You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

‘Mortal Combat’ faces Standard Bank in pursuit of rich Africans

Africa’s biggest lender is targeting 25m customers over the next 4 years.
Image: Bloomberg

Standard Bank Group’s goal of adding at least 10 million customers ahead of a 2025 deadline has set the stage for a tug-of-war over Africa’s wealthiest clients.

The biggest lender in Africa, with a 160-year history on the continent and a presence in 20 countries, has the advantage of scale over its peers as it looks to grow its customer base to more than 25 million. But persuading the most affluent patrons to leave rival banks will be a hard-fought contest.

“At the apex of the pyramid, clearly you are going to be in mortal combat with your competitor,” chief executive officer Sim Tshabalala said in an interview. “As you go further down, it’s going to be about bringing many new entrants into the system.”

The competition among banks and multinational firms venturing into financial services in Africa is heating up. In a measure of the challenge facing Standard Bank, a report this year found that South Africans stick with their main bank for nearly three decades before switching, roughly double the time it takes Americans to move and 70% longer than UK citizens.

The Johannesburg-based firm is targeting more of the continent’s population of about 1.3 billion, which includes younger people that are growing wealthier and becoming more digitally active.

The number of internet users in Africa has shot up more than 260% since 2010 and total consumer spending is expected to exceed $5 trillion by 2030, according to research compiled by Standard Bank.

Away from home

To boost revenue by between 7% and 9% by 2025, Standard Bank has a few levers to pull.

Among the wealthy — in both its business and retail-banking offering — it will be gunning for the clients of its competitors. But the biggest gains will likely come from the mass market, where it plans to focus on previously underbanked individuals through a mobile-money offering.

“Previously they were not doing such a good job in the mass market but now they are gaining momentum,” Nolwandle Mthombeni, a banking analyst at research firm Intellidex, said by phone. “But the numbers are very ambitious and one good year doesn’t make a season. They still have to show momentum for a few more periods to reap revenue.”

Rates, fintechs

The lender is also anticipating an income boost from interest-rate hikes in South Africa, partnerships with fintech players and sales of non-bank products such as lotto tickets and airtime.

While operations on the continent have offered Standard Bank protection from low growth in South Africa, its footprint presents other challenges.

In Mozambique, the lender is fighting allegations of exchange-rate manipulation and part of its Angolan unit was seized by authorities after partner Carlos Sao Vicente was arrested amid fraud charges.

Its continental rivals are also growing — Nigeria’s biggest lender Access Bank has entered South Africa and is planning an offering targeting foreigners.

“It’s a good thing that they enter the South African market,” Tshabalala said. “Frankly, why should South African-headquartered institutions be able to enter other jurisdictions and not vice versa?”

© 2021 Bloomberg

COMMENTS   3

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

The world of ‘Governance’ will be interesting, as we know there is nothing from Nigeria (or any other part of Africa) that would come close to fitting Governance standards, and yet Standard Bank and its very chief executive officer, Sim Tshabalala, have been involved in some really dodgy governance matters involving the state capturers and that small issue of related entities, like SAP, who have admitted to being complicit in aiding and abetting state capture through their dealings with state capture entities and yet SAP is Standard Bank’s big Accounting ‘package’!

Let’s hope the real winner is some other entity that can be more nimble than these monopoly orientated banks.

With their current customer service?

Yes. current customers are not a priority. new ones are.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:
Click a Company: