With family-owned businesses already a significant contributor to Standard Bank’s business and commercial banking (BCB) unit, the group believes it can still grow this segment — not just in SA but across the several African jurisdictions where it is present.
BCB earlier this year extended its Mauritius offshore offering to family-owned businesses, which are increasingly seeking banking solutions that offer wealth preservation, currency risk management and access to global markets.
Bill Blackie, CEO of BCB, said the business was not resting on its laurels as competition heats up in business banking in SA.
“Family-owned businesses are important to the economy. They tend to be the biggest employer in the economy and are significant innovators.
“If you look in Europe, the US and even China, these businesses provide a very stable bedrock for the economy,” he said, speaking on the sidelines of BCB’s Africa Unlocked conference on Thursday.
“As we move across Africa that is what we want to stimulate. SA itself is actually endowed with very strong family owned businesses with history and culture. As we build capital on the continent, we want to make sure we stimulate family businesses as well.”
An analysis by consulting major McKinsey showed SA family-owned businesses outperform non-family-owned businesses across key metrics, including total shareholder returns and the return on invested capital, and economic profit spread.
The BCB business is a significant contributor to Standard Bank’s earnings, having chipped in R9.3bn in headline earnings in the 2024 financial year, and a return on equity of 38%.
Small and medium enterprise (SME) banking has emerged as the next battleground for SA lenders, driven by enhanced digital capabilities at incumbent banks and the entry of non-traditional competition.
Business banking generally refers to the services used by small companies, while commercial or corporate banking refers to the services used by large enterprises with a high turnover.
Nedbank has raised its hand to compete aggressively for market share in this segment.
To this end, Nedbank in March announced a shake-up of its retail and business banking divisions. The reorganisation will see the creation of business and commercial banking, a juristic-focused cluster that will cover SMEs and commercial clients.
The segment will also target mid-corporate banking aimed at clients with a revenue turnover level per annum of R1bn and above.
Investec plans to create a single platform for mid-sized SA corporates to holistically manage their banking requirements and to accelerate transactional banking client acquisition to about three times the base of 2,700, translating to a market share of about 8% by full-year 2030.
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