Banking major Standard Bank has received regulatory approval to open a representative office in Egypt, taking its presence in Africa to 21 countries, as it pursues money flows from Gulf States into the fast growing East Africa.
“The bank already has clients that are based in Egypt. We already do business with a number of clients, some of which are banks, including the Egyptian central bank. Egypt forms an important part of the nexus between the Gulf Cooperation States and East Africa,” group CEO Sim Tshabalala told Business Day.
“Much of the excess capacity for example in construction that is in Egypt gets redeployed into East Africa. The Gulf Cooperation States are becoming an increasingly important part of the economic infrastructure of Africa,” Tshabalala said.
“There are companies that are involved in the construction industry that are working on the ports for example who are our clients and they operate out of the Gulf Cooperation States. There are also Egyptian companies that are operating in East Africa. It then makes sense for us to have a bigger presence in Egypt to service those clients.”
The Gulf Cooperation Council is a political and economic alliance of six oil-rich Middle Eastern countries — Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman, established in Riyadh 44 years ago.
The Middle East countries have also been aggressive in pursuing critical minerals in Africa. Standard Bank Africa Regions, which with the inclusion of Egypt takes the portfolio to 20 countries, outside its main market of SA, has become important to the group’s earnings, contributing 41% to earnings in the six months to end-June.
Africa regions book growth outpaced the SA book growth in the period.
The group’s interim results showed that South & Central Africa’s headline earnings came in at R3.95bn, with a return on equity of 24.4%, supported by improved agricultural output and stabilising food prices moderated inflation across Zambia, Malawi and Mozambique.
The group’s West Africa region, which houses the likes of Nigeria and Ghana, reported a 49% surge in headline earnings to R3.5bn, with a return on equity of 39.1%.
East Africa displayed economic resilience in the first half of the year, underpinned by stable monetary policy, infrastructure investment and robust export activity.
Inflation remained contained in the region, supported by strong agricultural output and low energy costs.
“Kenya and Uganda reduced monetary policy rates while Tanzania held rates steady,” Standard Bank said.
“Africa Regions is well positioned to deliver continued business growth supported by ongoing investment in client journeys and digital capabilities. Countries are on track to deliver committed franchise growth and financial outcomes to assist the group in achieving its 2025 commitments and medium-term targets.”
The group has not closed the door in pursuing acquisitive growth to bolster its Africa Regions portfolio.
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