Standard Chartered Bank - Afrikan Heroes

Standard Chartered Bank Reports Highest Operating Profit in Africa Since 2015

February 17, 2022

Standard Chartered PLC has announced that its financial results for the full year and fourth quarter ending 31 December 2021shows a record of highest operating profits in Africa and the Middle East region since 2015.

The performance highlights show a broad-based growth and improvement in income and profits. Income grew by 3.5 per cent to USD 2,446 million despite the adverse impact of rate cuts on margins. Record levels of income were reported in the bank’s Financial Markets and Wealth Management business

Sunil Kaushal, Regional CEO, Africa and Middle East

Sustained Cost discipline resulted in a net reduction of 4 percent year-on-year despite continuing investments. This generated positive income-to-cost jaws of 7 percent. Pre-provision Operating Profit increased by 21 percent year-on-year. Operating Profit grew to a robust USD 856 million, recording the highest level since 2015.Strong improvement in the region’s Return of Tangible Equity (ROTE) ratio at 8.8 per cent

Geographical Highlights:

A significant turnaround in the UAE with a healthy Operating Profit of USD 242 million compared to a USD 110 million during the same period last year, driven by cost reductions and de-risking actions

Pakistan delivered its highest ever Operating Profit, driven by strong balance sheet growth and continued productivity improvements

Middle East (ex-UAE) saw strong income growth driven by Saudi Arabia while maintaining cost discipline, resulting in a multi-year high level of Operating Profit.

The Bank’s income in Africa grew by 9 per cent on a constant currency basis driven by the digital banking momentum and strong pipeline conversion; Operating Profit for Africa was at the highest level since 2015.

Commenting on the results, Sunil Kaushal, Regional CEO, Africa and Middle East said: “2021 was an exceptional year for us in the Africa and Middle East region. Our record financial performance demonstrates the progress made in the execution of our strategy. It is testament to the hard work and commitment of our team and the continued cost discipline which has allowed investments to continue though the cycle”.

Th record performance was also driven by income growth despite the lower interest rate which impacted the bank’s cash management and retail businesses.

“Throughout the year, we accelerated our digital transformation, proudly expanding our digital banking network in Pakistan, in turn strengthening our customer base through enhanced connectivity. Aligned to the Kingdom of Saudi Arabia’s vision 2030, we have also expanded our presence in Saudi Arabia last year to provide project finance, capital markets and cash management support to promote trade and investments.” Sunil concluded.

Standard Chartered Bank’s Africa, Middle East Region has received the following awards for the year 2021 which solidifies the Bank’s robust progress as industry leaders in the region.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

African Businesses May Suffer Disproportionately From Covid-19

June 18, 2020

Razia Khan, Standard Chartered Bank’s chief economist in-charge of African operations

With the effects of the Covid-19 pandemic ravaging sub-Saharan Africa’s economies, countries could face a financial crisis, dashing hopes of survival of businesses and pushing many households into poverty. Global economists and financial experts are calling for state intervention to rescue banks from liquidity challenges after restructuring loans worth billions of dollars and extending moratoria on repayments to help cushion borrowers facing financial difficulties.

“It is absolutely about strengthening financial institutions. Governments should not do anything or implement policy measures that might take away the capacity of financial institutions to play their part in economic recovery,” said Razia Khan, Standard Chartered Bank’s chief economist in-charge of African operations.“Policy makers have to make a very important balancing role between immediate needs of the economic crisis and how to restore confidence and build a well-capitalised banking industry that is better able to support growth in the future,” she added.

Economic recovery was the focus of a recent virtual forum hosted by the Overseas Development Institute (ODI). Discussions revolved around post-Covid-19 trade-offs between financial stability and economic renewal for African countries, and what specific financial sector development policies and regulations could restore stability. In the UK, the government channelled £330billion ($421 billion) into the banking system as a business support package under the Coronavirus Business Interruption Loan Scheme.

“The current economic shocks may turn into financial shocks because there is a limit to the amount of credit and liquidity that low income countries can generate in their own economies, and this has been compounded by the inability of these countries to meet their own foreign exchange needs and outflows of capital arising from the deteriorating economic conditions,” said Adeyemi Dipeolu, the special advisor on economic matters to the President of Nigeria. “This Covid-19 pandemic has led to financial shocks. The longer the economic conditions remain tight the more likely we are going to have financial shocks.” The banking system is now grappling with more loan defaults and restructuring, and delays in repayment, which could erode interest income — the lenders’ key source of revenue.

According to Dr Dipeolu, African governments are now confronted with the challenge of finding appropriate policies that will kick start economic growth without jeopardising the stability of the financial sector after the Covid-19 pandemic. “The trajectory of Covid-19 in low income countries is complex and this will compound the efforts to revive such economies,” he said. He added that post-Covid-19 recovery in developed countries may be slow and is likely to result in huge financing gaps, large debt service obligations, foreign exchange shortages and heightened credit risk in the banking industry. The World Bank has forecast a decline in growth in the region from 2.4 per cent in 2019, to between -2.1 per cent and -5.1 per cent this year, estimating that African economies could lose between $37 billion and $79 billion in output losses. According to ODI, economies will struggle to achieve financial stability and recover as concerns mount on issues around debt sustainability.

The crisis will also impact African countries’ financial sector development (FSD), which may also have implications for how policies and regulations are formulated and implemented in a post-Covid world. “We are looking at severe economic impact from Covid-19. We have got a crisis that we are dealing with,” said Jonathan Rosenthal, Africa editor of The Economist Magazine. Judith Tyson, a research fellow at ODI, called for the strengthening of both national and regional development banks to help in the recovery of economies destroyed by the pandemic. “We need to put greater emphasis on the strengthening and expansion of development banks to accelerate lending to the productive sectors of the economies post Covid-19,” she said.

The International Monetary Fund has cautioned banks against paying dividends to shareholders this year, saying that lenders need to preserve cash to boost resilience of the banking industry against Covid-19 related shocks. The fund’s managing director Kristalina Georgieva said banks should take measures to shore up their capital and liquidity positions to support fresh credit as the global economy braces for a deep recession this year, with only partial recovery expected in 2021. “One of the steps needed to reinforce bank buffers is retaining earnings from ongoing operations. The interests of bank shareholders are aligned with those of bank supervisors and customers. All stakeholders will ultimately benefit if banks preserve capital instead of paying out to shareholders during the pandemic,” Ms Georgieva said.“Protecting the banking sector’s strength now means that, once the recovery picks up, shareholders can expect large payouts — indeed the more profits retained now, the larger the eventual payout,” she added.

According to the Overseas Development Institute, the Covid-19 pandemic is already radically worsening the economic outlook for Africa. Poverty is expected to increase by two per cent of the regional population, with 26 million people falling under the poverty line, erasing five years of progress in poverty reduction. Half of the new poor will live in just five countries: The Democratic Republic of Congo, Ethiopia, Kenya, Nigeria and South Africa — with Nigeria contributing the most with 6.6 million according to unpublished World Bank material. To stem an economic crisis, in the short-term international finance institutions need to support SMEs and micro-businesses directly or through financing via banks and micro financial institutions. In the longer-term, finance to support recovery — also known as ‘patient capital’ — will be key to replace lost bank lending, especially in sectors where employment and informal occupations are concentrated.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Standard Chartered Calls for Improved Digital Access for Africa

February 2, 2020

Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered

International banking group, Standard Chartered Bank has called for improved digital access to unlock the huge business potential across Africa. The Bank in its latest report titled Opportunity2030 reveals that about $ 200 billion private-sector investment opportunities that could contribute to the UN Sustainable Development Goals (SDGs) in five African countries exist in the continent. The Report which is part of a study carried out by the Bank examined the most impactful opportunities for investing in three infrastructure-focused SDGs in five high-growth markets in Africa namely Ghana, Kenya, Nigeria, Uganda and Zambia.

Standard Chartered SDG Investment Map reveals a USD197 billion opportunity for private-sector investors in five high-growth markets in Africa to help achieve the UN’s Sustainable Development Goals (SDGs), with improving digital access making up USD74.5 billion of that total. The study highlights opportunities for investors to contribute to three infrastructure-focused goals between now and 2030: SDG 6: Clean Water and Sanitation, SDG 7: Affordable and Clean Energy and SDG 9: Industry, Innovation and Infrastructure across emerging markets.

Across all the world’s emerging markets, Oportunity2030 identifies a USD10 trillion opportunity for private sector investors. This represents around 40 per cent of the total funding required to meet specific indicators within the three SDGs – allowing for population growth as well as maintaining current access – with public funds expected to provide the bulk of the investment.

Providing universal digital access represents the greatest investment opportunity for the private sector by 2030 (USD74.5 billion), followed by universal access to power (USD65.8 billion), transport infrastructure (USD46.4 billion) and access to clean water and sanitation (USD10.3 billion)

The biggest single opportunity across the African markets in the study is in increasing digital access – a combination of mobile phone subscriptions rates and internet connectivity – in Nigeria (USD47.4 billion). Driven by its large and growing population, Nigeria also offers the greatest overall opportunity across the SDG indicators measured (a total of USD114.2 billion), followed by Kenya (USD40 billion)

Zambia and Kenya present a big opportunity to make an impact on SDG 6 (Clean Water and Sanitation): With an average of 43 per cent and 56 per cent of the population respectively currently lacking access to clean water and sanitation, there is a USD0.7 billion and USD2.3 billion private-sector investment opportunity to help close the gap by 2030

Uganda presents a meaningful opportunity to make an impact on SDG 7 (Affordable and Clean Energy): with just 22 per cent of the population that have access to electricity, there is a USD6.1 billion private-sector investment opportunity to help achieve universal access by 2030. The greatest investment opportunity in Ghana is in achieving and maintaining universal access to electricity (a key SDG 7 indicator), representing a USD7.8 billion private-sector opportunity.

Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered, said that the UN Sustainable Development Goals are amongst the most ambitious projects humanity has ever attempted. As well as offering our best hope yet of tackling the world’s most serious challenges, they also offer a unique opportunity for the private sector. For the goals to be met in Africa, the private sector must play a central role in deploying capital to get projects off the ground. Opportunity2030 provides a map of these opportunities, revealing the sectors and markets where investors can best contribute to the SDGs whilst achieving sustainable returns.

He added that “currently, not enough capital is reaching the countries that need it the most. With the UN’s 2030 deadline for achieving SDGs just 10 years away, the time to act is now.”

With Standard Chartered Bank’s experience and reach into Africa, the Bank uses banking knowledge, products and its unique footprint to fund sustainable development where it matters most. In June 2019, we launched our first Sustainability Bond, raising EUR 500 million to fund projects aligned to the SDGs in emerging markets, and have worked with clients and partners to create a number of important landmark structured solutions to support the SDG’s. The Bank has also launched its digital bank in nine markets in Africa, as part of the Bank’s digital transformation strategy for Africa. The digital banking solution provides Standard Chartered customers with affordable, fast and easily accessible banking services that is supporting financial inclusion in the markets.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry