Standard Chartered is betting on Africa in a big way. The emerging markets specialist has announced that it will invest over $100m over the next three years on 110 new branches in Kenya, Ghana, Nigeria and other countries in the region, as well as accelerating investment spend on mobile payments technology, physical infrastructure, staff hires, establishing new onshore presences and deepening existing ones. The plan is to more than double the revenues from the African business over the next four to five years.
Most of the recruitment will be for retail bank staff, but there will be some big wholesale bank hiring too.
“We will recruit over 950 consumer banking sales staff over the next three years, as well as making substantial hires in the Wholesale banking business in multiple countries,” says Diana Layfield, the bank’s CEO for Africa tell us. “New consumer banking staff will be allocated to those markets where we will be expanding our branch network. This expansion is focused on increasing our impact and reach within existing markets such as Nigeria, Kenya, Zambia and Ghana amongst others.”
The new hires will be predominantly local except where the role demands international experience, says Layfield: “Our ambition is always to match each role with the required level of skills to ensure maximum productivity and growth for that role going forward. In Africa, our priority is to recruit local talent – mentoring, upskilling and providing talented Africans with the development opportunity that only an international bank operating in more than 70 markets worldwide can provide.”
Nevertheless, she concedes that international bankers will be needed in some cases: “Certain roles will require the appointment of representatives from the group where it makes strategic sense to bring in existing international banking skills and experience from our other markets in Asia and Africa in order for us to increase our competitive advantage, implement global best practices and build capacity within our various African businesses.”
StanChart will open new wholesale banking locations in South Africa and invest in new products in both Islamic banking and mortgages. It will also establish an onshore presence in Mozambique. The number of countries it covers will grow from the current 37 as the bank expands it geographic reach across the continent.
“We will continue to build capacity within our investment banking business across the continent to meet the evolving and expansive needs of African corporates,“ says Layfield, “and support the increasing number of international investors looking to participate and support Africa’s growth story – most of whom come from our existing global footprint. As Africa becomes more globalised, very few banks have a Pan African footprint that is integrated fully with a global network.”
Investec analysts, who know a thing or two about Africa, reckon that StanChart’s move is a positive one. “The bank can deliver 10%+ revenue and EPS growth and the African contribution can grow at twice that rate,” says analyst Ian Gordon. The wholesale banking pipeline is “fantastic” and “the outlook for more broad-based growth is strong, underpinned by a rapid expansion of network income”. Standard Chartered is therefore Investec’s top pick in the banking sector with a “buy” recommendation.