SCB has closed 50% of their branches as they were found less profitable and costly.
By Sayyed Shehzer Abbas
Banking is Pakistan is much challenging as competitors introduce latest features to their banking systems. Standard Chartered Back (SCB) is known for its high-class banking services. Its popularity is much more among the corporate sectors. Still customers are facing problems with accessibility since it has reduced its branch network by more than 50% over the most recent five years.
The corporate banking champion had around 100 branches in 2015 throughout the country. This number was later reduced by 50% to only 49 branches with only 3 Islamic branches for 10 urban areas.
The administration of the bank has closed down branches that were resulting in less profits and costly as far as operations are concerned. They were more focused towards corporate banking and digital banking as the fundamental business methodology to operate in Pakistan.
The bank seems to be more interested in digital banking and that is the reason we are experiencing a shift in their business structure. They are heavily investing in corporate sectors and providing their customers with top notch digital banking services. Moreover, this new business strategy has also revealed that the company is enhancing its clients’ experience by providing innovative solutions to its loyal customers.
Notwithstanding, a dominant part of the branches are situated in luxurious regions, retail outlets, and business spaces.
Past five years also showed that the company is trying to get rid of their subsidiaries of leasing and modaraba companies. This can help in reducing the pressure on branches and help them in focusing more on their new strategy. Divestment to Orix Leasing Company in 2016 proved that too when SCB joined hands with the company.
The matter of branch banking may be restricted for the bank, yet it has investigated different approaches to drive income streams in various regions with less contest.
For example, the bank developed its solid portfolio to be a noticeable piece of government provided Sukuk. Most recently it was noticed when the bank got a special status by State Bank of Pakistan to be a clearing and settlement bank for Yuan. This venture would be primarily for the CPEC projects for giving facilities to merchants of the two sides, China, and Pakistan.
Their new strategy seems to be profitable too. In 2019, the bank secured highest ever profits of over Rs. 16 billion and become the third most productive bank in the country. This means that SCB is indicated as the most profitable bank per branch. Profits in 2020 were slightly less with Rs. 13.132 billion as compared to Rs. 16 billion out of 2019.
The bank may not be seen on the podium anymore, but they still stand at a noticeable position with deposits outreaching Rs. 500 billion. Their business strategy proves that the bank has now a totally different approach and there are not many competitors in this part of the banking industry.