Standard Chartered Discloses Investment and Expansion Plans at Africa Investor Day
Standard Chartered recently updated investors at its inaugural Africa Investor Day on the Group’s aspirations for the region. The Group will invest over $100m on 110 new branches in Kenya, Ghana and Nigeria alongside five other core markets over the next three years, as well as making substantial hires across both the Wholesale and Consumer Banking business, including over 900 sales staff in the Consumer Banking business.
At the conference, Diana Layfield, Standard Chartered’s CEO for Africa, set out her vision for the African franchise over the next five years against a backdrop of how far the business has traveled to date. Even allowing for increasing competition from both international and local banks, the Group aims to at least maintain the CAGR delivered over the last five years of 16 per cent. This will see revenues from the African business more than double in size over the next four to five years on a constant currency basis, whilst delivering RoRWA and RoE targets at or above the Group average.
Investment spend will also be accelerated in mobile payments technology, physical infrastructure, staff hires, establishing new onshore presences and deepening existing ones.
Standard Chartered currently covers 37 markets in the region – 15 on a full presence basis and 22 further markets on a transaction basis following its clients; providing extensive reach across the continent, thereby covering 92% of sub-Saharan African GDP.
The Group will expand its geographic reach to establish new onshore presences and deepening existing ones. It intends to open new Wholesale Banking office locations in South Africa and invest in new products in both Islamic banking and Mortgages, as well as establishing an onshore presence in Mozambique.
Since 2010, Standard Chartered has upgraded a significant portion of its branch footprint across Africa, opening or refurbishing 58 branches and making selective ‘bolt on’ acquisitions to expand important capabilities; acquiring Barclays’ African custody business and the specialist African investment bank, First Africa.
It also expanded a number of specialist capabilities, including hiring into its client coverage team and strengthening its M&A capability in key sectors such as oil and gas, and metals and mining; Chinese speakers were hired to provide dedicated support to China-Africa corridor business.
Diana Layfield commented: “At $1.34bn in 2011, Africa currently accounts for 8% of Group income. As with the Group as a whole, our performance has been sustained by a large number of different growth engines with a very healthy balance across our major geographies.
“This is a business which is enormously well-positioned. We see a real opportunity to capture a larger share of the increasing ‘south-south’ trade links between Africa and Asian countries including India, China and South Korea. As Africa becomes more globalized, very few banks have a Pan African footprint that is integrated fully with a global network.”
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