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BoU to review StanChart’s exit plan from Uganda

Peter 3rd Dec, 2024 Financial Services Pedson Mumbere
BoU to review StanChart’s exit plan from Uganda

Standard Chartered Bank headquarters on Nile Avenue in Kampala. FILE PHOTO


The Bank of Uganda (BoU) is set to assess a proposal from Standard Chartered Bank Uganda regarding the sale of its wealth management and retail banking operations in Uganda.

But in a statement released on December 2, Kenneth Egesa, BoU’s Director of Communications and Public Relations, emphasized that the BoU would collaborate closely with Standard Chartered Bank to ensure the proposed sale complies with all regulatory requirements.

“We are committed to safeguarding the integrity of the financial sector throughout this process and ensuring a smooth transition for all stakeholders involved,” Egesa stated.

  • Sanjay Rughani, chief executive of Standard Chartered Bank Uganda, said the sale process of their retail banking segment was expected to take 18 to 24 months, pending regulatory approval.

He said the move aligns with Standard Chartered PLC’s broader strategy to streamline operations and enhance its corporate and institutional banking focus in Africa.

However, BoU assured Standard Chartered clients that they can continue transacting as usual until the two-year transition process. “Standard Chartered Bank Uganda remains compliant with all statutory and prudential requirements, including liquidity and solvency standards,” the report highlighted.

  • Headquartered in the United Kingdom, Standard Chartered Bank opened its doors in Uganda in 1912, thus becoming the oldest commercial bank in the country.

A statement from the Group emphasized the shift to serving corporate and institutional clients, with CEO Bill Winters noting that the exits are designed to concentrate resources in regions offering the most distinctive opportunities. The group plans to redirect resources in these markets to serve the cross-border needs of global corporate and financial institution clients.

“We are committed to maintaining our corporate and institutional banking strengths while enhancing service delivery for our key clients,” noted Sanjay Rughani, Standard Chartered Bank’s Chief Executive Officer.

Nine years ago, Barclays PLC also took a similar move, citing operational and capital constraints. This led to the creation of Absa Group Limited, a South African multinational banking and financial services company. In 2022, Barclays sold off its stake in Absa, marking the end of its retail banking presence on the continent.

But whereas Barclays exited retail banking, it still maintains a presence in Africa through its investment banking and wealth management divisions, a path that Standard Chartered has also opted to walk.

  • Analysts say the rising popularity of digital banking and fintech on the continent has disrupted the traditional banking model, thus forcing many of the older banks to go back on the drawing board.
  • The BoU reiterated its confidence in Standard Chartered Bank Uganda’s operational soundness, urging the public to transact with confidence. As part of its regulatory oversight, the Central bank will monitor the process to ensure the interests of customers and the financial sector remain safeguarded.

This shift highlights the evolving landscape of banking in Uganda, as multinational financial institutions recalibrate their strategies to address changing market dynamics and prioritize high-growth sectors.

With Standard Chartered’s focus shifting to corporate and institutional banking, industry stakeholders will be watching closely to see how this decision impacts Uganda’s banking ecosystem.

Apart from providing jobs to more than 500 Ugandans, Stanchart is Uganda’s third biggest bank, is also one of the biggest financers of Uganda Government large-scale projects.

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