Arab Jordan Investment Bank has agreed to buy Standard Chartered's business in the kingdom after securing the approval of the Central Bank of Jordan.
AJIB will absorb the corporate, commercial and institutional banking, and consumer, private and business banking businesses of Standard Chartered in Jordan, the lenders said on Sunday.
All employees of Standard Chartered in Jordan will also be transferred to AJIB and the lenders will work closely in the coming months to help the transition for clients and staff. The banks did not provide a value for the deal.
The agreement with AJIB is in line with the global restructuring of Standard Chartered announced last year and part of the redirection of resources to areas with the greatest potential to drive scale and growth, said Sunil Kaushal, the regional chief executive of Standard Chartered in Africa and the Middle East.
Standard Chartered's plans include exiting Angola, Cameroon, Gambia, Lebanon, Sierra Leone and Zimbabwe as well as consumer, private and business banking businesses in Tanzania and the Ivory Coast.
“Our agreement with AJIB will allow us to accelerate our strategy and leverage on their track record of previous acquisitions to meet the financial needs of our clients,” Mr Kaushal said.
“We will work closely with AJIB to service the needs of our global clients in Jordan. While we will be selling our local business, we will continue to facilitate and be a bridge for international capital flows into Jordan.”
Emerging markets-focused Standard Chartered has been in Jordan for almost 100 years. Other foreign banks have exited the kingdom as consolidation among lenders gathers pace and they focus on core activities.
The agreement aligns with AJIB’s strategy to grow its banking business market share in Jordan, which continues to expand following the bank’s series of landmark acquisitions, said Hani Al Qadi, chairman of AJIB.
“Signing this agreement today is a testimony to the bank’s strong financial position and further enhances AJIB’s presence in the Jordanian banking sector,” Mr Al Qadi said.
“We look forward to working closely with Standard Chartered’s team over the coming few months towards achieving a successful conclusion to this transaction without impact on clients and employees.”
Last year, AJIB acquired National Bank of Kuwait’s banking business in Jordan and in 2014 it bought HSBC's business in the kingdom, which had gross assets of about $1.2 billion.
In October, Jordan's Capital Bank finalised its acquisition of France's Societe Generale's unit in the kingdom and in 2020 it also acquired Lebanon's Bank Audi operations in the country and Iraq.
Last month, Standard Chartered reported a 28 per cent jump in its 2022 pretax profit as operating income rose amid higher global interest rates.
The London-listed bank’s profit before taxation for the 12-month period to the end of December rose to $4.3 billion, while its operating income for the period climbed 11 per cent to $16.3 billion.
In the Middle East, the bank's underlying profit before tax rose 4 per cent to $819 million as operating income jumped 7 per cent to $2.6 billion, driven by growth in transaction banking, financial markets and retail.
In January and last month, First Abu Dhabi Bank, the UAE's biggest lender, denied media speculation that it was considering a takeover bid for Standard Chartered. It evaluated making an offer but abandoned the move which, if successful, would have made it among the top 10 banks globally by market value, the bank added.