Standard Chartered, the British bank that cut bonuses and boosted its dividend this week after profit rose for a tenth year, is relocating its African business to Johannesburg from Dubai as it seeks to take advantage of higher growth rates on the continent.
Traders covering Africa from Dubai would move “in due course”, to Johannesburg, bank spokeswoman Vicki Robinson said in response to questions on Tuesday. Private equity, transaction banking and project finance teams covering Africa had already moved to Johannesburg, she said.
Competitor Barclays closed its Africa headquarters in Dubai in 2011 and relocated staff to Johannesburg to work more closely with Absa, which it controls.
Standard Chartered’s income from Africa rose 15 percent last year to $1.59 billion (R14.4bn), with 10 countries posting profit growth of more than 10 percent, including Kenya, which gained 34 percent, and South Africa, which rose 28 percent, the bank said.
The London-based lender, with operations in 16 African countries, planned to invest $100 million over the next three years opening 110 branches on the continent and recruiting 950 consumer banking staff, Robinson said. Revenue from Africa made up more than 8 percent of income last year.
Standard Chartered has been operating in Africa for more than 150 years and entered the United Arab Emirates (UAE) in 1958, according to the bank’s website. It employs more than 2 300 people in the UAE and prior to the relocation had over 200 traders in Dubai.
The bank said last October that it planned to double revenue from its African business within five years. The lender, which gets a majority of its profit from Asia, has been expanding in Africa, India and China, where economies are outpacing developed nations.
Standard Chartered had just under 300 people based in Johannesburg, and while its sub-Saharan Africa team would be based in the city, its Middle East and north Africa team would remain in Dubai, Robinson said.
Barclays and Absa are integrating their operations in Africa as both lenders seek to boost profit on a continent where many of the 1 billion people do not have bank accounts. Absa investors voted last week to approve the local bank’s $2.1bn all-share offer for most of Barclays’ African assets, marking “the birth of a pan-African banking giant”, according to Absa chairman Garth Griffin.
“Banking competition in Africa is certainly heating up – not only are South African banks expanding northward but west African banks are expanding south at a rapid pace,” FNB chief executive Michael Jordaan said yesterday.
Standard Chartered said on Tuesday that pretax profit inched up to $6.88 billion last year. Its stock is up 17 percent this year, making it the second-best performer of Britain’s five biggest lenders, trailing Barclays.
Chief executive Peter Sands is trying to attain revenue growth of at least 10 percent a year, while keeping expenses under control as the bank hires and adds branches in China and Africa.