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Inside the First Foreign Bank to Set up Operations in Kenya

From one branch at the Mombasa Treasury Square, Stanchart occupies a prominent space in Kenya's banking history

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Even before Kenya got independence from British colonialists, the country had already stared attracting foreign investments. Among investors that saw opportunities in Kenya despite the emerging struggle for independence were manufacturers and financial services providers.

Given its roots in Britain, it was almost obvious that when the colonialists needed a banking investor, they attracted one from their motherland.  Standard Chartered Bank Kenya Limited was established in Kenya in 1911 with the first branch opened in Mombasa Treasury Square.

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The bank listed on the Nairobi Securities exchange in 1989. The public shareholding is just under 25% – with the remainder held by Standard Chartered PLC – and comprises over 30,000 shareholders.

Standard Chartered set the foundation that would hold many other foreign banks including Barclays (now Absa), Citi Bank (US), Standard Bank (Stanbic) as well as recent entrants such as United Bank of Africa, Ecobank, among others.

Some 112 years later, Standard Chartered Bank Kenya is still going strong in Kenya. Standard Chartered Bank Kenya has 22 branches across the country, 107 ATMs and more than 1,000 employees. Listed at the Nairobi Securities Exchange (NSE), Standard Chartered has a market capitalization of Ksh53 billion.

This makes Standard Chartered the 7th most valuable company at the stock exchange and fourth largest bank after KCB, Barclays, Co-operative Bank and Equity Group in that oder. Its shares trade on the NSE under the “SCBK” ticker symbol.

In its latest financial results, the bank reported a Ksh9.7 billion net profit for the third quarter ending 30th September 2023, 12% growth from Ksh8.7 billion same period in 2022. “The external environment remains complex, but we remain steadfast in providing strong support for our clients through this period,” says Standard Chartered Bank Kenya CEO, Mr Kariuki Ngari.

The bank has a diversified portfolio cutting across select sectors that include business services, manufacturing, wholesale and retail trade, transport and communication, real estate, agriculture, energy and water. But the main target segments are mainly corporate clients, government and government agencies, commercial clients and retail clients.

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Standard Chartered Bank Kenya has achieved a number of firsts in the market: first bank in Kenya to be awarded the ISO 9002 certification in technology systems, first ATM Automated Banking Centre in Kenya and for 24-hour convenience, and first to introduce unsecured personal loan. Standard Chartered was also the first to introduce Priority Banking facilities in Kenya for more affluent customers amongst others.

“Our business model is driven by the Standard Chartered Group’s refreshed strategy: Network, Affluent, Mass Retail and Sustainability – and three enablers – People & Culture, New Ways of Working and Innovation & Technology. This model allows us to focus on the key areas that will help us in the next phase of our growth,” the bank says.

UK banking multinational Standard Chartered Plc in 2022 announced its exit of five African markets in a strategic review that would leave it with the Kenyan and Nigerian subsidiaries as its most important units in the continent.

Closing some subsidiaries

The London Stock Exchange-listed firm on Thursday announced it would sell its operations in Angola, Cameroon, Zimbabwe, Gambia and Sierra Leone besides exiting Jordan and Lebanon.

StanChart said its decision was aimed at disposing of less profitable subsidiaries and simplifying the group business which spans Africa, the Middle East, Asia, Europe and America.

The multinational’s presence in Africa will drop to 10 from the current 15 countries. It will continue operating in Kenya, Tanzania, Botswana, Mauritius, Uganda, Nigeria, Zambia, Cote d’Ivoire, Egypt and Ghana. In Tanzania and Cote d’Ivoire, the retail banking business will be sold and only corporate and institutional banking will be retained.

“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,” Stanchart CEO Bill Winters said.  “We remain excited by a number of opportunities we see in Africa and the Middle East region, as illustrated by our new markets, but remain disciplined in our assessment of where we can deliver significantly improved shareholder returns.”

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KALU MENGOhttp://www.businesstoday.co.ke
Kalu Mengo is a Senior Reporter With Business Today. Email: [email protected]
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