March 6 (Bloomberg) -- Standard Chartered Plc, the U.K. bank that cut bonuses and boosted its dividend after profit rose, is relocating its African business to Johannesburg from Dubai to take advantage of higher growth rates on the continent.
Traders covering Africa from Dubai will move “in due course” to South Africa’s largest city, Vicki Robinson, a spokeswoman for the London-based bank, said in an e-mailed response to questions yesterday. Private equity, transaction banking and project finance teams covering Africa have already moved to Johannesburg, she said.
Competitor Barclays Plc, which controls South Africa’s Absa Group Ltd., closed its Africa headquarters in Dubai in 2011 and relocated staff to Johannesburg to work more closely with the local bank. Standard Chartered’s income from Africa rose 15 percent last year to $1.59 billion, with 10 countries posting growth of more than 10 percent, including Kenya, which gained 34 percent, and South Africa, which rose 28 percent, the bank said.
Standard Chartered, with operations in 16 African countries, plans to invest $100 million over the next three years opening 110 branches on the continent and recruiting 950 consumer-banking staff, Robinson said. Revenue from Africa made up more than 8 percent of income last year, the bank said.
Standard Chartered has been operating in Africa for more than 150 years and entered the United Arab Emirates in 1958, according to the bank’s website. It employs more than 2,300 people in the U.A.E and before the relocation had over 200 traders in Dubai.
The bank said in October it plans to double revenue at its African business within five years. The lender, which gets most of its profit from Asia, has been expanding in Africa, India and China, where economies are outpacing many developed nations.
Standard Chartered has just under 300 people based in Johannesburg and while its sub-Saharan Africa team will be based in the city, its Middle East and North Africa team remains in Dubai, Robinson said.
Barclays and Absa are integrating their operations in Africa as both lenders seek to boost profit on a continent where many of the 1 billion people don’t have bank accounts. Absa investors on Feb. 25 voted to approve the South African bank’s $2.1 billion all-share offer for most of Barclays’s African assets, marking “the birth of a pan-African banking giant,” according to Absa Chairman Garth Griffin.
“Banking competition in Africa is certainly heating up -- not only are South African banks expanding northward but West African banks are expanding south at a rapid pace,” Michael Jordaan, chief executive officer of First National Bank, the consumer-banking unit of FirstRand Ltd., said in an e-mailed response to questions today.
Standard Chartered, which said yesterday that pretax profit gained to $6.88 billion, dropped 2.2 percent to 1,797 pence in London, valuing it at about 43.4 billion pounds ($65.4 billion). The stock is up 14 percent this year, making it the second-best performer among Britain’s five biggest lenders, trailing Barclays.
Chief Executive Officer Peter Sands, 51, is trying to attain revenue growth of at least 10 percent, while keeping expenses under control as Standard Chartered hires and adds branches in China and Africa.
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