Standard Bank’s global markets unit reported a record profit of R5.4bn in the six months ended June, a surge of 64% from the previous period, cementing its place as a key cog in the group’s corporate and investment banking (CIB) division.
The “Big Blue” as Standard Bank is referred to in high finance circles due to the sheer size of its balance sheet, said the scale of the global markets business provided a differentiated ability to access liquidity and aggregate risk across the diverse product set and operating markets.
It credited the performance of the business experienced to on-the-ground teams with deep local and international market knowledge, saying this allows the business to successfully navigate uncertain market conditions.
“In certain and uncertain markets alike, global markets can provide solutions across the client franchise, providing risk management solutions and enabling market making opportunities,” group CEO Sim Tshabalala said.
“Global markets services a diverse client franchise, from the retail and personal sector to large local and international corporates, and to sovereigns,” he said.
“The foreign exchange business is ranked first in more than half of the markets it operates in and provides a reliable base of capital light client revenue. The business is able to provide structured hedging and financing solutions to corporate and sovereign clients with risk aggregation and distribution capabilities that enable offering these solutions to clients,” he said.
The group’s interim results showed that the global markets SA franchise benefited from revenue growth of 28% with strong performances across equities, credit and structured products.
The bank’s Africa Regions saw revenue growth of 32%, benefiting from a robust performance from West Africa due to improved foreign exchange flows on the back of policy shifts.
“The business enjoys unprecedented scale across Africa, with a market-leading ability to provide risk management and structured funding solutions to its large and diverse client base. The long-term strategy of building sustainable client revenues combined with local and international market expertise supports its ability to navigate uncertain and volatile market conditions,” Standard Bank said.
The group’s CIB business reported headline earnings of R12bn in the six months under review, constituting about half of the group’s earnings of R23.8bn reported in the period.
Standard Bank said the CIB business would defend its market-leading competitive position and optimise resources through a culture of cost discipline that promotes investment in client experience and modernises the business
“CIB remains on track to assist the group in achieving its 2025 commitments and medium-term targets,” it said.
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