The Standard Chartered bank has released its annual report for the year 2019, recording impressive performance driven by accelerated growth agenda and transformed retail banking.
Commenting on the results, Sunil Kaushal, Regional CEO, Africa and Middle East said: “I’m proud to say that 2019 was a strong year for the Bank. For Africa and Middle East, we were well-positioned for growth moving into the year and this is clearly illustrated in our results.
Our focus on accelerating our digital agenda and the transformation of our Retail Banking business proved successful as well. We launched eight digital banks across key markets in sub-Saharan Africa in less than a year, digitised our wealth management offering for the digital bank platform, and grew accounts by over 150,000.”
The Bank boss also added: “Our strong performance demonstrates the transformation of the Africa and Middle East franchise despite a challenging macroeconomic backdrop across the region.”
“Our results are driven by an outstanding performance by our Global Banking business, particularly in Corporate Finance which had a strong first quarter in 2019 closing out marquee deals, and our Debt Capital Markets business also had a strong year overall. The distinct competitive advantage of our network capabilities and strong product offering allowed us to connect to our clients across Africa and the Middle East and grow key corridors into the region.
Commenting on the new year, he revealed: “We have had a good start to the business in 2020 and the underlying business excluding large deals continues to be resilient. As we move forward, the region is focused on executing swiftly against the strategy to drive growth and we are determined to support our clients achieve prosperity.”
Analysing the statistics, he explained that the bank’s underlying operating profit before taxation of $684 million was 29 per cent higher with lower expenses and improved credit impairment partially offset by a 2 per cent decrease in income.
The underlying operating income of $2,562 million was down 2 per cent but up 3 per cent on a constant currency basis, with a good performance in our Financial Markets business across the region.
Middle East, North Africa and Pakistan were flat, and Africa was down 3 per cent
Strong performances in Financial Markets and Corporate Finance were offset by margin compression in Retail Banking and lower Wealth Management in the UAE
Loans and advances to customers were up 5 per cent and customer accounts were down 2 per cent
Globally, on a bad note the bank maybe unable to meet its target owing to coronavirus and other factors.
The underlying momentum in the fourth quarter of 2019 continued in the opening weeks of 2020 but lower interest rates, slower global economic growth, a softer Hong Kong economy and the impact of the recent novel coronavirus outbreak will likely result in income growth in 2020 below our medium-term 5-7% target range. These headwinds are expected to be transitory, but we now believe it will take longer to achieve our RoTE target of 10% than we previously envisaged.
We have improved our RoTE every year since 2015 and we are focused on doing so again in 2020 through a combination of positive income-to-cost jaws and continued discipline on returning surplus capital to shareholders. The Board has authorised the purchase and cancellation of up to $0.5bn worth of shares starting shortly and will review the potential for making a further capital return upon the completion of the Permata sale.
