Ailing Standard Chartered ‘rejected buyers for African division’

LONDON — Standard Chartered, the UK lender under pressure to reverse two years of declining earnings, rebuffed at least one potential buyer of its African operations last year, said two people with knowledge of the talks.

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The bank received an unsolicited, informal expression of interest for the division, said the people, who asked not to be identified because the details are private. They declined to identify the group. Standard Chartered was not interested in selling the business, said the people.

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Standard Chartered CEO Peter Sands has come under pressure from investors amid a 29% slump in the shares last year. The London-based bank, which gets about three-quarters of its earnings in Asia, last week announced plans to cut about 0m by eliminating 4,000 jobs and shutting equities trading to revive earnings.

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“The business in Africa is basically a network of coverage guys with limited on-the-ground distribution, so it’s fairly difficult to sell it,” said Chirantan Barua, an analyst at Sanford C Bernstein, who rates the stock underperform. “On the flipside, there is nothing significant that they could sell today that would help the capital situation materially.”

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Standard Chartered shares slipped 3% to 903.3p in London on Wednesday morning, falling as much as 3.5%. It is the biggest intraday drop since October last year.

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Standard Chartered has offices in 16 African countries, providing financing services to firms and consumers, according to its website. The bank has been among the top three arrangers of syndicated loans in the sub-Saharan region since 2010, according to Bloomberg data.

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Operating profit at the Africa business fell 27% to 9m in the first six months of last year from the year-earlier period.

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Bloomberg