Sim Tshabalala’s last test as Standard Bank CEO

Standard Bank will unveil its strategy for the next three years at its Capital Markets Day, with the bank exceeding the targets it set for the 2025 financial year. 

The bank’s new strategy will build on the significant transformation it has experienced over the past five years as part of its SBG 2025 set of targets, with it restructuring its operations and reintegrating Liberty into its business. 

CEO Sim Tshabalala has emphasised Standard Bank’s ability to keep its promises and execute on its planned strategy with discipline. 

Speaking to Daily Investor, Tshabalala explained that this emphasis is important to maintain the credibility of the bank’s management team and influence how investors view the company from the outside. 

This is particularly crucial for Tshabalala and the bank during a period of transition, with Standard Bank moving to its new medium-term strategy and set to get a new CEO and CFO when Tshabalala and Arno Daehnke retire by the end of 2027.

“It is simply that management credibility is so important. It makes a difference to how shareholders and investors view the company,” Tshabalala said. 

“It is all about consistent delivery against promises made in terms of the target set, and this is fundamental. It adds, in my view, to shareholder value to have this credibility.” 

In some ways, this is also about Tshabalala telling shareholders that the bank will meet its stated targets, even if he is not in the CEO’s chair, which he has occupied as sole chief executive since 2017. 

The only hint that Tshabalala has given regarding the bank’s next CEO is that it will be an internal appointment, with Standard Bank continuing its history of promoting from within. 

Tshabalala is quick to remind journalists and investors that the only external CEO the bank has appointed was its first, Robert Stewart, 163 years ago. 

Whoever ascends to the top job at Africa’s largest lender by assets, with over R3.6 trillion on its books, will have big shoes to fill. 

Tshabalala has successfully revived the bank’s fortunes after its relative stagnation prior to 2020, when revenue growth flatlined and return on equity deteriorated.

To get the continent’s largest financial institution humming along, Tshabalala and his team fundamentally restructured the business as part of its SBG 2025 strategy. 

Tshabalala explained that the bank recognised it was not serving its clients as well as it could and split its business banking and personal and private banking units. 

This was coupled with the reintegration of Liberty, creating significant efficiencies within the insurance and asset management business. 

“I mean, there are a number of other things we’ve done, but as you know, those two are tangible. We did them. They were difficult, and they’re paying off,” Tshabalala said.

They are indeed paying off handsomely, with the bank exceeding its 2025 targets and posting record headline earnings of R49.2 billion with a return on equity of 19.3%.

To 2028 and beyond

Now, the bank is embarking on its next three-year strategy for 2026 through the end of the 2028 financial year, with a new set of targets for its management team. 

In the medium term, the bank has forecast headline earnings per share growth of 8% to 12% per annum, with a return on equity of 18% to 22%. 

These are the bank’s main targets and are supplemented by its aims to grow banking revenue by 7% to 10% per year, have a cost-to-income ratio below 50%, and maintain its capital buffers, credit-loss ratio, and dividend policy. 

While these targets do not appear flashy, they are significant considering the base on which Standard Bank is growing, with headline earnings of R49.2 billion. 

Tshabalala has been clear that the new strategy will not see an overhaul of how Standard Bank does business, but will rather be a continuation of its strong momentum. 

“I will say to you with all humility that the current management team stands on the shoulders of great executives who have gone before us,” Tshabalala said. 

“I wish we could claim to be geniuses. But, all we are doing is executing an old strategy that was well thought through.”

Tshabalala explained that the bank’s current presence in 21 African markets stems from a decision in 1988 to buy a single trading house in Eswatini.

It might have been a single trading house, but it was based on the decision made nearly 40 years ago that Standard Bank’s future lay in becoming an African giant and focusing on the long-term prospects of its business.

However, this does not mean that Standard Bank is resting on its laurels and not looking at how its business can be improved or expanded. 

“We are investing deliberately in the capabilities that will define the future of financial services, technology, payments and AI, while ensuring that we maintain the resilience, prudence and client‑centricity that have defined Standard Bank for more than 160 years,” Tshabalala said. 

“We will continue to deliver with the same intensity and consistency as we have over the past five years. We are confident that we will meet our targets and continue creating long‑term value for all our stakeholders.”

Standard Bank’s new targets are underpinned by four key drivers that it is positioned to capture value from –

• The first opportunity is tied to Africa’s favourable demographics, rapidly growing cities, rising consumption and greater investment activity. 
• The second opportunity arises from Africa’s considerable and ongoing infrastructure requirements. Standard Bank expects to play an increasingly central role in financing, structuring and advising on major projects across these sectors.
• A third structural theme is the expansion of intra‑African and global trade. 
• The fourth theme is the rapid evolution of Africa’s financial services landscape. As digital channels expand and payments modernise, Standard Bank sees substantial scope to grow capital‑light revenue while driving sustainable operating leverage.

“Africa remains one of the most exciting and dynamic growth regions in the world, and Standard Bank is exceptionally well-positioned to help shape and participate in that growth,” Tshabalala said. 

“We are entering this next strategic period with strong momentum, a proven ability to execute and a deep commitment to meeting the evolving needs of our clients. The opportunity ahead of us is significant.”