Standard Bank’s finance chief on Monday sought to strip away the drama from his bank’s embrace of China’s payment clearing system, saying the move was a commercial response to client needs.
Standard Bank became the first African bank last month authorised to offer transactions through China’s cross-border interbank payment system (CIPS), an inauguration that sits against the broader push to internationalise the renminbi and expand alternative payment rails beyond Swift and dollar corridors.
Observers see the developments as both a way to speed renminbi settlement and a potential geopolitical signal in an environment where payment systems are becoming as much a neutral financial infrastructure as they are a global policy instrument.
“We wouldn’t be weighed by geopolitics for signing up to CIPS. We have important clients in China, and we bring important clients to other markets across Europe and the Middle East,” Arno Daehnke, chief finance and value management officer at Standard Bank Group, told an investor conference call on Monday.
“This shift to renminbi settlements is a gradual, long, long-term shift, and I wouldn’t expect that to be rapid in the near term. We have obviously worked with the ICBC [Industrial and Commercial Bank of China] and various other Chinese clients, but it’s not a material part of our business. We all know that the dollar is 89% of forex trade on one side or the other side, and that’s probably going to be retained in the medium term.”
Heightened scrutiny
His comments come amid heightened scrutiny of alternative payment systems as governments, especially Brics members, and banks weigh the geopolitical implications of payment autonomy and de-dollarisation.
China and sanction-hit Russia have been the most vocal proponents, arguing that alternative infrastructure systems would protect members from unilateral actions and give the bloc greater financial sovereignty.
The most concrete proposal is the Brics cross-border payment initiatives, which aim to knit together national systems into an interoperable tool to enable inter-Brics transactions.
For Standard Bank, a rational commercial entity that counts China’s ICBC as its top shareholder, the commercial logic is clear. According to the Standard Bank’s trade barometer, more than one-third of surveyed businesses source imports from China, up from 23% in 2023.
Daehnke was speaking hours after the lender issued a trading statement in which it kept its full-year guidance unchanged amid growth in banking revenue and net interest income, supported by strong origination in its investment banking division.
The group said its performance trends in the 10 months to the end of October were broadly in line with those of the first half of the year.
It said banking revenue grew by mid-to-high single digits in the 10-month period, while net interest income growth was driven by book growth, supported by continued strong origination in investment banking.
This was partly offset by the negative endowment impact from lower average interest rates. Non-interest revenue growth remained robust.
“A larger and more engaged client base, combined with increased client activity, led to strong net fee and commission revenue growth. Continued uncertainty and market volatility supported strong trading revenue momentum,” it said.
Despite an increase in activity-related costs, cost growth remained well contained. Banking revenue growth was slightly ahead of cost growth.
The credit loss ratio was around the middle of the group’s through-the-cycle range of 70-100 basis points.
It said the insurance and asset management franchise continued to deliver robust performance.
It added that while macroeconomic reforms and stabilisation efforts have brought relative stability, particularly in Nigeria, Angola and Ghana, sovereign stress has remained elevated in Malawi and increased in Mozambique. In South Africa, while inflation and interest rates have declined, real GDP growth has been subdued. However, it noted that confidence appears to be improving.
For the year to end-December, the group expects to report banking revenue growth of mid-to-high single digits. Banking revenue growth is expected to be at or above operating expenses growth, resulting in a flat to lower cost-to-income ratio year on year.
Group return on equity (ROE) is expected to be well anchored in the group’s target range of 17%-20%.
The group will provide guidance for the 2026 financial year when it reports its full-year financial results on March 12.
It also plans a capital markets day on March 26, when it will discuss the drivers that underpin the group’s 2028 targets, including HEPS growth of 8%-12% and ROE of 18%-22%.
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