Sim Tshabalala, Standard Bank Group CEO. The banking group aims to facilitate a great deal more sustainable finance and infrastructure transactions on the African continent.
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Standard Bank Group wants to lead energy and infrastructure development in Africa by helping mobilise for clients some of the estimated R3.4 trillion that will be required to be spent on roads, bridges, energy and other projects across the continent over the next two decades, CEO Sim Tshabalala said.
Tshabalala, interviewed at the release of financial results for the year to December 31, said the group had facilitated R74 billion in sustainable finance transactions on the continent and in South Africa in 2024, and R177bn cumulatively since 2022.
Africa's largest bank by assets operates in 20 African countries with plans to open an office in Egypt and expand in East and West Africa.
Tshabalala said Africa has 600 million people without access to an electricity grid, which needs to be overcome.
“We need more generation, we need more transmission, we need more and better distribution.” Additionally, he said that more cement, roads, ports, and other infrastructure will be required for Africa to play its role also, in the global energy transition,” he said
Tshabalala said African funders would probably need to fund about of the R3.4trln, but there were other global funding sources that could assist in financing these projects, such as private equity and private capital sources, through multi-lateral agencies, and philanthropic funds. He also said that Africa’s pension funds, amounting to $2.5 trillion, could be leveraged.
He emphasised that work was required on the policy front to make it rational and attractive for financiers to fund these projects, by addressing factors such as increased transparency, reduced red tape, and better terms on the cost of capital.
Standard Bank’s share price surged 5.21% Thursday afternoon after the release of results that showed a 4% increase in headline earnings per share (HEPS) for the year, and a 14% increase in HEPS if the effect of currency devaluations in other African countries was excluded from the rand denominated results.
Tshabalala stated that the 14% figure illustrated the health of their underlying businesses, and he did not expect the currency devaluation effects to be repeated in the new financial year. The share price was trading at R231.59 Thursday afternoon, some 24% higher than the price a year ago.
The earnings growth was driven by balance sheet growth, lower credit impairment charges, flat costs in the banking franchise, and a strong performance in Insurance & Asset Management.
“We saw double-digit earnings growth in South Africa, good contributions from our insurance and asset management business, and a strong operational performance from Africa Regions,” he said.
Africa Regions contributed 41% to group earnings, but the impact of currency devaluations against the rand accounted for 9% of HEPS. Active client numbers increased by 4% to 20 million.
Customer digitisation continued, with investments in digital platforms, especially mobile and online banking, streamlining services and improving accessibility. Sixty-four percent of transactional clients in personal and private banking in South Africa were digitally active, and in the business segment in South Africa, 84% of clients are digitally enabled.
Key contributors were from the Africa Regions include Angola, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Uganda, and Zambia.
East Africa benefitted from macroeconomic tailwinds such as lower inflation and strong foreign exchange inflows. In West Africa, there was high inflation, elevated interest rates, and weakening local currencies, but the region saw strong growth in corporate and sovereign lending.
In the South and Central Region, shifts in commodity prices and climate-induced energy crises, particularly in Malawi and Zambia, negatively impacted the region. Foreign exchange shortages and post-election protests affected Mozambique. Despite these headwinds, the group’s South and Central Region performed well.
Inflation, interest rates, and growth awere expected to be mixed in 2025, with improvements in Botswana, Malawi, and Zambia, but a deterioration in Mozambique.
The South African franchise delivered double-digit earnings growth in 2024, supported by increased client activity and improving credit trends. The Insurance and Asset Management business recorded a strong performance, with headline earnings growing by 17% to R3.3bn.
Assets under administration and management in the South African asset management business increased by 13% to R1.1trln, driven by positive net external third-party customer inflows and favourable investment market movements.
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