This past week we read a lot of dark articles following the announcement that StanChart was leaving Zimbabwe. There was a lot said with people blaming the Zimbabwean economy for StanChart’s exit. In our opinion piece on the issue, we pointed out that Zimbabwe’s economic woes probably had little to do with StanChart’s exit given the fact that it’s leaving other markets in the Middle East and Asia as well. It’s a narrative that’s unlikely to excite readers but it’s true. In addition to this, we feel there was no need for the bank’s account holders to panic as the bank was on a firm foundation and not facing any immediate financial threats.
Anyway, to prove what we have been saying the RBZ just corroborated StanChart’s message:
DIVESTITURE OF STANDARD CHARTERED BANK GROUP’S INTEREST IN ZIMBABWE
The Reserve Bank of Zimbabwe (the Bank) wishes to advise the public that , Standard Chartered Bank Zimbabwe Limited has formally advised that the Standard Chartered BAnk Group has made a decision to divest its business interest in Zimbabwe.
Standard Chartered Bank Zimbabwe Limited has advised that the divestiture from some countries in the Middle East and Africa, including Zimbabwe, is in line with the Group;s new business model and strategic repositioning.
While the divestiture will result in change of ownerhsip and control of Standard Chartered Bank Zimbabwe Limited, the latter which is currently adequately capitalised, liquid and profitable will continue to operate normally under the purview of the Bank.
John P. Mangudya
Standard Chartered Bank is not leaving Zimbabwe
People often get confused by these things but a lot of Multi-National companies operate as two distinct companies. A local subsidiary which is a company in its own right, for example, Telecel, Old Mutual Zimbabwe or in our case Standard Chartered Bank Zimbabwe Limited the bank we all know and see when we go about town. Then there is the holding company for example Telecel International, Standard Chartered Bank Group or Old Mutual Limited. Despite holding companies bearing similar names to their subsidiaries they are not one and the same thing. Often holding companies are foreign entities with shares (known as controlling stake) in local similarly-named entities.
It’s just that StanChart Group is intent on “leaving” by selling its controlling stake in StanChart Zimbabwe. The new owners might or might no continue to operate as StanChart Zimbabwe depending on what they want to do with their new investment. In the case of Telecel for example the new owners of the company continued to call it Telecel even to this day. Telecel International is no longer the owner of Telecel Zimbabwe.
In the case of Barclays, the new owners decided to rebrand and call it First Capital because they also had their own group of similarly named banks and wanted to expand into Zimbabwe. While at it we might as well repeat the South African example. A long time ago StanChart Group used to own and operate in the South African market as Standard Bank they sold their stake. The Standard Bank group, known as Stanbic in Zimbabwe is now a powerhouse in its own right. On the other hand when Barclays left the South Africa market they became Absa and bank that is still thriving in South Africa.
Morale of the story. This is still mostly administrative until new owners come and change things up.