Standard Chartered to exit SME business in UAE next month

Dubai: Standard Chartered Bank plans to close thousands of accounts belonging to small UAE businesses next month, but the British bank will continue with a select number of clients from this segment.

“The group has decided to exit part of its SME business in the UAE as part of its broader efforts to sharpen its strategic focus, exiting non-strategic businesses, including those where increased regulatory costs could undermine their economic viability,” the bank confirmed to Khaleej Times in an e-mailed statement on Monday.

The London-listed bank has notified thousands of UAE small and medium enterprise customers that it is closing their accounts as it responds to pressure from US regulators to cut its risks.

“We regret to notify you that Standard Chartered Bank will no longer be able to provide banking services to you, and your account[s] will be closed 30 days from the date of this letter,” the bank wrote in a letter to customers dated October 9. The letter has angered UAE customers, who say they have not been given enough time to close their accounts.

Earlier this year, the bank announced its plan to almost entirely exit the SME banking sector in the UAE and retain only a small number of high-value customers.

The bank didn’t disclose the exact number of accounts that would be closed. But said those affected by Standard Chartered’s exit have an annual sales turnover of between $1 million and $35 million.

In August, the Central Bank of the UAE said that between 1,400 and 8,000 Standard Chartered accounts in the country were expected to be affected by the US settlement.

“The bank will retain a select number of clients from this segment in the UAE; those will now be serviced under our newly created Commercial Clients segment. This newly-formed segment looks at banking mid-sized enterprises with annual sales turnover in the range of $10 million up to $150 million with a strategic focus on clients that will trade, expand and invest across Asia, Africa and the Middle East,” the bank said.

Standard Chartered said it would honour existing borrowing agreements with customers with loans, allowing them to pay back outstanding amounts under the existing repayment timetable.

“We are making every effort to ensure that any inconvenience for those clients impacted is minimised and have set up a dedicated contact centre, provided clients with a detailed exit guide and a set of FAQs [frequently-asked questions] that minimise confusion and answer our clients’ queries transparently,” the statement said.

“The UAE remains one of Standard Chartered’s leading franchises globally and the move allows the bank to reposition itself for further growth by focusing its efforts on corporate and institutional, commercial, private banking, retail and Islamic banking,” the statement concluded.

— abdulbasit@khaleejtimes.com