Stanchart plans Nigeria expansion
STANDARD Chartered (Stanchart)’s Nigerian unit is joining the rush to grab a larger share of the consumer-banking market in Africa’s most populous nation, targeting a five-fold increase in customers over the next two years.
“Retail is where we’re going to see exponential growth,” Lamin Manjang, the chief executive for Stanchart’s Lagos-based subsidiary, said in an interview. “It’s just a logical expansion of our portfolio” so the company can be diversified should there be a downturn in other parts of the business, he said.
Stanchart, which has focused on corporate banking since opening an office in Nigeria 20 years ago, plans to expand retail banking to 15 percent of local revenue over the next two years from 6 percent, the CEO said. Retail customers are expected to increase to about 500 000 from 100 000 by using digital technology that enables customers to open an account in less than five minutes, Manjang said.
The push by the London-based emerging-markets lender comes as banks scurry to meet a central bank directive to increase their loan-to-deposit ratios to 60 percent by the end of this month. With only two out of the six biggest banks meeting the threshold, consumers and small- to medium-sized businesses are being bombarded with offers that allows them to take out loans via a text message.
The increased use of technology and rapid urbanisation is also opening up a market in a nation of 200 million people in which a quarter don’t have financial services.
Standard Chartered is looking for 5 percent to 10 percent growth in its overall loan book this year. In personal loans, it has doubled the size of the facility it offers to 20 million naira ($55 300), Manjang said.
“Within our retail portfolio we have a segment called business banking,” he said. “It is a segment we see a lot of opportunities for growth. Currently, we believe the scale of that business is small relative to opportunities we see in that market.”
The company would like the central bank to relax the penalty on the loans-to-deposit ratio target it announced in July as part of a raft of measures aimed at stimulating the economy by boosting access to credit.