Published: 09 May 2025

British banking giant Standard Chartered PLC (StanChart) has reported a US$172 million loss in 2024 tied to the sale of its Zimbabwean subsidiary, citing severe foreign exchange translation losses that reflect the harsh toll of Zimbabwe's long-standing currency instability on foreign investors.

The loss, detailed in the bank's first-quarter trading update, includes a US$190 million hit in foreign exchange translation losses, underlining the extent to which the country's volatile exchange rates eroded value over several years.

"During 2024, the group disposed of its investments in subsidiaries and the gain/loss on disposal was SCB Zimbabwe Limited & Africa Enterprise Network Trust (loss: US$172 million including translation adjustment loss: US$190 million)," the update stated.

The Zimbabwean divestment was part of StanChart's broader withdrawal strategy from non-core markets - including Angola and Lebanon - which the bank initiated in April 2022 amid rising operational costs and an increasingly challenging macroeconomic environment.

In Zimbabwe, those challenges were dominated by currency volatility, hyperinflation, and difficulties in repatriating profits, all of which made continued operations financially unsustainable.

"The loss reflects years of value erosion due to exchange rate volatility," the report added, highlighting how exchange losses ultimately dragged down the group's earnings.

The broader financial impact from the group's exit across multiple markets was partially offset by a US$17 million gain from the disposal of Shoal Limited and Autumn Life Pte Ltd. However, losses from SCB Angola SA and SCB Sierra Leone Limited, which totaled US$45 million, further weighed on StanChart's financials.

In total, the group recorded US$232 million in net losses from businesses sold or held for sale in 2024. The losses were included in the US$332 million booked under "other items," which also comprised a US$100 million charge related to Korea equity-linked securities.

FBC Holdings Limited, a Zimbabwean financial services group, acquired StanChart's Zimbabwean unit for approximately US$24 million and rebranded it as FBC Crown Bank Limited.

StanChart said the sale formed part of its "Fit for Growth" initiative, launched last year to enhance operational efficiency through simplification, standardisation, and digitisation. The strategy is expected to generate US$1,5 billion in cumulative cost savings over the next three years.

The Zimbabwe exit, however, has become emblematic of the broader risks facing foreign investors in the country's volatile economic climate, with the US$172 million loss serving as a cautionary tale about doing business in markets plagued by financial instability and regulatory unpredictability.
- the independent

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