Why They Are Top of the Heap. Standard Chartered Bank Storms with Excellence
Banking, Finance, Standchart

It is always refreshing to hear titans of the banking industry reassure stakeholders that “we are here for good”. This statement is attributed to Michael Mundashi, chairman of the global bank that has been resident in Zambia for the past 110 years – Standard Chartered Bank. Investing and innovating was their strategy going into 2015 in the hope of taking advantage of the improved business climate in Zambia ahead of the macro forces cited in our earlier blog found here. A new executive management team brought a fresh perspective to the bank and ensured that they traversed through the year with confidence. This can be seen from the many accolades the bank won during the year from Euromoney to African Banking Awards.

The economic outlook from Gross Domestic Product (GDP) to high inflation looked certain to be a thorn in the bank’s shoe. However, the numbers show a bank that was adaptable to the challenges that came its way.

Combined revenue from interest income, fees, commissions and other income rose 11% from 2014 to 2015. Interest income was the value generator as it celebrated a positive gain of 24% whereas the other streams of revenue dipped (those loans are creating value literally). EBITDA rose marginally by 2% on the back of a 74% increase in operating cash flows for the period under review. Signs of well managed fixed costs (Volatile EBITDA signals high fixed costs).

The bank experienced a slip in their loans to asset and return on asset ratios by 7% and 2% respectively. However, net interest margin gained by 2%. They declared a dividend that was 27% short of their 2014 payment which was reflective of the 27% reduction in earnings. This shows that the bank maintains a consistent dividend payout policy that is in tune with earnings.

Due to the economic climate, the bank’s cost of sales rose by 56%. The macro factors cited in our earlier blog on what impacts banks is real. However, there was also an increase of 60% on their spend on property, improvement of property and vehicles. Image in this industry is everything.

For the shareholder, the bank continues to make good use of its capital employed by the 11% improvement however, return on equity fell by 7%. With a 10% reduction in staff over the year, they were able to improve their Labour productivity by 24%.


The signs of prudent leadership are evident at the bank and this breaths confidence in investors. Macro forces may be harsh but Standard Chartered bank are poised to rise above. A turn in the macro forces to the better will certainly ensure an improved return on investment for its shareholders.

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