Standard Bank's financial results for its 2025 financial year has met or exceeded all the targets the group's management had set out for its shareholders in 2021.
Image: Henk Kruger / Independent Newspapers
Standard Bank Group believes that the higher oil prices emerging from the latest crisis in the Middle East have already impacted the outlook for the South African economy and for other countries on the continent.
CEO of the biggest bank in Africa by assets, Sim Tshabalala, said on Thursday in an interview at the release of their financial results for the 12 months to December 31 that before the crisis, the bank was forecasting at least three interest rate cuts this year in South Africa, of 25 basis points each. However, since then, the bank has revised its forecast to only two interest rate cuts this year, in May and September, with a third to only follow next year.
He said that they believed there to be two likely scenarios. A benign outcome might be for oil flows of some 1,5 million barrels per day to be disrupted by the war in Iran, which would translate into an average of $80 per barrel, resulting in a 0,2% reduction in global GDP growth.
In a second scenario, where some 3,5 million barrels of oil are disrupted, the oil price could trade around $100 a barrel for longer, causing a more severe 0,6% reduction in global GDP growth.
The outcome of these scenarios would be mixed for different African countries. For instance, an oil-producing country like Angola’s GDP is likely to benefit economically from the higher oil prices, while a country such as Kenya, which has to import oil, may see higher inflation as a result of the increased fuel prices, said Tshabalala.
The Brent crude oil price was trading at $98,35 per barrel on Thursday afternoon, having risen sharply from an average of $64,61 per barrel in January, prior to the onset of the US attack on Iran. As of January, the IMF had forecasted global real GDP growth of 3,3% in 2026 and 3,2% in 2027.
Tshabalala said across the group’s portfolio of countries in sub-Saharan Africa, inflation eased in most markets, allowing central banks to pause or cut interest rates. In contrast, inflation remained elevated, and average interest rates increased year on year in Angola, Nigeria, Malawi, and Zambia. Kenya, Botswana, and Mozambique faced foreign exchange (FX) constraints, while Malawi continued to experience fiscal constraints.
In South Africa, average inflation decreased to 3.2% in 2025 from 4.4% in 2024, marking the lowest level in 21 years. This also provided room for the South African Reserve Bank to lower interest rates by 100 basis points to 6.75%.
Tshabalala said their financial results for 2025 had met or exceeded all the targets the group had set out for its shareholders in 2021. Their new targets by the end of three years are for headline earnings growth of between 8% and 12%, and a return on equity of between 18% and 22%.
In 2025, the return on equity was 19,3%, at the top end of their 2025 guided range of 17% to 20%, while headline earnings of R49,2 billion were up 11,2%. Of the headline earnings, 40% came from African regions, a figure unchanged from the previous year. A final dividend of 878 cents per share brought the full-year dividend 12% higher to 1,695 cents per share.
The banking businesses delivered a strong performance driven by solid balance sheet growth and robust growth in fees and trading revenues. Credit impairment charges were lower year on year, supported by an improving macroeconomic environment, and costs were managed tightly. Insurance and asset management delivered strong earnings growth.
Standard Bank South Africa increased its headline earnings contribution by 7%; the Africa Regions’ franchise contributed R19,7bn; the Offshore businesses contributed R3,1bn; and the contribution from the 40% stake in London-based ICBC Standard Bank Plc (ICBCS), which is majority owned by the Industrial and Commercial Bank of China (ICBC), was R1.5bn.
The key contributors to Africa Regions’ headline earnings were Angola, Ghana, Kenya, Mauritius, Nigeria, Tanzania, Uganda, and Zambia.
The group mobilised R100bn in sustainable finance for projects and investments in 2025, bringing the cumulative total to R277bn since 2022.
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