Standard Bank’s hidden R1.75 trillion gem

Standard Bank is steadily building an insurance and asset management giant after it reintegrated Liberty into the group in 2022. 

The buyout of Liberty’s minority shareholders and the full integration of the insurer’s business have given Standard Bank all the assets to build a fully-integrated financial services provider. 

As a result, the bank, in theory, is able to fulfil all a client’s financial needs from transactions and lending through to life insurance and retirement savings. 

The bank is planning over the next three years as part of its SBG 2028 strategy to incorporate insurance and asset management products into its retail banking app and business banking platforms. 

This has already been implemented with a select number of products, with Personal and Private Banking CEO Funeka Montjane saying the clear path forward is to accelerate the cross-selling of products from the bank’s Insurance and Asset Management (IAM) business. 

The ability to cross-sell these products gives the bank an incredibly profitable source of earnings through insurance premiums and fees from investment products. 

These earnings are relatively capital-light compared to traditional banking activities, such as lending, which consume significant capital. 

Standard Bank has now built the blocks for the future of its IAM business by bringing Liberty back into the fold. 

“What we did was to take all the insurance businesses and all the asset management businesses which were scattered throughout the group and put them under one umbrella,” Group CEO Sim Tshabalala explained to Daily Investor.

“What we did after that was to focus IAM on two vectors. The one is the external market and the other is the Standard Bank client base,” Tshabalala said. 

The IAM business can not only sell its products into the bank’s retail client base, but can also bring new clients into the bank. 

In the bank’s latest results, this approach is beginning to pay dividends, with inter-business attribution up 11%. This measures the effective cross-selling of Standard Bank’s products.

IAM CEO Yuresh Maharaj revealed at the bank’s 2026 Capital Markets Day that his business will become increasingly intertwined with Montjane’s unit and the Business and Commercial Banking division. 

Maharaj explained that Liberty’s insurance business, now combined with Standard Bank’s operations, is steadily penetrating deeper into the retail and business banking client base. 

This gives it a significant advantage over competitors in terms of distribution and scale, while also enabling the IAM business to grow into Africa with the rest of the bank’s operations on the continent. 

Maharaj expects the IAM business to grow its gross written premiums at an annual rate above 10% over the next three years on the back of this. 

Apart from these opportunities, the integration of Liberty and Standard Bank’s insurance business has created significant cost-savings for the group.

Maharaj said that over R16 billion has been “upstreamed” to the bank since the 2022 acquisition of Liberty’s minority shareholders, with the combined operations delivering R600 million in synergies per annum. 

The asset management giant

While the cross-selling opportunities and synergies are clear in terms of the insurance business, the bank has also touted the scale of its asset management business. 

The clear advantage here is that the investment business, which includes Stanlib, can now leverage the bank’s distribution channels and retail banking base to sell its products. 

Relatively few asset managers in South Africa have such a distribution capability, with many now turning to partnerships with banks or even building their own banking offerings to replicate these channels. 

However, Maharaj admitted that the asset management business has had struggles in turning its credible investment performance into continued client inflows. 

The asset management business has also historically been relatively confined to Standard Bank’s existing client base and staff, with it now trying to increasingly compete on the open market. 

This business has the potential to be highly profitable for Standard Bank, with asset management generating capital-light returns and further diversifying the bank’s earnings. 

In South Africa alone, the asset management business sits on R1.25 trillion of assets through Stanlib, its discretionary fund manager business, and Liberty’s offering. 

The bank’s African asset management operations remain relatively small, with only R200 billion in assets and the vast majority coming from Nigeria. 

This is partly due to the low penetration of investment and pension products on the continent, with 69% of all accessible wealth in Africa being found in South Africa. 

However, the markets in other parts of the continent are growing at double the rate of South Africa’s wealth due to faster economic growth and the fact that they are coming off a low base. 

West Africa’s wealth management market is growing at 7.8% per annum compared to South Africa’s 3.2%. East Africa is gathering momentum at 6.6% annual growth. 

Maharaj sees significant opportunities here for the asset management business to leverage Standard Bank’s distribution into Africa. 

The bar he set for the asset management business is high, with it aiming to more than double its market share of inflows onto platforms by 2028. This would amount to around R100 billion worth of cumulative inflows.