Letters have been sent out notifying “as many as” 8,000 UAE customers that their accounts will be closed within 30 days from the date of the letter.
The letter also gives customers options to consider within a specified time frame and details what will happen to their loans, trade facilities and deposits.
This news comes after the New York Department of Financial Services (NYDFS) gave the bank 90 days to withdraw from high-risk client relationships within UAE divisions, after it continually failed to comply with anti-money laundering measures agreed in a 2012 settlement.
However, Standard Chartered said it was already planning to wind down UAE accounts prior to the DFS’s order because the return from certain SMEs was not sufficient enough to be financially viable.
The bank is now developing its commercial client basis by cherry-picking clients with larger returns, who will be serviced under the newly created commercial clients segment.
This sector focuses on mid-sized enterprises with an annual sales turnover between $10m to $150m, centring on clients trading and investing across Asia, Africa and the Middle East.
The bank also said that recent changes to the client due diligence (CDD) process – which has increased the amount of data the bank holds for each client – is not cost effective when dealing with smaller customers.
When International Adviser asked Standard Chartered why UAE accounts in particular were being closed, the bank said other SMEs are going to be reviewed as well.
In a statement, the bank said: “We are making every effort to ensure that any inconvenience for those clients impacted is minimised and have set up a contact centre, provided clients with a detailed exit guide, and a set of FAQs that minimise confusion and answer our clients’ queries transparently.”
