Story audio is generated using AI
Standard Bank paid its biggest interim dividend yet after reporting a record R26bn interim profit, putting it on course for a bumper full-year performance as group CEO Sim Tshabalala prepares to hand over the reins to a new leader next year.The group’s first-half profit puts it on course to be the first South African lender to breach the R50bn annual profit mark, barring a poor second-half performance.The interim profit for the six months to end-June, reported by the group on Thursday, equates to R4.3bn a month, dwarfing the annual profit reported by Absa and Nedbank in the 2025 financial year.The record performance saw the lender reward shareholders with R15bn in dividends as it reported its highest return on equity of 19.8% in the post-Basel III era.Tshabalala and CFO Arno Daehnke will retire and hand over the baton to the next generation of leaders.The group, valued at R540bn on the JSE, ended the period under review with R3.8tn in assets — nearly half the size of South Africa’s economy — cementing its place as Africa’s largest lender by assets.Tshabalala, who leads the giant with a presence in 21 African countries, said its interim results are testament to the clarity of the bank’s strategy and disciplined execution by the 50,000 people it employs.He also highlighted the resilience of the group’s Africa operations, which account for 40% of the earnings and are supported by the South African franchise.“We have on-the-ground businesses in all the major African economies, with 80% of Sub-Saharan Africa’s GDP generated in the countries where we operate. We remain consistently the largest and most capable financial services business in the region,” Tshabalala said.“We have 20-million active clients. And based on assets, we are the largest financial services group in Africa. We also have businesses in all the major global financial centres, linking Africa’s economies to the wider world.“For the first half, 51% of our headline earnings were generated in South Africa, 40% in the rest of Africa, and 9% in our offshore businesses as well as ICBCS,” Tshabalala said, referring to ICBC Standard Bank, a wholesale banking joint venture owned by the Industrial and Commercial Bank of China and Standard Bank Group.Angola, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Uganda and Zambia were the standout performers outside the South African business.The group’s Africa earnings have, on average, grown by 14% a year since 2015 — underscoring the portfolio’s resilience. Compared with the first half of 2021, Standard Bank’s earnings have surged by R14.5bn, led by the corporate and investment banking (CIB) franchise, which has leapt R7.5bn over the period.In the six months under review, CIB led the charge with earnings of R13.8bn, up 15% from the prior period. However, not every portfolio moved in the same direction, with personal and private banking reporting a 1% fall in profit to R4.6bn despite a strong performance in South Africa, where earnings grew 12%.Standard Bank’s local retail business holds a dominant position in the lucrative mortgage market, where it finances three out of every four home loans.Earnings of the business and commercial banking unit fell 2% to R4.4bn in the first six months of the year.Tshabalala acknowledged that the group’s retail business outside South Africa lacks scale but that the bank will not be reckless in chasing acquisitive growth for the sake of it. It is said to have been outbid by Nedbank in the race to buy Kenyan lender NCBA.Nedbank offered nearly R14bn to buy a majority stake in NCBA, which boasts more than 60-million customers spread across key regional markets, including Kenya, Tanzania, Uganda, Rwanda, South Sudan and Ghana.Tshabalala said the group does not have to make acquisitions to meet the 2028 targets it outlined at its capital markets day in March, which include growing earnings by 8%-12% a year and a return on equity target of 18%-22%.However, should the bank decide to pursue acquisitions, it is armed with a R21bn war chest, which it can deploy for investments in acquisitions and partnerships and into dividends.“We continue to see significant opportunities to expand and deepen our position across Africa and will selectively invest where we have clear competitive advantages and strong prospects for value creation,” Tshabalala said.“We invested $80m of additional capital in Tanzania in July 2026, and we remain on track to increase our shareholding in Angola [from 51% to 75%] during the second half of 2026, further strengthening the group’s presence in two of Africa’s most attractive growth markets.“We continue to increase our holdings in African regions whenever appropriate, and we remain on the lookout for attractive and well-priced opportunities … as the largest African financial services network, we can afford to be patient, careful and highly selective.”Business Day
