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Standard Chartered to shut half of Nigeria branches

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Standard Chartered Plc is closing about half its Nigerian branches in a pivot to digital banking, according to people familiar with the matter, as the finance industry comes under pressure from mobile money providers.

The London-listed lender’s local unit has already started to shut some offices in December and will eventually operate only 13 branches in the West African nation, a document seen by Bloomberg News showed, down from about 25 previously.

Standard Chartered is instead strengthening mobile banking and recruiting agents to reach new customers and handle cash deposits and withdrawals across Africa’s biggest economy, said the people, who asked not to be identified because they aren’t authorised to speak publicly.

A spokeswoman for the bank declined to comment and said it would address future plans at the “appropriate time.”

The shift by StanChart mirrors efforts by Nigerian lenders to embrace digital banking amid a fintech boom that’s put much of Africa at the cutting edge of the revolution in mobile money. Instead of opening more physical branches, banks including Access Bank Plc and First Bank of Nigeria are also curbing costs by building networks of authorized agents, or people within communities to sell their products and services.

Standard Chartered has focused on corporate banking since establishing a presence in Nigeria in 1999. But it’s recently looked to expand its retail base and outlined a target in 2019 to grow the number of its customers fivefold from 100,000 in about two years by using digital technology to onboard clients faster.

The lender also plans to start digital lending to process small loans quicker and increase the volume of retail credit, according to the people.

With a population of over 200 million people, of which more than a third have no access to financial services, Nigeria has seen an explosion in demand for payment solutions and lending outside traditional banking as businesses build on the rapid spread of mobile phones. Financial-technology companies have also benefited as customers sought to reduce physical contact during the pandemic.

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BUSINESS

European stocks set to climb as traders assess earnings, economic data

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European markets are set to advance cautiously on Monday as investors continue to monitor corporate earnings and key economic data points, assessing the risk of recession.

Britain’s FTSE 100 is seen around 19 points higher at 7,459, Germany’s DAX is expected to gain around 54 points to 13,628 and France’s CAC 40 is set to add around 21 points to 6,493.

The pan-European Stoxx 600 index closed Friday’s session down around 0.8% after an unexpectedly strong U.S. jobs report lowered expectations for a recession, and in turn increased the likelihood of the Federal Reserve tightening monetary policy more aggressively to bring down inflation.

Markets in Asia-Pacific were mixed overnight, with Hong Kong’s tech-heavy Hang Seng index weighing down the region.

U.S. stock futures were flat after the S&P 500 closed out a third straight positive week, with investors turning their attention to a key inflation report on Wednesday.

On the data front in Europe, August’s Sentix economic sentiment index for the euro zone is due Monday morning.

Corporate earnings continue to drive individual share price movement in Europe, with Siemens Energy, Porsche and BioNTech among the companies reporting before the bell on Monday.

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Stocks fall after strong July jobs report points to more Fed action

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Stocks fell Friday in a volatile trading session after the July jobs report was much better than expected, as investors assessed what a strong labor market would mean for the Federal Reserve’s rate tightening campaign.

The Dow Jones Industrial Average shed 96 points or 0.29%.The S&P 500 fell 0.67% and the Nasdaq Composite was down 1.01%. Losses were offset by bank stocks, which rose on hopes that interest rate hikes will continue at a solid clip. Energy stocks also gained, but technology companies slumped.

The labor market added 528,000 jobs in July, easily beating a Dow Jones estimate of a 258,000 increase. The unemployment rate ticked down to 3.5%, below the 3.6% estimate. Wage growth also rose more than estimated, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation is likely still a problem.

Stocks opened lower following the report, even as it seemed to indicate the economy was not currently in a recession. Job growth was expected to slow as the Fed continues to hike interest rates to tame inflation, but this report shows a labor market still running hot. That means the central bank may act more aggressively at its next meeting.

“Anybody that jumped on the ‘Fed is going to pivot next year and start cutting rates’ is going to have to get off at the next station, because that’s not in the cards,” said Art Hogan, chief market strategist at B. Riley Financial. “It is clearly a situation where the economy is not screeching or heading into a recession here and now.”

The report is a crucial one as it’s one of two the central bank will see before it decides how much to raise rates at its September meeting. The Fed will have another jobs report and two more consumer price index numbers to weigh before it makes its next rate decision.

Major averages posted their best month since 2020 in July on the hope the Fed would slow the pace of its hikes. The S&P 500 added 9.1% last month.

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Investors dump Chinese stocks, bonds amid global recession fears

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Foreign investors continued to cut holdings in Chinese bonds in July and dumped equities for the first time in four months, according to a report by the Institute of International Finance (IIF).

Emerging markets (EM) posted a fifth straight month of portfolio outflows, setting the longest such streak in records going back to 2005, as global recession risk, inflation and a strong dollar drew away cash, the report released on Wednesday showed.

Chinese debt witnessed outflows of about $3bn last month, while $6bn exited other EM, IIF estimated.

If confirmed by official data, it would be the sixth consecutive month of foreign outflows from China’s $20 trillion bond market.

During the same period, China’s stock market witnessed $3.5bn of foreign outflows, compared with marginal inflows of $2.5bn in other EM, the global financial services trade group added.

The benchmark CSI 300 Index dropped 7 percent, down every week in July, as domestic COVID-19 flare-ups, property woes and global recession risks weighed on the market.

“China’s A-shares saw a range-bound, generally weaker trend since July under both domestic and overseas influences,” China International Capital Corporation (CICC) said in a note.

Data showed the world’s second-largest economy slowed sharply in the second quarter, missing market expectations with only a 0.4 percent increase from a year earlier.

With the fallout of the Ukraine war continuing, Sino-US tensions over Taiwan mounted as US House of Representatives Speaker Nancy Pelosi visited the self-ruled island claimed by Beijing.

“For the coming months, several factors will influence flows dynamics, among these the timing of inflation peaking and the outlook for the Chinese economy will be in focus,” IIF said.

Overseas investors have been reducing holdings of Chinese bonds since February, as diverging monetary policies kept Chinese yields pinned below their US counterparts.

The People’s Bank of China has been easing policy to aid a COVID-hit economy, while the US Federal Reserve has been hiking rates to fight soaring inflation

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