Standard Chartered Plc, a major international bank has announced it intends to exit operations in The Gambia as well as Angola, Cameroon, Zimbabwe, Jordan, Lebanon, and Sierra Leone. Additionally, In Tanzania and Cote d’Ivoire, the Consumer, Private and Business Banking businesses will be exited and the focus will turn solely to Corporate, Commercial and Institutional Banking (“CCIB”) business.
The reason for the exit and scaling back from these markets, according to Reuters is to allow the bank to focus on other markets with significant impact. The countries to exit made up only 1% of Standard Chartered’s total income and profit before tax for 2021.
Standard Chartered Group CEO, Bill Winters, said: “As we set out earlier in the year, we are sharpening our focus on the most significant opportunities for growth while also simplifying our business. We remain excited by a number of opportunities we see in the Africa & Middle East region, as illustrated by our new markets, but remain disciplined in our assessment of where we can deliver significantly improved shareholder returns. Collectively, our actions will position the AME franchise for the next phase of growth after a very strong 2021 performance. We are grateful to our colleagues and partners in each of these impacted markets for their hard work and dedication and are committed to supporting them through this transition.
Operations in the Gambia
This departure by Standard Chartered ends a 128-year presence in The Gambia (started in 1894). It is the oldest and the only international investment-grade bank in the country. The Bank’s economic contribution to The Gambia has been the culmination of over 128 years of sustained and increasing investment in the country, playing the Central Bank role at one point. The services many international corporate and non-governmental organisations in the Gambia and Senegal through its Gambia office.
As per the 2020 reports, SCB Group owns 75% of SCB Gambia ltd while 25% is owned by individuals and corporates in the Gambia including Social Security and Housing Finance Corporation (16.48%) and late Sir Dawda Kairaba Jawara, (1.52%)
The bank also plays a key role in gender inclusion and diversity with 50% of its 140 employees being women. Similarly, about 30% of the senior management are also women. It has four branches, one Agency and 12 ATMs across the country. As the oldest bank in the country, SCB plays a key role in the development of the Gambian financial market as well as talent development.
It is one of the biggest banks in the country with deposit size of D5.4 billion as of 2020. However, like the other financial institutions around the world, SCB Gambia was impacted by COVID-19 with a 55% decrease in profit before tax which was heavily impacted by the operating cost increase of 155%. The bank’s capital ratio also reduced to 19% in 2020 from 68% in 2019.
Opportunity for other banks
Although the bank has not announced how it will exit the market, the most practical and easy way out is to sell its 75% holding to another bank or private equity fund. It may also be complex to sell all these markets to one investor due to different regulatory and geographical issues.
However, this could an opportunity for the other national and regional banks in the Gambia to consolidate their position and take the leadership role in the Gambia’s bank industry. For instance, Trust Bank Gambia, Ecobank or GTBank may consider buying the SCB’s quality and clean banking books. In a similar way, the likes of other medium players like AGIB can use the opportunity to become “the too big to fail banker” in the country. SCB Gambia has D5.4 billion in deposit liabilities compared to D0.28 billion in loans.