In an increasingly difficult economic environment in South Africa, Standard Bank has continued to perform solidly at home and expand its business overseas. The company delivered net profit growth of 22% in 2007, driven in large part by increased revenue growth overseas. The contribution to growth in headline earnings from South African operations slowed to 15% in 2007, but business in the rest of Africa grew its contribution by 58%, and business outside Africa grew its contribution to headline earnings by an impressive 98%.
Of all the banks in South Africa, Standard Bank has displayed itself as the most forward thinking. Its 2007 deal with Chinese banking giant ICBC to sell 20% of its equity for $5.24bn not only heralded the dawn of a new age in Chinese-African relations, but was also particularly prescient given the state of world banks’ balance sheets. As a result, the bank’s Tier 1 capital was considerably strengthened at a vital time in the economic cycle. On top of this, the bank grew its assets by 22%.
Aside from closing the ICBC deal in 2007, Standard Bank finalised acquisitions in Argentina, Turkey and Nigeria. Despite Standard Bank’s efforts abroad, Sim Tshabalala, the bank’s chief executive for retail banking, emphasises his commitment to the home market. “We remain focused on servicing the full value chain of local customers’ financial services needs and, where appropriate, refining our business models in the face of global market turmoil,” he says.
Standard Bank chief executive Jacko Maree applauds his staff’s commitment but is also keen the bank should keep up the good work. “Without our staff’s commitment and hard work, and our customers’ loyalty, our operations in Africa would not be the success they are. We should always remember, however, that these awards are a measure of our performance looking back, and we need to focus on being even better in the years to come,” he says.
