Standard Chartered Bank Plc 2018 Annual Report

We have extracted below the Chairman’s Statement from the 2018 annual report of Standard Charted Bank Plc (, listed on Lusaka Securities Exchange:

Last year, in my inaugural statement as Chairman of Standard Chartered Bank Zambia Plc, I highlighted our core responsibility to uphold the strength of our franchise and engage deeply and frequently with both our internal and external stakeholders so that we continuously sharpen the execution of our strategy and meet our set corporate objectives. This is key to securing long term resilience and remaining true to our brand promise ‘Here for good.’

As Board Chairman, I will continue to interact with my fellow Board members and the Executive Management Team in pursuit of our growth aspirations anchored on sound corporate governance principles. We are optimistic about the opportunities in the market and we will be vigilant and proactive in managing the associated risks. We remain a truly global bank firmly committed to the Zambian market. We will continue to leverage our formidable global network, uniquely diverse talent pool and world class solutions to consistently deliver value to our internal and external stakeholders. Financial Highlights Standard Chartered Bank Zambia Plc continued to be a major key player, as demonstrated by the profitability in the year and the continued growth of our balance sheet. Returns on shareholders’ investments closed off at 38 per cent in 2018, compared to 33 per cent in 2017. This was attributable to growth in revenue. Costs increased by 9 per cent owing to the redundancy provisions booked in 2018, in as a result of the Delivery Channel Optimisation Plan announced in November 2017. The Bank is in the process of rationalising our Retail branch network, and merging the Global Banking and Commercial Banking units and related processing functions. Impairments increased by 36 per cent due to the adoption of IFRS 9 in 2018.

Risk Governance

Risk Management is a core part of the financial and operational management of the Bank. Therefore, Risk Management is essential to consistent and sustainable performance for all of our stakeholders. In 2018, we introduced our new Enterprise Risk Management Framework (ERMF). The new ERMF significantly enhanced our Risk Management approach; in particular, around risk culture, control framework, strategic risk management and Principal Risk Types (PRTs). All risk types, both financial and non-financial, inherent in our business model and strategy are managed and reported in accordance with the ERMF. Through our well-established risk governance structure and risk management framework, it is imperative that we closely manage our risks with the objective of maximising risk adjusted returns, whilst remaining in compliance with the Risk Appetite Statement and regulations. As a Bank, we manage uncertainties through a framework that provides a forward-looking view of the economic, business and credit conditions across the Bank’s products and client segments, enabling us to pro-actively manage our portfolio. The Bank’s portfolio is well diversified across industry sectors, client segments and product offerings. We remain well capitalised and open for business.

Economic Outlook

In 2018, Gross Domestic Product (GDP) growth continued on a positive trajectory, with preliminary data indicating a growth rate of 4 per cent. This was driven largely by positive performance in mining, manufacturing and construction, as well as a stable supply of electricity. Meanwhile, headwinds included under-performance of the agriculture sector, weak credit growth in the private sector, and continued elevation in non-performing loans. Preliminary numbers show that the fiscaldeficit was at 7 per cent of GDP, whilst the trade deficit from January to November 2018 widened to ZMW11.3 billion, from ZMW6.3 billion in the same period in 2017. Average inflation was contained within the 6 per cent to 8 per cent target range for the year, closing at 7.9 per cent in December 2018. Inflation in October was above the target at 8.3 per cent, triggered by depreciation of the Kwacha against tradable currencies, and the pass- through effect of the domestic fuel price adjustment. The Kwacha was relatively stable in 2018, against major tradable currencies most part of the year. The Kwacha traded at an average of ZMW10.47 per United States Dollar (USD) during 2018, from an average of ZMW9.55 per USD during 2017. The relatively high global copper price averaging US$ 6,598 per tonne coupled with demand provided impetus for copper production. Copper output grew by around 8% in 2018 to 862,000 metric tonnes. However, copper closed the year weaker at USD 6,000 per metric tonne largely correlating with news out of China where US trade disputes, and slower infrastructure spending could drive a deceleration in base-metals demand growth. In 2019, macroeconomic stability is projected to be sustained, aided by continued implementation of reforms and policies to support delivery of fiscal consolidation. A key reform enacted in 2018 was the Public Finance Management Act, which for the most part, applies to both central and local government systems. Inflation is projected to remain within the single digit range, with growth driven by both public and private sector investments An IMF mission is expected in the country in March of 2019 for Article IV consultation discussions, towards a potential structured deal for Zambia. Downside risks to growth prospects include continued global trade tension, weak credit growth, addressing domestic arrears and the high level of external debt.

Industry Outlook

The banking sector in Zambia is well capitalised and liquid to withstand both internal and external shocks. At Standard Chartered Bank Zambia Plc, we remain committed to support the prosperity of our clients and the community at large. We pride ourselves in our rich history, our knowledge of the Zambian market, the strength of our global network, and our ability to pro-actively adapt to the changing business environment.

The Board and Management

The Board and Management team continue to provide strong leadership and support to the Bank, as evidenced by the sustained performance and market leadership in 2018. I am delighted to welcome Kweku Bedu- Addo, who was appointed to the Board of Standard Chartered Bank Zambia Plc in 2018 as a Non-Executive Director. Kweku replaced Richard Martin Etemesi, who had served on the Board since May 2014. I am also pleased to welcome two new members to the Executive Management team who joined in 2018: Deep Pal Singh, Head of Retail Banking Zambia and Southern Africa, and Simon Burutu, Senior Credit Officer Zambia and Southern Africa This reflects our continued ability to tap into a unique talent pool from across the Standard Chartered Group.


In 2018, the Bank received awards in recognition of its efforts in digital banking and financial inclusion. Standard Chartered Bank Zambia Plc was named ‘Bank of the Year for Financial Inclusion’ by the prestigious Financial Times Banker Awards. The Bank was recognised for its innovativeness in digitising cash payments to the refugee community at Meheba – Zambia’s biggest refugee camp, via the Straight 2Bank (S2B) Wallet. In partnership with the United Nations High Commission for Refugees (UNHCR) and the mobile money service providers, Standard Chartered Bank Zambia Plc is successfully giving more than 5,000 refugees in Meheba Refugee Camp access to financial services. The Bank was also named ‘Best Digital Bank in Zambia’ by Global Finance in recognition of best in class consumer digital platforms, including the widely acclaimed Standard Chartered mobile app (SC Mobile). The app allows customers to access their accounts, make local and international bank transfers, and pay bills from the convenience of their smartphone.


We closed 2018 with a strong foundation to build on and to deliver our strategic aspirations for 2019, which are centred around continuing to add value to both our internal and external stakeholders. We have refined our client segments to ensure that we become an even more client centric bank in the delivery of our world class solutions; we have enhanced our risk management to make the Bank safer; and we have made strides to become more efficient and innovative in our processes and digital capabilities.

Dr. Caleb Fundanga