STANDARD Bank, the biggest bank in sub-Saharan Africa, by Tier-1 capital (shareholders’ equity and retained earnings) on Friday unveiled a new post-pandemic return-on-investment (ROE) target range of between 17 and 20 percent, as it accelerates its 2025 Ambition strategy towards transforming into a customer-centric business.
Speaking during a virtual presentation, on Friday, Standard Bank chief executive, Sim Tshabalala, said the bank aimed to drive sustainable growth by leveraging its competitive advantage, brand strength, infrastructure and client base.
“We’re feeling confident and energised. We know exactly what we’re going to do. We’re sure, we’re going to be able to meet these targets,” Tshabalala said.
In setting out the bank’s ambitious financial goals, Tshabalala said the targets were challenging but realistic – and the company was committed to achieving them.
“By protecting and growing our traditional markets, and by finding new ones, it is our intention to increase our revenue by 7 to 9 percent a year. As the effects of the pandemic recede, we will keep our credit loss ratio in the range between 70 and 100 basis points,” said Tshabalala.
The 160-year-old bank is organised into three instead of two business units, consumer and high net worth clients; business and commercial clients; and wholesale clients, which simplifies the structure and reduces costs.
Consumer and high net worth clients chief executive, Funeka Montjane, said that business aimed to increase its client base from the current 15 million, including 9.7million in South Africa, to 25 million, including 15 million in South Africa, and 10 million in Africa regions, undergirds the blue’s ROE growth strategy.
“Linked to that is our ability to sell more solutions, particularly non-financial solutions, which is equally important,” she said.
Tshabalala said, as part of 2025 Ambition, Standard Bank has chosen 10 ecosystems that will enable the group to access pools of value that were collectively worth more than $1 trillion (R15trl).
“Our chosen ecosystems are all adjacent to traditional finance, and all will make a significant contribution to our clients’ lives and businesses, and over time, to the group's revenues and earnings,” he said.
Tshabalala conceded criticism levelled against the bank in the past for lacking focus, or for trying to be all things to all people.
“Whatever we think of those views, we must admit that there was perhaps a grain of truth in the criticism. We have removed that grain,” he said.
He said the bank had been confronted with a number of problems in the past decade.
“This is a sobering list – loss of market share in retail banking in South Africa; a costly core banking modernisation in South Africa and slow progress on improving efficiency; losses at ICBCS; and insufficient integration with Liberty,” said Tshabalala, indication that the group had made progress in addressing the challenges.
He said, at the moment, Liberty was independent and operating at arms length to Standard Bank. Until the shareholders approved the scheme of arrangement in October, as well as the competition authorities, the group could not speak about how that will work.
“The transaction increases our relevance to our clients, we will be there for our clients whether they want to make an investment, insure themselves or to buy a home ,” he said.
Standard Bank shares closed 0.12 percent lower at R136.07 on Friday.
BUSINESS REPORT ONLINE