Standard Bank - London Costs 'Too High'

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Standard Bank Group has announced its intention, over time, to halve the amount of capital utilised in operations outside of Africa from $3bn to approximately $1.5bn.

Group CEO Jacko Maree says: 'The largest portion of capital outside Africa is in our subsidiary bank in London and the strategic requirement for a London base has been re-evaluated. We remain convinced that the London presence as a legal entity with a banking licence is critical for the growth of our Corporate & Investment Banking franchise. However, the capital base is too big and the costs are too high.

'We aim, therefore, to make better use of the prudential limit for foreign currency lending on Standard Bank South Africa's balance sheet for transactions in our core sectors which will reduce the capital demand in London, but increase the capital requirements in South Africa'.

The bank also said that a narrower focus with robust productivity assessments of each business line should further reduce capital demand outside Africa, offsetting the increased capital demand the bank expects to originate from its focus on African and natural resources businesses.

Standard Bank Group has initiated a number of cost saving strategies in its International operations which are targeted to save $75 million on an annualised basis.

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