Standard Bank to cut space by as much a quarter, targets 15m SA clients

Already saving R400m per year from branch and head office space reductions.
Standard Bank's head office in the Johannesburg CBD. Image: Moneyweb

In a virtual strategic update event on Friday, Standard Bank Group revealed that it plans to cut head office and branch space by as much as a quarter by 2025.

Chief finance and value management officer Arno Daehnke says head office and branch square meterage will reduce by 20% to 25% as one of the critical levers to maintain cost growth lower than inflation.

This will see the banking group’s cost-to-income ratio “approaching 50%” from the 58.2% last year (and 58.3% in the first half of this year).

In 2019, the bank shut around 100 branches across the country. While that was the main driver in cutting its branch floor space from around 360 000m2 to 294 000m2 by end-June 2021, it has continued to reduce space since those closures.


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These efforts at reshaping its estate “in line with client and employee behaviours” have already resulted in savings of R400 million per year.

It hasn’t just been about cutting space, however.

The bank speaks about a “distribution reset” where 80% of transactions in branch have been digitised, allowing it to shift the focus of staff from service to sales.

It has lowered distribution costs by over R1 billion.

In her presentation, chief executive officer for consumer and high net worth clients, Funeka Montjane reiterated that the bank would “continue to optimise distribution in South Africa”.

Branch experiance remains ‘key’

Compared to the first half of last year, South Africa branch volumes have declined 39% in line with the group’s “strategy to drive our clients to our digital channels and de-cash our branches, where possible”.

It admitted in Thursday’s financial results that its “branch experience is lagging and remains a key area of focus”.


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It will leverage retail distribution partnerships, like the just-announced deal to open mini branches in select Pick n Pay stores, which bring lower set-up and running costs and will give it access to a new client base.

The banking group also uses Pep and Spar for its Instant Money cash-send product.

Standard Bank has also boldly stated it aims to grow its client base from 15 million to over 25 million by 2025.

It has 9.7 million active clients in South Africa and 5.26 million retail clients in its African Regions businesses.

It sees the South African number increasing by 1.6 times, in other words to 15.5 million. It does not see growth coming from the affluent or high-net-worth segments – it will defend its share in this space. Rather, the growth will all come from so-called “main market” clients.

Read: Seismic shift as Nedbank moves to hybrid work-from-home model

Key to this ambitious target of adding more than five million customers will be its low-cost MyMo digital bank account as well as its Instant Money remittance product. It currently has 2.1 million unique Instant Money senders and in excess of one million MyMo account clients.

Clients in its African regions will grow by 1.9 times, or to 10 million.

Daehnke says this will translate to a compound annual growth rate (CAGR) of 6% to 8% in non-interest revenue for the banking business over the five years to 2025.

Its insurance and investments businesses will have CAGR of 8% to 11% over the same period and it sees between R3 billion and R4 billion in non-interest revenue from initiatives labelled “beyond financial services”.

This represents CAGR of between 48% and 58% over the period, admittedly off a low base. It sees new revenues from strategic distribution partnerships of between R5.5 billion and R6.5 billion.

It is this push, towards becoming a platform, that the bank says will ensure it doesn’t become “disintermediated from clients and become a utility”, resulting in a deterioration in efficiency and decline in returns.

Listen to Fifi Peters’s SAfm Market Update with Moneyweb interview with Standard Bank Group CEO Sim Tshabalala: 


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Are they going to stop being an expensive, incompetent bank? Otherwise I don’t see that happening.

Forgive my ignorance, but who is Standard Bank?

Is it a bank or furniture store?

Good luck with that. Standard Bank still operates as though it were 1980.

Its because they still run ancient Legacy Computer systems. I’m sure, like other older banks, its too expensive to replace such systems, so all they do is improve front-end interfaces to these monolith systems!??

Monolith? Not everything has to be a microservices you know.

Standard Bank have issues beyond tech. Outside business customers they don’t have anything to pull a customer into their ecosystem.

Lots of woffling but nothing about lower fees ?

Clearly Standard haven’t got a handle on this downsizing – many banks take 5 year leases with an option for a further 5 years – to get out of these leases costs a fortune, then there’s the question of what to do with the spare furniture and fittings, the retrenchment of staff and their packages on exit. My experience is that it takes 3 years before real savings are achieved

Customers who have connections inside are served on the more complicated
banking challenges of live…
I am moving on…

The only bank that charges customers monthly fee to sign up for their loyalty rewards.

Good luck getting that 10 million extra customers.

Hi Henry.

Some other banks also charge for their rewards. i.e Nedbank R24 for greenbacks.

Also, if you consider Discovery Bank with Vitality then there is another example.


Thanks! I didn’t know that. I see that ABSA also charges R23 p.m. for “rewards”

Really uncompetitive when comparing to Capitec-Shell fuel cash back program.

Why must they charge for a rewards/loyalty program ??? my kop is te plat om dit te verstaan!

15 Million Customers??? Unless we talking all the illegals in this country…. then maybe…

Reality is the space is becoming crowded. Bankzero, etc.

Bankzero will capture Business Banking Market. Makes sense if costs are low.

With so many front line staff ” working ” from home the service has evaporated. Try and get the title deeds back from Standard Bank where the seller of the property has a home loan or had a home loan with bank. You pushed from pillar to post with no one inclined to take responsibility. You can’t find the title deeds while you are sitting at home!

The easiest way to push a chunk of overheads onto employees without commensurate increases

Standard Bank is just a slug

They should cut 50% of the staff, incompetent… that will turn the dial

Worst client service in almost every division I have ever come across – I have had the misfortune of dealing with their homeloans, short-term risk and investment and trust divisions – my word…

And now they have bought a useless life company as well…

I hope they disappear one day. I think SA has one of the highest bank charges in the world for practically no service.

All so called tier 1 banks are a joke but creates so much opportunity in so many ways so exploit that(Even in the lending field in anything other than corporate level ) Their business banking coverage will effectively be outsourced to disintermediates and the banks will just be a source of cheap funding to intermediaries. DISRUPTION in progress !

End of comments.



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