Standard Bank has grown its assets by an average R200bn a year over the last three years, cementing its place as Africa’s largest lender by assets and closing in on FirstRand as the most valuable bank on the continent.
The Sim Tshabalala led bank reported assets of R3.3-trillion at the end of December, up R600bn from R2.7-trillion in 2021.
FirstRand, Absa, Nedbank, Attijariwafa Bank and Groupe Banques Populaire make up the rest of the top six largest banks on the continent in assets.
Despite its dominant position in corporate and investment banking on the continent, Standard Bank has a fast growing profitable retail franchise with large market shares in Uganda, Botswana, Eswatini, Lesotho, Namibia and Zimbabwe. The lender has identified opportunities to build scale in high-growth markets where it is currently subscale, including Nigeria, Kenya, Angola and Ghana.
The surge in assets has seen the group’s profit has followed suit, up R20.5bn in the three years under review. The company’s return on equity is up 5% in the period.
Standard Bank’s clientele stretches across 20 countries in Africa, including its home market of SA — with more than 40% of its earning coming from its rest of Africa portfolio.
The group, which has long played second fiddle to FirstRand in being the most valuable bank on the continent, is also making inroads in that regard, with its stock up 30% over the past year.
FirstRand stock is up 18.19% in the same period with the market capitalisation difference between the two banking giants now down to just R9bn from more than R70bn a year ago.
Standard Bank is now valued at R400bn on the JSE, nearly double the R202bn it was valued at the end of the 2020 financial year.
FirstRand, whose portfolio of businesses comprises RMB, FNB, WesBank, Aldermore Bank and Ashburton Investments is worth R409bn on the local bourse.
Standard Bank, in its annual report published on Friday ahead of its AGM in June, said that it had maintained its market leading position in SA’s hotly contested home loans market, with 33.4% market share.
“We continue to maintain a leading position in home loans by size and profitability, financing one in three home loans across the country. We have the second-largest deposit base for current and savings accounts, and top three in card and personal loans,” Funeka Montjane, CEO of personal and private banking said in the report.
“We are in the top three for funeral policies, with the highest persistency among peer banks, protecting 4.5-million lives. Vehicle and asset finance remains subscale and we have repositioned it to prioritise existing clients and improve sustainable profitability.”
The country’s home-loan market is said to be worth R1.3-trillion and is dominated by the traditional banks: Standard, Absa, FNB and Nedbank.
However, this has not dissuaded other players from entering the market, including Discovery Bank, which launched its home loan proposition last year.
At the time, Discovery Bank said its current clients had nearly R300bn in home loan balances with other banks, providing it with a sizeable base to get clients to switch their loans.
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