STANDARD Bank is working on growing headline earnings in its personal and business banking division in the rest of Africa to just more than a R1bn in the next three years — it expects to achieve this through organic growth.
This means over this period, Standard Bank’s personal banking division will turn profitable, although business banking is expected to be the biggest earnings contributor in the rest-of-Africa personal and business banking division.
Last year, Standard Bank’s personal and business banking division in the rest of Africa posted headline earnings of 8m USD, with Kenya, Mozambique and Zambia turning profitable for the first time. The previous year, the bank’s personal and business banking division recorded a loss of 30m USD.
The profit was largely driven by the performance of the business banking operation, with Standard Bank managing to cut the losses in the personal banking space, Zweli Manyathi, the CE of its personal and business banking in rest of Africa operations said on Friday.
“We expect to see headline earnings in excess of R1bn in three years’ time,” he said.
In terms of investing for growth, he said Standard Bank had sunk billions of rand into its rest-of-Africa personal and business banking operations.
“We are busy with our core banking (systems) replacement. We aim to complete all countries at the end of the first quarter or second quarter in 2017. Six countries are already on board. The total investment is just over R4bn across all countries for the core banking platform,” he said.
Mr Manyathi said Standard Bank was investing between R180m and R250m in advanced ATMs bulk-deposit takers and mobile banking applications to improve the quality of banking.
Standard Bank operates its personal and business banking division in 16 African countries. However, the entire Standard Bank Group has a presence in about 20 African countries, with corporate and business banking in the rest of Africa being the key earnings driver.
In the 2014 financial year, Standard Bank’s entire rest-of-Africa operation posted R4.9bn in headline earnings. The Standard Bank Group posted total headline earnings of R17.3bn.
Commenting on the personal and business banking approach in the rest of Africa, Mr Manyathi said: “Our strategy is to focus on what we call high-value segments, such as business banking, private banking and executive (middle income).”
“The biggest part will come from business banking.”
Interior of Standard Bank’s Rosebank offices at 30 Baker Street. Picture: STANDARD BANK