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StanChart avoids Brexit jitter to focus on African customers



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StanChart eschews Brexit jitter to focus on Africa customers

  Andy Halford
Andy Halford, Chief Financial Officer Standard Chartered Group, interviewed at the offices in Nairobi on September 4, 2019. PHOTO | SALATON NJAU | NMG

The global economy is rapidly shifting this year, dominated by the upheavals caused by the US-Chinese trade war and Brexit. One of the hardest hit sectors is banking because of its role as a financial intermediary in trading. Andy Halford, Chief Financial Officer of the Standard Chartered Plc Group, recently visited Kenya and discussed with the Business Daily the impact of these geopolitical events on the multinational lender's operations and the resulting opportunities for the markets in Africa.

What do you think of the disruptions in this market through mobile money and see it as a threat? What is your place in there?

I think it's both an element of opportunity and a threat. First, it can be seen that the process of paying people is at the heart of society. It is a central part of our present and future lifestyle.

As in any other sector, companies are always up to date when there are new technologies or new players. However, these are technologies we use ourselves, and the combination of the long standing reputation and reliability that we have built, as well as the use of new technologies gives us a head start, which should give us a decisive advantage in the long term interesting business.

In Africa there are different legal regulations in different countries. How do you assess the regulation and market risk in the region?

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In such a large portfolio we are confronted with very different political and competition law issues as well as very different regulatory issues.

The benefit of such a broad portfolio is that some parts of the portfolio can be macro-challenged, while others have opportunities at the same time. Being in a regulated sector makes this complicated, as you are regulated at both the country level and the entire group.

We know that very well and have a good relationship with the regulators. We have regular interactions with them and this is the core of our business.

Barclays Plc has recently reduced its presence in Africa. What would you say, what the future holds for a multinational bank like yours in this region?

Every bank has its own special circumstances, and Barclays decided to go that route for its reasons.

We firmly believe in our presence in the fastest growing parts of the world and are very proud of the fact that our long-standing presence in Africa and Asia offers us a wide range of services and offerings.

In a world where customers have a choice, this is important ̵

1; we are here because we have the opportunity in Africa, and this strengthens our offer to other parts of the world.

What effect does the US-China Trade War have on you in the markets in which you operate?

This is a space that receives a lot of attention. We are a commercial bank that operates throughout the market, including a large business in China. We put a lot of dollars in the system.

The overall impact on our group as a whole, in the sense of how much of our income we receive from trade between the US and China, is relatively low income at about three percent of our total.

It is still early to see how supply chains will change in the face of what is happening.

We are not a domestic player in the Chinese market, but rather a trailblazer for corporate consumers who put money into and move foreign business and managing the forex risk.

Over time, it will be interesting to see if any of the local companies decide to reorganize their supply chains, so some of their activities are more likely to take place in Asian countries other than China. [19659010] Overall, this trade war brings opportunities and uncertainties. We can not influence that, but we can monitor it.

Is this trade war between the two largest economies beneficial to other regions like Africa – an opening to trade opportunities perhaps?

That could be good. Many companies are still in an exploration stage, but the logic of production in other parts of the world, especially where the required capabilities exist and the cost of production is reasonable, is reasonable. Then the chance is absolutely open and that can be African or other Asian markets.

All in all, the supply will have to shift somewhat and this will open doors in other parts of the world like Africa.

How Does Brexit Affect Your Business Here?

Fortunately, the Brexit is not a big problem for the bank. Our focus is mainly in Asia and Africa, less in Europe. Moreover, the extent to which it occurs in Europe is largely between London, Asia and Africa and less between London and mainland Europe.

We have prepared for whatever the Brexit may end. We have been present in Frankfurt am Main for many years and registered this entity last year as a legal entity in Germany, where it was previously a subsidiary of the UK business.

She now has her bank licenses under European banking law.

In the last nine months we have doubled the number of employees there. However, Brexit shows that we are as prepared as anyone can be.

Do you see a new trade agreement between Britain and Africa after Brexit? Trade agreements with as many countries as possible.

I am sure that the African markets will be the focus.

Relations between Britain and Africa have generally been good over the years, and that will also be top of the list for the government as things develop.


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