THE sale of Standard Chartered Bank Zimbabwe (StanChart) to FBC Holdings Limited (FBCHL) is progressing well, with the final migration of operations expected to be completed by the end of June this year, it has emerged.
In April 2022, StanChart’s former British-based parent company, Standard Chartered PLC, announced plans to fully divest from its Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe operations, as it was facing growing costs in those markets.
In Zimbabwe, these costs were associated with a volatile currency and an inflationary environment.
In June last year, FBCHL announced its intention to acquire StanChart and the deal has since been approved by the Reserve Bank of Zimbabwe and the Competition and Tariff Commission.
“You will be notified of the exact cut-over date once we have achieved critical milestones in line with the transition plan, which is well on schedule,” StanChart said in an update last week.
“We advise that the bank will continue to operate as a separate entity, and we are currently in the process of securing the necessary approvals for the bank’s new name. Once the transfer of shareholding to FBCH and the migration process is complete, you will be advised of the new name.
“We are committed to a seamless transition of services to the new bank. Your accounts, loans and other banking activities will continue to operate under the new bank. Your account numbers, as well as the terms and conditions governing your accounts, will remain unchanged post migration.”
The bank indicated that current branch managers or relationship managers will continue to serve clients as they have always done.
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“We would like to take this opportunity to express our gratitude for your loyalty. We value our relationship with you and remain confident that this transition will be handled with utmost care. You will continue to receive periodic updates during the migration process until completion,” the bank added.
The group disclosed in its financial results for the year ended December 31, 2023 that despite the unsettling landscape coupled with the transition of the bank to new owners, the business fundamentals remained strong in 2023.
However, the bank recorded an inflation adjusted loss after tax of ZWL$1,3 billion in 2023 compared to a profit after tax of ZWL$6,9 billion recorded in the previous year.
The volatile operating environment saw the bank’s cost to income ratio going up to 65% from 44% the previous year, as revenue momentum reduced in the second half of the year.
Total income increased by 82% in inflation-adjusted terms against a 168% increase in inflation adjusted operating costs during the period under review due to reduced revenue momentum and currency devaluation-induced cost pressures.
“The currency devaluation also adversely impacted the bank’s ability to comply with the minimum regulatory capital position set in United States dollar terms during the period under review,” StanChart chief executive officer Mubayiwa Mubayiwa said, while noting strong financial performance despite uncertainties brought about mainly by the sale announcement as well as the difficult economic environment.
He indicated that the threats induced by the continuous local currency devaluation would be a concern to their focus on balance sheet preservation and growth.
“Significant investment has been made towards strengthening the control environment enabling Standard Chartered Bank to set firm foundations for easy navigation of the current global and domestic economic challenges.
“Our focus will be on delivering our strategic priorities and committing to delivering value to our clients and stakeholders and to ensure a seamless transition process with focus on staff and clients in a compliant manner,” he added.
