Standard Chartered to buy Absa Bank's custody business in South AfricanStaff writer ▼ | April 18, 2013
The banks did not disclose the value of the deal. This acquisition builds on the significant investment Standard Chartered has already made in its African franchise. In addition to substantial organic investment, the Group acquired First Africa and Barclays' Africa custody business.
Last week, the bank announced the opening of two new wholesale banking corporate offices in South Africa, in Cape Town and Durban. Custody is a core capability that allows Wholesale Banking to deepen its core bank relationships with clients, while also generating sustainable income and liquidity in a capital efficient manner.
Over the past two years Standard Chartered has developed a profitable custody model across 21 sub-Saharan African countries, launching custody operations in South Africa earlier this year.
"This year we celebrate the 150th anniversary of our first business in South Africa and we continue to go from strength to strength. In this very exciting week for Standard Chartered in South Africa, we have announced the opening of new operations in Cape Town and Durban. And now we are adding this very successful custody business, so we can further strengthen our offering to our clients," said Ebby Essoka, Standard Chartered's CEO, South Africa.
Standard Chartered's Africa business has delivered average annual growth of 15% for the past 5 years. In the last year, the region generated income of $1.6 billion, up 15%, with the Wholesale Bank generating $1.1 billion, up 16%.
Eight markets delivered more than $100 million of income for the year, with Kenya and Ghana joining Nigeria in delivering over $200 million. Ten markets delivered double digit income growth, including the largest markets (Kenya up 34%, South Africa up 28%, Ghana up 20%, Nigeria up 13%).
The group intends to double revenues from Africa over the next four to five years on a constant currency basis. To achieve that, the group will invest more than $100 million in new branches over the next three years, accelerate the investment in mobile payments technology, and hire new staff. It will also invest in new areas such as Islamic banking. ■