The lender’s rest of Africa business contributed 29 per cent of adjusted earnings for 2018, compared with 26 per cent a year earlier.
Sunday 10, March 2019
(Bloomberg) –Johannesburg-based Standard Bank Group has predicted that it will outpace the continent’s fast-growing economies in which it operates.
Stagnant gross domestic product in South Africa means the lender is having to rely on its business in 20 other sub-Saharan countries to compensate for rising costs and almost zero revenue growth in its biggest market.
Sim Tshabalala, the CEO of Standard Bank, said that Kenya, Uganda and Ivory Coast are all expected to expand more than six per cent this year and Standard Bank can do even better.
“Most of these countries are growing at much faster rates than South Africa, together with the fact that we are offering our customers new products and solutions, means we are bound to grow at much faster rates,” added Tshabalala.
While the lender’s South African unit was able to accelerate cost-cutting initiatives and lending in the second half of 2018, it was not enough to offset other pressures, such as lower income from interest rates charged on loans. That resulted in expenses growth exceeding revenue growth, contributing to the lender missing analyst’s turnover estimates, and sending the stock down by the most in a month.
Standard Bank is investing in its digital capabilities to draw more business and increase activity across its existing customer base.
Additionally, the bank seeks to reduce its capital exposure outside of Africa to focus on the continent amid intensifying competition from the likes of Absa Group, which is in 12 countries in the region, and Nedbank Group, which owns a stake in pan-African lender Ecobank Transnational.