Standard Chartered Bank to Sell Part of Its Business in Uganda

Standard Chartered Bank Uganda is planning to sell its retail and wealth management services as part of a global strategy to focus on larger businesses and wealthy clients. This process is expected to take 18 to 24 months and is awaiting approval from regulators. This move aligns with Standard Chartered Group’s broader initiative to streamline operations in select markets, including Uganda, Botswana, and Zambia.

Why the Sale?

During a press briefing in Kampala, Mr. Sanjay Rughani, the Chief Executive Officer of Standard Chartered Uganda, confirmed that the divestment process is expected to take between 18 and 24 months. The sale is still pending regulatory approval, and the bank is actively seeking a suitable buyer.

“We are taking a phased approach … our branches and systems will continue to function normally. We remain committed to minimizing disruption for clients and managing the transition in partnership with stakeholders,” Mr. Rughani said.

The decision is part of the bank’s strategy to concentrate its resources on corporate and institutional banking, which involves managing cross-border needs for large companies and wealthy clients.

Impact on Staff and Customers

Mr. Rughani assured stakeholders that the bank would maintain its commitment to its staff and current customers in the retail and wealth segments during the transition. Some employees will be absorbed into the corporate banking division, while others may be integrated into the operations of the buyer.

Expert Views on the Shift

Dr. Fred Muhumuza, a prominent Ugandan economist, explained that the move reflects a shift in banking dynamics. He noted that retail banking is becoming less lucrative due to declining deposits and high operational costs associated with administration, technology, and management.

“Banks are shifting their focus to high-value clients and large corporations that require significant capital to sustain their operations. Meanwhile, mobile, online, and agent banking have overtaken traditional retail banking in popularity and cost-efficiency,” Dr. Muhumuza said.

A Strategic Realignment

In a statement, Standard Chartered Group revealed that the sale of these divisions is part of a global strategy to exit certain markets and reinvest in high-growth areas like wealth management. Bill Winters, the Group’s Chief Executive Officer, emphasized that the bank’s strategy focuses on concentrating resources where it has a distinct client proposition.

This restructuring follows the bank’s 2022 decision to exit five African markets (Angola, Cameroon, Zimbabwe, Gambia, and Sierra Leone) and two Middle Eastern markets (Jordan and Lebanon).

Legacy and Market Presence

Standard Chartered Bank is Uganda’s oldest financial institution, having operated in the country for more than 112 years. It currently runs three branches in Kampala, along with 32 ATMs, 10 cash deposit machines, and a network of over 20,000 agent banking locations nationwide.

What’s Next?

The sale of its retail and wealth businesses marks a significant transformation in Standard Chartered Uganda’s operations. While the bank repositions itself to cater to corporate and affluent clients, its departure from retail banking reflects broader trends in the global banking industry.

Customers and stakeholders will be keenly watching how the transition unfolds and who the new buyer will be.