BRITISH multinational bank Standard Chartered PLC (StanChart) reported a US$172 million loss in 2024 tied to the sale of its Zimbabwean unit, driven primarily by long-standing foreign currency translation losses.
In its first-quarter trading update, StanChart disclosed a US$190 million foreign exchange loss from the divestment, underscoring the severe financial impact of Zimbabwe’s prolonged currency instability on multinational corporations.
The loss reflects years of value erosion due to exchange rate volatility, ultimately dragging down the group’s earnings.
This significant financial hit highlights the risks foreign investors face in Zimbabwe’s volatile economic environment — a key factor in StanChart’s decision to exit the market.
The bank announced plans in April 2022 to fully withdraw from several markets, including Zimbabwe, Angola, and Lebanon, citing rising operational costs.
In Zimbabwe’s case, these challenges stemmed from rampant currency fluctuations and hyperinflation, making sustained profitability untenable.
The US$172 million loss serves as a stark warning about the broader economic uncertainties deterring foreign investment in Zimbabwe.
“During 2024, the group disposed of its investments in subsidiaries and the gain/loss on disposal was SCB Zimbabwe Limited & Africa Enterprise Network Trust (loss: US$172 million including translation adjustment loss: US$190 million)," Stanchart's first quarter trading update reads in part.
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The group also reported losses from SCB Angola SA and SCB Sierra Leone Limited, totalling US$45 million, offset only by a US$17 million gain from the sale of Shoal Limited and Autumn Life Pte Ltd. Africa Enterprise Network Trust is a standalone local fund established to hold StanChart's remaining local investments.
Last year, Stanchart realised a loss of US$332 million listed under its other items.
The other items include a US$100 million charge relating to Korea equity-linked securities, US$172 million primarily relating to the recycling of forex translation losses from reserves into profit and loss on the sale of its Zimbabwe unit.
Stanchart reported US$232 million in net loss on businesses disposed of or held for sale last year.
Local financial services group, FBC Holdings Limited bought Stanchart’s Standard Chartered Bank Zimbabwe for nearly US$24 million and rebranded it to FBC Crown Bank Limited.
StanChart launched a bank-wide initiative, “Fit for Growth” last year, aimed at streamlining operations by simplifying, standardising, and digitising its business to enhance productivity, client service, and employee experience.
The programme is projected to deliver US$1,5 billion in cumulative cost savings over the next three years.
The sale of its subsidiaries, first announced in 2022, was part of this strategic restructuring.
