Standard Bank's decision to close Independent Media’s account: Unravelling the reputational risk debate

South Africa - Cape Town - 15 August 2023 - Standard Bank. Corporate Logo Stock Images. Photographer: Armand Hough / African News Agency (ANA)

South Africa - Cape Town - 15 August 2023 - Standard Bank. Corporate Logo Stock Images. Photographer: Armand Hough / African News Agency (ANA)

Published Sep 12, 2023


Standard Bank is set to close Independent Media’s bank account shortly. While it cites "reputational risk" as the primary reason behind its decision, many are left wondering whether the bank itself poses a significant reputational risk to citizens’ money instead, especially considering its role in several high-profile controversies.

Independent Media, a significant publishing organisation in South Africa with the largest share of voice catering to the country’s broadest citizen groups, has found itself at the centre of a maelstrom that raises questions about the influence of competitors in the banking sector.

Standard Bank's assertion that closing Independent Media's account is due to "reputational risk" has been met with scepticism by many observers. Critics argue that the decision appears to be influenced by Independent Media's adversarial reporting and criticism of certain entities that the bank may be in bed with.

Media competitors of Independent Media have also not hesitated to capitalize on this situation, with some making public statements insinuating that Independent Media's reporting and editorial stance were responsible for damaging the publisher’s own reputation, which has an impact on the bank.

There are several things wrong with this line of argument. First, that the bank does not have editorial oversight over Independent Media articles (and if it does at other publishers we are in greater trouble as a democracy than we think); and secondly, had the bank not embarked on a strategy to terminate the entire Sekunjalo Group, then no-one would have been the wiser that Independent Media had a Standard Bank account in the first place. Client relationships are supposedly private and confidential…

Standard Bank accusing anyone else of being a risk to its reputation is hypocritical in the extreme. Critics point to the bank's own history of controversies and legal issues that have raised concerns about its reputation, such as allegations of collusion and price-fixing.

While it is crucial for financial institutions to uphold ethical standards, there can be no question that Standard Bank has singled out Independent Media (and the Sekunjalo Group) with the sole purpose of unbanking the media house, and thus silencing Independent Media’s often critical commentary on the unbridled power of an unchecked financial sector, South African politics and other matters that have an impact on democracy.

A run on the bank?

A "run on the bank" occurs when large numbers of depositors withdraw their funds due to concerns about the bank's stability or integrity. In this case, the perception that Standard Bank may be influenced by external pressures, such as competitors or political interests, could erode depositor confidence.

The South African banking sector, like any other, relies heavily on public trust. If depositors begin to question the fairness and impartiality of Standard Bank's actions, it could lead to a significant outflow of funds, potentially destabilising the bank, and the overall financial sector.

The decision by Standard Bank to close Independent Media's bank account has far-reaching implications that extend beyond the realm of banking. It raises questions about the role of competitors in influencing such decisions, the credibility of accusations of "reputational risk," and the potential consequences for the bank itself.

Factor in the increase in unemployment and the extrapolated impact on the fiscus of several thousand people no longer being part of the economy because of the loss of jobs through the banks’ actions, and we have a perfect storm on the horizon.

Ultimately, the South African public, regulators, and stakeholders will closely monitor the developments surrounding Standard Bank's decision and its impact on Independent Media, the banking sector, and the broader media landscape.

In a country where media freedom and financial stability are of paramount importance, finding a fair and just resolution is crucial for all parties involved.

Adri Senekal de Wet, the Editor of Business Report.

Adri Senekal de Wet is the executive editor of Business Report