Standard Chartered eyes SA’s fintech boom to deepen continental and global investment links

Tawanda Karombo

Standard Chartered is seeking to pivot on South Africa’s booming fintech sector to connect and bridge the country and the continent with international investors seeking exposure to the region.

Bill Winters, Standard Chartered’s group CEO visited South Africa earlier this month as the bank views the country as a vital link to the rest of the continent.

Standard Chartered recently told Business Report that there is renewed investor interest in South Africa’s renewable energy, IT, mining as well as finance. This was helping to shore up SA’s robust merger and acquisition activity amid rising regulatory scrutiny guided by public interest concerns.

The country’s advanced financial sector and stability in the regulatory sector was also helping restore some certainty to investors seeking mergers and acquisitions (M&A) deals in the country.

Chris Egberink, the bank’s CEO and head of coverage in SA has now said that Standard Chartered is aiming to “be the bridge for South African corporates expanding across Africa and internationally, and for international clients and investors seeking opportunities in South Africa” and the rest of the continent.

“Our leading debt and capital markets offering, together with our innovative solutions in trade, digital finance, and sustainable investments position us to support our clients’ ambitions across the continent," said Egberink.

The British finance institution is looking to capitalise on South Africa's fintech sector, which is projected to reach $14.86 billion by 2033. Standard Chartered believes this presents significant growth opportunities, with a projected growth rate of 7.7%.

Added Egberink: “Standard Chartered is leveraging this expansion through its digital and innovation platforms, including the Straight2Bank platform, which streamlines digital banking for clients by simplifying transactions, account access, payment authorisation, and term loan management.”

Meanwhile, during his visit Winters met South Africa Reserve Bank (Sarb) Governor, Lesetja Kganyago, and other stakeholders such as CEOs of South African firms and some clients, asserting the importance of investment in strategic partnerships and digital technology to adapt to globalisation.

“Africa continues to be a key part of our DNA and we’re committed to delivering financial solutions that support economic growth through tangible investment and partnerships,” said Winters.

Standard Chartered notes that South Africa is a front-runner in intra-African trade, with about 29% of its exports shipping to the rest of the continent. The Sarb is seen as supportive of “policy changes to improve business conditions, lower market entry barriers, and enhance regulation” transparency.

All of this was beneficial in further attracting M&A activity, with the country’s foreign direct investment reaching $9.1bn in 2022.

Although SA is seen as fertile for M&A compared to most of its peers on the continent, economic productivity and investor sentiment is still being impacted by infrastructure and utility supply challenges.

Moody’s noted this month that without improvements, South Africa risks continuing a negative spiral, where high interest rates aimed at attracting inflows amid subdued growth limit domestic investment and further hinder economic prospects. 

Nonetheless, investor sentiment on SA “remains cautious due to slow reforms and current US-SA” tensions. Moreover, the possible revocation of Agoa or the emergence of US sanctions on SA could have serious economic consequences, with markets keenly watching “policy actions and geopolitical” developments.

BUSINESS REPORT