Highlights:
- City Bank is the only local lender to sign an NDA
- Banks cite employee integration costs, salary disparities and cultural differences
- Deposit pricing differences could shrink margins for acquiring banks
- Customers may withdraw deposits rather than remain with the buyer
- Standard Chartered's retail business employs around 1,500 workers
- The proposed sale includes Tk8,000 crore in retail deposits
Several banks that initially expressed interest in acquiring Standard Chartered Bangladesh's retail banking business have stepped back, citing concerns over the cost and complexity of absorbing around 1,500 employees, differences in deposit pricing, and customer behaviour.
City Bank is the only local lender to have signed a non-disclosure agreement (NDA) with Standard Chartered to assess the proposed deal's financial viability. Other banks approached for the transaction have declined to proceed, according to banking industry insiders.
BRAC Bank, Mutual Trust Bank (MTB), Pubali Bank and Eastern Bank were among the lenders approached to sign the NDA. However, they backed away after preliminary discussions, mainly over the implications of integrating Standard Chartered's retail banking workforce.
A senior City Bank executive, speaking on condition of anonymity, said the bank had signed the NDA but had yet to decide whether to proceed. "Everything depends on the cost-benefit analysis. Integrating the employees is a major issue," the executive told TBS.
On 8 October, Standard Chartered announced it was exploring the sale of its Wealth and Retail Banking business in Bangladesh as part of a strategy to focus on segments where it has greater scale and a more differentiated offering.
The bank said it had held informal talks with local lenders before the announcement.
Standard Chartered, which has operated in Bangladesh for more than 120 years, said it would support employees affected by the sale fairly and transparently.
Deposit pricing, customer behaviour
MTB, which had initially shown interest, also declined to sign the NDA. MTB Managing Director Syed Mahbubur Rahman said Bangladesh is a different market.
"Someone who keeps money in Standard Chartered is happy to receive 2% interest, but when that person comes to MTB, they may demand 8%. Our lending rates are more or less the same, so if we raise deposit rates to that level, our interest margin will shrink," said.
He further said most retail deposits are held for three or six months, making it uncertain how much of Standard Chartered's deposit base would stay with the buyer.
Depositors might decide that the acquiring bank was not suitable for them and move their money elsewhere, he said. "In that case, the deposits would be redistributed across the banking sector rather than retained by the buyer."
'No comparison with Indian StanChart'
In April 2026, India's Kerala-based Federal Bank agreed to acquire around 450,000 credit cards from Standard Chartered's standalone retail credit-card portfolio in the country.
The deal is expected to close by the end of 2026. The transaction value was not disclosed, while the final portfolio size will depend on the timing of the transfer and customer consent.
Regarding the development, Mahbubur said, "In India, banks such as HDFC and ICICI are much stronger competitors to Standard Chartered. Many employees at those banks also earn more than their counterparts at Standard Chartered."
He further said the situation in Bangladesh is different. "Here, Standard Chartered is the number-one bank. We cannot assess the Bangladeshi market by applying the same logic used in India or other international markets," he said.
He warned that customers could shift deposits elsewhere if they were unwilling to bank with the buyer. "If Pubali acquires the business, some customers may move their deposits elsewhere," he said.
Different salary structure, corporate culture
A senior Pubali Bank executive said the bank had held preliminary talks but declined to sign the NDA, citing concerns over employee integration, corporate culture and pay disparities.
"Our corporate culture and salary structure differ from those of multinational banks, which could create conflicts," the executive said.
Several banks received the NDA but were reluctant to proceed, mainly over the workforce issue, the executive added. Around 1,500 of Standard Chartered's 1,800 employees work in retail banking, raising questions over whether the buyer would have to absorb them all.
If no buyer emerges, Standard Chartered could follow HSBC's example. HSBC closed its retail banking business in Bangladesh and offered employees compensation under a golden-handshake arrangement, the executive said.
Business profile
The proposed sale involves a substantial retail banking operation. Standard Chartered's retail and CMSME loan portfolio stood at Tk8,479 crore at the end of 2025, accounting for nearly 28% of its total loan portfolio of Tk30,423 crore, according to its financial statements.
The bank's total deposits exceeded Tk40,000 crore, of which around Tk8,000 crore, or approximately 20%, came from retail customers.
The proposed sale comes as Standard Chartered reduces its physical footprint and changes customer services, encouraging cashless transactions.
Five years ago, the bank had around 24 branches and 83-96 ATMs. It now operates 18 branches and 70 self-service terminals, including ATMs and cash-recycling machines.
It introduced a Tk50,000 minimum balance requirement for new accounts several years ago and recently discontinued transfers to mobile financial service (MFS) accounts. Customers have also reported app outages for maintenance at least twice a month.