Government, analysts react to StanChart deal

Dar es Salaam. Financial analysts say the Bank of Tanzania’s (BoT) approval of Access Bank’s takeover of Standard Chartered Bank will have no negative impact on the country’s banking system.

Tanzanians, they said, had nothing to worry about because StanChart’s presence in the nation was quite limited.

StanChart and Bank and Access Bank Plc have entered into an agreement for the sale of the former’s consumer, private and business banking in Tanzania plus shareholding in its subsidiaries in Angola, Cameroon, The Gambia and Sierra Leone.

The sale of Tanzanian business remains subject to the approval of the respective regulators in both Tanzania and Nigeria, as the value of the transactions remains undisclosed.

Yesterday, BoT governor Emmanuel Tutuba said the Central Bank would give StanChart approval to sell its business to another entity.

Mr Tutuba said following the announced decision “Access Bank will inherit Stanchart balance sheet, which includes loans and debts, among others.” Repoa executive director Donald Mmari said banks differ in strategies, noting that there was a possibility that StanChart has developed the strategy to leave the retail segment and focus on corporate.

He said alternatively, the bank could have decided to leave the continent and concentrate its businesses in other parts of the world, particularly Europe.

“This is just a diversity strategy, it will not affect the country, especially when putting into consideration that the bank was relatively small,” he said.

Prof Jehovaness Alkaeli of the School of Economics at the University of Dar es Salaam (UDSM) said it was a normal decision that will have no negative impact on customers.

“Probably some customers will lose confidence in the bank and opt to choose another bank,” he said.

He said the decision to sell the bank could be attributed to its failure to meet its goals, insisting that the industry will remain stable.

A renowned economist, Prof Samuel Wangwe said banks’ decision to sell businesses to other entities was a normal exercise globally.

“That could be because of the business failure to generate profit, therefore informing owners of the need to concentrate in places where they are doing well,” he said.

In April 2022, Standard Chartered strategically decided to divest from a number of markets, namely; Lebanon, Angola, Cameroon, Gambia, Sierra Leone, Zimbabwe and Jordan, and to exit the CPBB (Consumer Private and Business Banking) business in Côte d’Ivoire and Tanzania.

The announcement was made at Standard Chartered’s Headquarters in London in the presence of senior representatives from both banks and was signed by, Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered and, Roosevelt Ogbonna, Group Managing Director, Access Bank Plc.

The banks in a statement said the agreement with Access in Sub-Saharan Africa is in line with its global strategy, aimed at achieving operational efficiencies, reducing complexity, and driving scale.

As part of the agreement, Access Bank will provide a full range of banking services and continuity for key stakeholders, including employees and clients of Standard Chartered’s businesses across the five aforementioned countries.

In a statement, the bank said, Access Bank and Standard Chartered will work closely together in the coming months to ensure a seamless transition, with the transaction expected to be completed over the next 12 months.

Commenting on the agreement, Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered, said that following the announcement we made in April last year, the project is now substantially completed with the announcement for the sale of the 5 markets and the furtherance of a partnership with Access Bank.

“This strategic decision allows us to redirect resources within the AME region to other areas with significant growth potential, ultimately enabling us to better support our clients. We look forward to working closely with Access Bank’s team over the coming months to achieve a successful conclusion to this transaction while safeguarding the interests of our valued clients and prioritising our employees,” he said.