Zimpapers Logo

Tinashe Makichi Business Reporter—
Standard Chartered bank will close up to six branches in Zimbabwe while retrenching about 100 employees in the process as the group downsizes its operations in the country. However, sources close to the developments at the institution said the closure of the branches could be part of a larger plan to exit Zimbabwe. Two of the six branches to be closed soon are Beitbridge and Victoria Falls.

Standard Chartered head of corporate affairs Ms Lillian Hapanyengwi said the matter was “confidential”.

“Our plans are commercially confidential and we are not in a position to comment on the details.

“Standard Chartered has taken the conscious decision to continue to maintain our long-standing commitment to doing business in Zimbabwe. We remain committed to the long-term interests of our staff and customers in Zimbabwe, and to continuing to facilitate the development and growth of the economy,” said Ms Hapanyengwi.

She also could not highlight the reason why the bank is closing branches in strategic business areas like Beitbridge and Victoria Falls.

Sources say the financial institution might be considering divesting from Zimbabwe citing indigenisation concerns as the bank remains the only non-compliant foreign financial institution in the country.

“The bank is considering divesting, how can a bank close branches in Victoria Falls and Beitbridge considering the business opportunities associated with those locations. This may be part of the bigger plan to divest,” said the sources.

On indigenisation, Ms Hapanyengwi said Standard Chartered has submitted its provisional plans, in accordance with the Act, to the Ministry of Youth, Indigenisation and Empowerment.

As the staff rationalisation exercise intensifies the bank employees have lodged a complaint to the provincial labour office in the Ministry of Public Service, Labour and Social Welfare raising concern on how the bank’s plans to undertake the staff rationalisation exercise.

“The crux of this dispute is that the employer unilaterally proposed to implement a retrenchment exercise without consulting the workers council at the establishment in violation of Section 25A (5) and 6 of the Labour Act (Chapter 28:01) which makes the consultation of the works mandatory,” said the sources.

“So the bank, however, is going to retrench at the same time closing six branches. The bank also closed branches during the land reform, especially in towns surrounded by farms like Karoi,” the sources said.

Standard Chartered this year announced that it will close up to 100 branches next year in Asia, Africa and the Middle East in an attempt to improve its profitability.

The United Kingdom bank plans to cut eight percent of its global network of more than 1 200 branches to save $400 million a year.

Standard Chartered has been facing tough market conditions and has issued three profit warnings this year.

Standard Chartered’s retail clients division serves about 10 million individual and business clients across 34 markets, through 1 200 branches and 5 000 automated teller machines and award-winning digital channels such as breeze — the online banking application being rolled out across the bank’s markets internationally, including Africa.

Ms Hapanyengwi said the bank has a presence in major growth cities in Asia, Africa and the Middle East.

“Our intention is to focus on cities that will experience significant economic growth in the future. As our clients and the world go digital, our branch transaction traffic is decreasing, so we are evaluating how we should reformat our current branches to deliver to our aspiration,” said Ms Hapanyengwi.

She said the bank has identified 85 high-growth cities as strategic, based on market opportunity and growth.

Ms Hapanyengwi said the bank intends to strengthen its presence in these cities substantially to invest to grow. “In cities where the opportunity is long-term, we may restructure to be more efficient,” she said.