review period from ZW$400 million (about US$1,2 million) during the same period in 2020.

Total revenue increased to ZW$5,2 billion (about US$16,8 million), compared to ZW$3,1 billion (about US$US$10 million) during the comparable period in 2020, driven by non-interest income, which, at ZW$2,7 billion (about US$8,7 million), was ahead of ZW$2,5 billion (about US$8,1 million) net interest income.

Stanchart demonstrated its confidence by announcing it had achieved the regulator prescribed US$30 million during the review period. The bank also announced new executive level changes that will see chief finance officer (CFO) and executive director Christopher Mwerenga leaving at the end of May, a month after the lender announced the departure of former chief executive officer (CEO), Ralph Watungwa.

Stanchart said the outgoing CFO had been replaced by Geri Mangori.

“Mr Christopher Mwerenga leaves the bank on 31 May 2022 after serving the institution for 14 years as CFO and executive director,” the bank said.

“The bank has appointed Mr Geri Mangori as the new CFO and executive director from 1 March 2022,” the Stanchart said as it moved to calm jitters of the impending shareholder change.

“The exit is not expected to have an adverse impact on the bank’s operations as the intention is to dispose of the local unit as a going concern to a new investor,” the statement said.

In March, Mubaiwa Mubayiwa was appointed, succeeding Watungwa, who had been suspended early this year.

Standard Chartered Bank Plc has said it was divesting from seven countries in Africa and the Middle East where it is sub-scale as it seeks to improve profits.

The bank will fully exit Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe, likely by trying to sell its business in those markets.

It said it would also close its retail banking operations in Tanzania and Ivory Coast to focus solely on corporate banking.

The move marks a major shift for Standard Chartered, which has been among the biggest European lenders to invest in the continent in recent years at a time when peers have been withdrawing.

The cuts would allow it to focus on bigger and faster growing economies in the region, such as Saudi Arabia, where it has opened its first branch, and Egypt.

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