How StanChart deliberately became a tier-two lender

Standard Chartered is pivoting to wealthy clients and digital banking as its market share shrinks. [File, Standard]

From the common man’s perspective, Standard Chartered’s (StanChart’s) classification as a tier II bank may seem like a demotion.

Clearly, how can one of the oldest multinational financial institutions not be a tier-one bank?

Yet on paper, this is evidently a calculated risk that is actually paying off.

The common man may argue: “It is because the bank closed some of its branches. And they may be right. Some time back, the bank closed its Meru and Nyeri branches, opting to serve its clients digitally.

But StanChart is not just a bank for the common man. And the bank is not really shrinking in size by closing branches; it is just repositioning its doors.

For example, did you know you can do your banking business on-site while having coffee? This is because StanChart has a co-sharing workspace with Artcaffe.

In the last two years, the bank has been, rather aggressively, shedding its image as a walk-in retail type of a financial institution in order to adopt a sophisticated high-net-worth look.

“The market has matured. You have seen reports that we have close to 7,000-dollar millionaires in Kenya,” said StanChart Head, Wealth and Retail Banking, Kenya and East Africa, Edith Chumba.

Chumba spoke recently while unveiling yet another product, dubbed VCC (Variable Capital Company) - Signature Select, to facilitate investment diversification.

Whereas the product was launched in September 2026, four months to the date of launch after approval by the regulator, it had already amassed Sh2.5 billion ($20 million) in assets under management.

“Standard Chartered is well positioned to tap into this market. We are seeing a lot more clients coming to us asking for more diversified, sophisticated solutions. The platform we launched today speaks to that need,” she added.

And to attract these sophisticated clients, the lender required sophisticated solutions, hence the co-sharing space with ArtCaffe.

 Early in the year, the bank opened its second ArtCaffe-Standard Chartered co-shared space in Nanyuki, targeting the elite expatriate community in Laikipia County.

A similar branch is located in Upperhill.

But while the bank seems to be fading from the larger public eye, it is attracting the right clients - the affluent - which is positive to its bottom line, at least according to the regulator.

The Bank Supervision Annual Report by the Central Bank of Kenya (CBK) shows the bank managed to reduce the size of its bad loans both generally and for mortgages.

The number of deposit accounts holding Sh500,000 and above grew slightly by 0.7 per cent from 35,966 to 36,203 in 2025, while those holding less than Sh500,000 dropped by 7.9 per cent from 281,999 to 259,618 in the same period.

Total deposits dropped 4.1 per cent in the period to Sh284.7 billion from Sh295.7 billion in 2024.

CBK criteria

The growth in gross loans in the period was slight, from Sh161.481 billion in 2024 to Sh161.996 billion in 2025.

Non-performing loans (NPLs) sharply reduced from Sh12 billion in 2024 to Sh8.8 billion in 2025. This is a drop of 26.7 per cent.

The same happened on the mortgage side as NPL accounts reduced from 142 to 109. Overall, the bank’s market share shrank in the period from 5.4 per cent to 4.5 per cent in 2025, necessitating the drop to tier II status under CBK criteria.

“The combined market share of banks in the medium peer group increased to 23.2 per cent in December 2025, from 16.7 per cent in December 2024. This was due to the entry of Standard Chartered Bank from the large peer group and Sidian Bank Ltd from the small peer group to the medium peer group,” says CBK in the report.

Its mortgage market size also went down to five per cent from 6.5 per cent, closing the year with 1,660 mortgage accounts compared to 1,899 in the previous year.

Outstanding mortgage loans also reduced to Sh15.3 billion compared to Sh18 billion in 2024.

Bad mortgage loans reduced by Sh400 million from Sh1.4 billion to Sh1.0 billion.

The bank’s asset base closed the year at Sh364.5 billion, down from Sh385.4 billion in 2024. This is as pre-tax profit reduced as well to Sh16.4 billion from Sh27.8 billion.