BEIRUT: Standard Chartered Bank intends to sell its retail business in Lebanon and focus more on wholesale operations, sources said Monday.
“The bank is considering selling its consumer business in Lebanon and paying more attention to wholesale operations. Standard Chartered prefers to deal with companies instead of focusing on retail banking,” the source, who spoke on condition of anonymity, told The Daily Star.
The lender acquired the small-sized Metropolitan Bank in 2000 and moved the headquarters to Dbayyeh.
A Lebanese banker revealed that Standard Chartered was simply selling the license and instead would open a representative office in Beirut that would focus on the issuance of LCs and some foreign correspondence.
“The representative office will get LCs from abroad and not here. They can preserve the correspondence relationships in Lebanon,” the banker said.
He expected Standard Chartered to open bids before the end of 2013.
“The Central Bank will lend any commercial bank money to buy the license from Standard Chartered. The party which wins the license will acquire the assets and liabilities of the bank along with the branches and the entire staff,” he explained.
The source added that the Central Bank would give the new buyer up to three months to decide what to do with the staff.
Lebanese law stipulates that redundant bank employees would receive 36 months salary if their contracts are revoked by the new buyer.
Bankers said Standard Chartered had a smaller operation in Lebanon in comparison to other lenders but stressed that the bank’s financial situation was very “clean.”
Standard Chartered manages three branches and three priority banking centers, employing about 120 people, according to its website. In April, it appointed Dan Azzi, who was previously regional head of global markets and co-head of wholesale banking for Middle East, North Africa and Pakistan, as CEO in Lebanon.
Standard Chartered plans to focus on business and countries that offer the most potential for profitable growth and pull back elsewhere, CEO Peter Sands told investors during a conference call Monday.
Most foreign banks with subsidiaries in Lebanon have either sold their operations or cut the number of branches.
Among the banks which reduced the size of their operations in the country was HSBC, which cut the number of branches to three, including the headquarters in Ain al-Mreisseh.
Many leading international banks are now focusing more on investment banking than retail business, especially in emerging markets.
One source told The Daily Star that many leading U.S and European banks were exiting markets where profit margins were very small.
“It follows the same logic. They [foreign banks with subsidiaries] cannot afford building up a portfolio because they need to allocate more provisions,” the source said.