Growing African businesses looking to sell their products and services beyond the continent present a growth opportunity for Standard Chartered, the bank’s chairman said on Friday.
The group has operations in 16 African nations, including Kenya, and offers services via correspondent banks in 22 more markets in Africa, where sliding commodities prices have put the brakes on previously strong growth.
You can run a business, not just a large corporation but a medium-size business, here in Kenya and be connected to the world.
Rival Barclays has responded by reducing its exposure to Africa, but StanChart takes an alternative view. “We see Africa as an opportunity to invest rather than exit or divest,” Standard Chartered Chairman John Peace told Reuters in Nairobi, adding that the Internet and other technology is linking more African companies to global trade.
“You can run a business, not just a large corporation but a medium-size business, here in Kenya and be connected to the world,” he said. “Banks, therefore, have a duty to be able to support that connectivity and that is what we are trying to do.”
The World Bank cut its 2016 growth forecast for sub-Saharan Africa this week to 3.3 percent, from a previous estimate of 4.4 percent, citing the drop in commodities prices.
Commodity exporter South Africa and oil producer Nigeria have been hit hard. But Kenya, an oil importer now enjoying cheaper crude prices, has kept annual growth around 6 percent.
Peace said that Standard Chartered’s wealth-management products were finding customers in nations such as Kenya. “We certainly, as part of our new strategy globally, emphasise the opportunity we have in retail, the opportunity we have in private banking and wealth management, and I think that is true in Kenya and in Africa,” Peace said.
Standard Chartered has not, however, been immune to the commodities slide and has adjusted its risk profile accordingly. “We tightened our risk tolerance, recognising that things are going to remain choppy for the foreseeable future,” said Peace, who has said that he wants to retire from his post at the end of this year.
