StanChart strategy pays off

• Agency banking sites reach 44
• Bank partners with BotswanaPost to expand reach
• Profit before tax increase by 200 percent in H1
• Share price on upward trajectory

The bank devised a strategy to  grow the Brand Visibility, Employee Experience, Thinking Client, and Return on Tangible Equity (RoTE). Under the strategy, key priorities include optimal distribution through increased agency banking and developing partnerships.

Speaking on the sidelines of the StanChart half-year financial results announcement on Tuesday this week, Masupe said the strategy is paying off. “This strategy is actually doing what we wanted it to do,” said Masupe. “We said we want optimal distribution and be where every Motswana would want us to be and we have started doing that.”

After closing down some branches, Masupe said the bank now has 44 agency banking sites at the end of June, against a target of 55 by the first half of the year. “We have said we will close branches but we will touch base with our people everywhere,” he said. “The only thing that was missing in what we are doing was the ability to be able to put in cash and take cash.” Through agency banking, Masupe explained that customers are now able to deposit and withdraw cash.

As part of the optimal distribution, StanChart has also partnered with BotswanaPost to take advantage of the Post’s footprint. “We want to be in every single one of the units. By the end of the year, we should have done 100 sites,” said Masupe. “This is quite important to us because as we closed branches, we have promised that we will reach every Motswana out there and ensure that the unbanked are banked. We are doing that.”

With regards to other pillars of the strategy, Masupe said the bank is also on course. StanChart had set a target of 45 percent growth for Brand Visibility for the first six months ended June 2023 and said it has achieved 43 percent. “Being here for 126 years is not a small deal,” he said. “We have been celebrating this major deal of being here for 126 years by going out and saying, we belong to this country and we are here for good.”

Masupe also revealed that the bank has improved its Employee Experience by 19 points in the past two years in every single year. “Basically our employees say they are excited about working for this bank,” he said. StanChart MD explained that the pillar of Thinking Client is also important to the bank as it will ensure that customers are happy wherever they are in the country.

“We will bring to them services in terms of technology that is being offered to our clients in Singapore, Hong Kong, Kenya, or anywhere,” declared Masupe. “We are not taking anything from anybody, the only different thing that we did is to say brick and mortar is not the future of banking. There is a different way of banking in the future, and we are pioneering that.” In the last pillar, StanChart has set itself to 25 percent   RoTE by 2025.

“Our returns are great because we go out of our way to sweat to ensure that our clients are happy and that we are able to give back to our stakeholders holistically,” said Masupe. “We are getting there and very excited about it. This strategy is working and it will continue to work.” According to StanChart Chief Financial Officer, Tapiwa Butale, the bank’s global operations target is to return at least 10 percent of what investors have put.

“As at 30^th June, we had returned 32 percent,” Butale disclosed. “We have created value to that extent for our shareholders.” For the period under review, StanChart grew its income by 30 percent year-on-year, which Butale said is reflective of the value the bank is building for its shareholders. “This same confidence is actually quite reflective in the share price performance,” she said. At the same time last year, StanChart shares traded at 238 thebe per share.

It started the year trading at 287 thebe per share and by the end of June this year, it was at 423 thebe per share and increased to 505 thebe per share this week. From a capital point of view, Butale outlined that the bank remains well-capitalised and ready to support business growth. “We closed H1 with a capital adequacy ratio of 17.1 percent and we are ready to support business growth,” she said.

For the period under review, Butale noted that the bank was able to protect and defend its balance sheet despite the volatile operating environment. “We reported strong performance on the loan growth despite the high inflationary environment that we had,” Butale said. “As a result of that, we were able to report good top line performance.”

Butale said the bank’s fee income performance was muted in the first half of the year, but noted that it remains a key focus area. StanChart ended the year with a Profit before Tax (PBT) of P241 million, 239 percent from P71 million reported in the prior period. “We will continue to remain focused to ensure that our results reflect the strategy that are implementing,” said Butale.