Standard Chartered Said to Rebuff Africa Unit Approach in 2014

By Ambereen Choudhury and Dinesh Nair

Standard Chartered Plc, the U.K. lender under pressure to reverse two years of declining earnings, rebuffed at least one potential buyer of its African operations last year, according to two people with knowledge of the talks.
The bank received an unsolicited, informal expression of interest for the division, said the people, who asked not to be identified because the details are private. They declined to identify the group. Standard Chartered wasn’t interested in selling the business, said the people.
Standard Chartered Chief Executive Officer Peter Sands, 53, has come under pressure from investors amid a 29 percent slump in the shares in 2014. The London-based bank, which gets about three-quarters of its earnings in Asia, last week announced plans to cut about $400 million by eliminating 4,000 jobs and shutting equities trading to revive earnings.
“The business in Africa is basically a network of coverage guys with limited on-the-ground distribution, so it’s fairly difficult to sell it,” said Chirantan Barua, an analyst a
t Sanford C. Bernstein, who rates the stock underperform. “On the flipside, there is nothing significant that they could sell today that would help the capital situation materially.”

Photographer: Andrew Harrer/Bloomberg

Standard Chartered Plc Chief Executive Officer Peter Sands has come under pressure from... Read More

Standard Chartered shares slipped 3 percent to 903.3 pence at 8:19 a.m. in London, falling as much as 3.5 percent. That’s the biggest intraday drop since October. They were the worst performers among Britain’s five largest banks in 2014.

Earnings Slowdown

Sands was made aware of the approach, the people said. Even though the bank rebuffed the interested group, it could still come under pressure to consider asset sales, they said.
Simon Kutner, a spokesman for the lender in London, declined to comment.
Standard Chartered has offices in 16 African countries, providing financing services to companies and consumers, according to its website. The bank has been among the top three arrangers of syndicated loans in the sub-Saharan region since 2010, according to data compiled by Bloomberg.
Operating profit at the Africa business fell 27 percent to $209 million in the first six months of 2014 from the year-earlier period. In North-East Asia and Greater China, earnings growth also slowed, company filings show.
Faltering economic expansion in Asia and rising costs for bad loans ended a decade of earnings growth at Standard Chartered in 2013. After cutting the full-year profit forecast for a third time, Sands met with shareholders in November, pledging to lower costs and focus on wealth management.
The bank is scheduled to report full-year earnings on March 4.