Standard Chartered is making a significant push into mergers and acquisitions (M&A) advisory, hiring senior bankers from competitors to strengthen its dealmaking capabilities in Asia and Africa, according to people familiar with the matter.
Strategic Expansion
The British lender has recruited at least five senior M&A bankers in recent months, including from firms such as Goldman Sachs and JPMorgan. The hires are part of a broader strategy to expand its investment banking franchise beyond its traditional strength in trade finance and foreign exchange.
Standard Chartered's M&A advisory revenue has grown by 50% in the first half of 2023 compared to the same period last year, the bank said in its interim results. However, it still lags behind larger Wall Street rivals in the region.
Key Appointments
Among the new hires is a managing director focused on technology M&A in Asia, who joined from Goldman Sachs. Another senior banker from JPMorgan will lead healthcare deals in the region. The bank has also appointed a new head of M&A for Africa, based in Johannesburg.
"Standard Chartered is clearly signaling it wants to be a bigger player in M&A, especially in cross-border transactions where its network in Asia and Africa is a differentiator," said a senior investment banker at a rival firm, who asked not to be named discussing private matters.
Focus on Cross-Border Deals
The push comes as M&A activity in Asia-Pacific has slowed in 2023, with deal volumes down 25% year-on-year, according to Dealogic. However, Standard Chartered sees opportunities in advising companies from China and other Asian markets looking to expand in Africa and the Middle East, and vice versa.
The bank is also targeting deals in sectors such as renewable energy, infrastructure, and technology. It has recently advised on several high-profile transactions, including the sale of a stake in a Middle Eastern telecoms company and a merger between two Asian fintech firms.
Competitive Landscape
Standard Chartered faces stiff competition from global investment banks like Goldman Sachs, Morgan Stanley, and JPMorgan, as well as regional players such as HSBC and DBS. But the bank believes its deep local knowledge and long-standing relationships in emerging markets give it an edge.
"We are not trying to compete with everyone on every deal. We focus on where we have genuine strength and can add value," said a Standard Chartered spokesperson, declining to comment on specific hires.
Outlook
The M&A push is part of a broader transformation under CEO Bill Winters, who has been restructuring the bank to improve profitability. The bank is targeting a return on tangible equity of 10% by 2024, up from 6% in 2022.
Standard Chartered's shares have risen 15% this year, outperforming the European banking index. Investors will be watching closely to see if the M&A expansion can deliver sustainable revenue growth.
