End of an era coming for Standard Bank

Standard Bank is set to enter a new era in 2026 when it transitions towards its SBG 2028 strategy and targets, the end of which aligns with the retirement of CEO Sim Tshabalala and CFO Arno Daehnke. 

These targets include headline earnings per share growth of 8% to 12% and an average return on equity (ROE) between 18% and 22%. 

When the bank reports its full-year results for the 2025 financial year around 12 March 2026, it will mark the end of its SBG 2025 set of targets and strategy. 

During a pre-close call with investors and analysts detailing the performance of Standard Bank during the first ten months of the 2025 financial year, Daehnke unpacked the transition to the new set of targets. 

The SBG 2025 targets were laid out in August 2021 and aimed to significantly enhance the efficiency of Standard Bank’s operations. 

It set out to achieve revenue growth of 7% to 9% throughout the period, with its cost-to-income ratio improving towards 50%. This was coupled with an improved ROE of 17% to 20% and a dividend payout ratio of 45% to 60%. 

The bank is tracking ahead of plan regarding these targets, on track to exceed those set out in 2021. 

“We look forward to closing the chapter on our SBG 2025 strategy and related targets when we report our financial results on 12 March 2025,” Daehnke said. 

“We remain confident that we will deliver against the SBG 2025 targets that were laid out in August 2021.” 

These targets were considered ambitious at the time and aimed at reviving a business that some argued was stagnating and too big to manoeuvre effectively. 

When they were set, the bank’s revenue growth was relatively flat, its cost-to-income ratio was at 59.1%, and its ROE was a mere 8.9%. 

During its latest full-year results presentation, the bank revealed that it has made strong progress in achieving these targets, with substantial revenue growth and enhanced efficiency. 

The bank managed to grow its revenue from R101.4 billion in 2020 to R158.7 billion at the end of 2024 at a compound annual growth rate of 12% – well above its 7% to 9% target range. 

Its cost-to-income ratio improved dramatically from 59.1% in 2020 to 50.5%, approaching its 50% target for the end of 2025. 

As a result, its ROE has skyrocketed from 8.9% in 2020 to 18.5% in 2024, within its target range of 17% to 20%.

New era for Africa’s biggest bank

The end of the current financial year will mark the beginning of a new era for Standard Bank as it adopts the SBG 2028 targets and strategy. 

Tshabalala is very confident that it can deliver on these targets, saying it is the best-placed financial institution to benefit from Africa’s economic growth in the coming years. 

These targets include headline earnings per share growth of 8% to 12% and a ROE target range of 18% to 22%. 

Daehnke told analysts that the bank will host a capital markets day in March 2026 to unpack the strategic and financial drivers that underpin these targets in more detail. 

“We will defend and grow our core businesses and pursue growth opportunities. We will focus on opportunities with a clear competitive advantage and that provide accretive risk-adjusted returns,” the bank said regarding the new targets. 

Tshabalala and Daehnke have also been clear that their retirements at the end of 2027 will not affect their commitment to achieving these targets. 

“Firstly, I am very focused, as is my partner, Arno Daehnke, on delivering headline earnings per share growth of between 8% and 12% for our medium-term targets,” Tshabalala told Daily Investor in August 2025. 

“We are absolutely determined to do that as a team, and the same for the return on equity within the higher range of 18% to 22%. I am looking forward to the privilege of continuing to do that until December 2027.”

Tshabalala also dismissed any uncertainty regarding his successor as CEO by pointing to Standard Bank’s renowned succession planning. 

“I must mention this. Standard Bank is a great institution. We keep telling people to go and read the statement issued by our chair. It makes clear reference to our deep bench strength,” Tshabalala said. 

“We grow our own timber at Standard Bank. It goes to the very DNA of the bank to look at things over the long term, including leadership succession.” 

The bank is very likely to appoint an internal candidate to replace Tshabalala as CEO, with its history pointing to the current crop of business unit heads. 

“In the history of the bank, there has only been one chief executive, only one who has come from the outside, and it was the first one, Robert Stewart,” Tshabalala said.

Standard Bank has hinted at what underpins its SBG 2028 strategy, with Tshabalala and the bank’s management team outlining three key focus areas for the bank. 

The first is Africa’s energy and infrastructure development, which presents substantial lending opportunities for the bank. 

Its corporate and investment banking division has plans to mobilise over R450 billion in sustainable financing by 2028, with this expected to flow over to the bank’s other operating units. 

The second focus area for the bank is building the number one private banking business in South Africa and Sub-Saharan Africa. 

Standard Bank has admitted this would require the transformation of the business and client experience currently offered. 

This includes upskilling private bankers to offer improved service, increasing the personalisation of offerings, and cross-selling insurance and investment products. 

Standard Bank’s African business is the third pillar of this strategy. It is looking to capitalise on the significant investment in building out its operations on the continent. 

The Africa Regions business has grown strongly from almost a negligible operation to making up 41% of the bank’s earnings. 

Crucially, these economies are growing faster than South Africa and, thus, offer greater opportunities for growth at the moment.