OPINION | Complexity and limited growth: A dispassionate look into StanChart’s Zimbabwe exit

Everyone wants to operate on normal terms of doing business. At present, Zimbabwe does not have these, judging by Standard Chartered plc’s exit, writes Perry Munzwembiri


The curtains are falling on the much-storied Standard Chartered Bank Zimbabwe, with its rich history, as the country’s oldest bank. Its place in Zimbabwe’s rich historical tapestry is undoubtedly cemented.

From its very first branch in Bulawayo in 1892 in a bell tent to the merger between Standard Bank and Chartered Bank in 1969, to give the bank its present form, all the way to local incorporation in 1983, after independence, and more recently, its downscale, to maintaining just two branches across Zimbabwe, the bank has in a sense mirrored the country’s eventful history.

Standard Chartered plc has announced a “shock” decision to exit five African countries – including Zimbabwe, as part of its strategy to “focus on the region’s largest and fastest-growing markets.”

Standard Chartered exits Zimbabwe and 6 other countries to cut costs, ending 130 years in the country

For all the talk by government about being “open for business”, and “a vision of becoming a middle-income economy by 2030”, the stated reason by Standard Chartered is rather instructive of how foreign capital views Zimbabwe, and in part, its long-term growth prospects.

While this announcement might have come as a surprise to most – given the bank’s much-touted, “Here for Good” brand promise, a dispassionate look at the state of affairs over the last couple of years, would certainly help to put things into perspective.

Sharpening focus

The statement by the bank’s group chief executive Bill Winters is revealing.

“We are sharpening our focus on the most significant opportunities for growth while also simplifying our business,” Winters said. The bank effectively does not see sufficient evidence of future growth prospects locally, and, perhaps more damning, views the local market as very complex to operate in, for the level of return it earns.

Despite its solid history as the oldest bank in the country, Standard Chartered Zimbabwe has an average market position, reflected by its share of industry assets and deposits of around 5% and 6% respectively, ranking 8th and 6th out of 19 banks, according to some publicly available data.


In 2019, Standard Chartered paid a fine of over US$18 million to the United States’ Office of Foreign Assets Control (OFAC), for multiple offenses in processing transactions of Zimbabwean state-owned companies and other high-profile sanctioned individuals. In 2016, the bank had also infamously asked the Industrial Development Corporation (IDC) to close its accounts with it to avoid similar fines.

ALSO READ | US fines StanChart US$18m for handling Zimbabwe transactions, violating sanctions

As recent as February 2022, the bank announced that it was investigating allegations of misconduct by some of its senior management, including its CEO Ralph Watungwa, according to media reports. Although the bank has not publicly announced what this misconduct involves, market chatter has it that Watungwa was suspended over alleged abuse of the foreign currency auction, as well as allegations of improperly authorised renovations at buildings owned by the bank.

In what was the British government’s first direct commercial loan to Zimbabwe’s private sector in more than 20 years, Standard Chartered Zimbabwe partnered with the CDC (now British International Investment), the British government’s development finance institution, in May 2018, to avail a US$100 million facility to lend to Zimbabwean businesses.

However, lending credence to the notion of Zimbabwe’s complexity, reports showed that only one company qualified to benefit under this facility, and even then, funds for this company had not been disbursed.

ALSO READ | A year later, CDC’s US$100m credit lifeline for Zimbabwe lies idle

What was the issue, you may be wondering? Foreign currency shortages and exchange rate distortions meant that it was not immediately clear how companies would repay loans under this facility, resulting in Standard Chartered closing the taps on the facility. This was at a time when the bank was pursuing a strategy to strengthen its Commercial, Corporate & Institutional Banking segment while pivoting away from retail banking.

The forex conundrum

Zimbabwe’s ongoing currency and exchange rate conundrum will also not have helped the situation. Difficulties in the repatriation of dividends and profits have been widely documented, and these would have conspired in making a continued investment by Standard Chartered plc in the local unit untenable. The IMF recently warned in its recent Article IV consultation report, that current foreign currency restrictions have been imposing large economic costs and deterring foreign currency transactions.

The same IMF report cautioned that local financial sector fragility has increased, buckling under the dual weight of the economic downturn and high inflation. This has seen industrial-scale erosion of real assets, the decimation of balance sheets, and a highly constrained lending capacity for banks.

For instance, there was the announcement by the Reserve Bank of Zimbabwe (RBZ) that any excess ZWL liquidity on bank balance sheets (i.e. deposits that are not lent out) would be compulsorily swept by the RBZ and swapped for non-negotiable certificates of deposit which carry a zero-interest rate. Imagine that!

In essence, Standard Chartered has been operating in an environment where the financial system has become an increasingly smaller proportion of the economy over time, unable to meaningfully fund the capital investments that the economy desperately needs.

Add on the rapid informalisation of the market, which has seen a gradual decline in both quality and quantity of blue-chip corporates that the bank can profitably serve.

While Zimbabwe was in March removed from grey list of the FATF – a global organisation mandated with combating money laundering – the decision to exit the market by Standard Chartered will likely have been made a while back when Zimbabwe was still grey-listed. Zimbabwe’s grey-listing would have compromised correspondent banking relationships globally, and invited unwelcome scrutiny on the unit’s Zimbabwean operations. An unnecessary headache if you will.

ALSO READ | Relief for Zimbabwe as it exits damaging FATF financial ‘grey list’

The bottom line is that everyone wants to operate on normal terms of doing business. At present, however, Zimbabwe does not have these, and, judging by Standard Chartered’s estimation, will likely not possess these in the long term. It is when viewed with this lens, and accounting for the factors mentioned above, that perhaps the decision to shut Standard Chartered Zimbabwe can be best understood.


Perry Munzwembiri writes on Zimbabwe and sub-Saharan Africa economic trends. Read more from Perry on his substack https://opinionista.substack.com/