Standard Bank reveals the impact of the Iran war

A challenging operating environment from the conflict in the Middle East has resulted in Standard Bank’s clients being less confident to transact, invest, and borrow. 

This has translated into relatively subdued earnings growth at the bank for the first five months of its 2026 financial year, it said in an update to investors before entering a closed period. 

The bank has left its guidance for headline earnings per share growth of 8% to 12% unchanged, as it expects the knock-on effect on client confidence to be temporary. 

“Should the recent positive developments hold, we would expect confidence and momentum to return in the second half of the year,” Standard Bank said. 

The bank, Africa’s largest by assets, explained that the operating environment became progressively more complex as geopolitical tensions weighed on economic activity. 

While inflation has remained relatively contained across some of the bank’s markets, the outlook has deteriorated meaningfully. 

In South Africa, the bank noted that the domestic backdrop continued to be supported by reform momentum, improved state finances, and strong terms of trade. 

Despite the elevated uncertainty, the bank said that it recorded a resilient performance for the five-month period, supported by its scale and diversification. 

It explained that earnings growth during the period moderated relative to the 12% recorded in the first quarter of the year, but remains within its targeted range. 

The growth was driven by ongoing franchise momentum, which drove balance sheet and revenue growth during the period. 

Standard Bank’s crown jewel, its Corporate and Investment Banking business, drove balance sheet growth alongside Business and Commercial Banking. 

This was on the back of strong investment banking origination and disbursements from the business banking unit in South Africa. 

The Personal and Private Banking business recorded moderate growth, as the home loans portfolio continued to grow at low single digits. 

The bank said it was happy with the strong growth in current accounts and term deposits, which is in line with its focus on growing its transactional client base. 

Income growth was supported by balance sheet growth, increased client activity, and an increased client base, which drove higher transactional activity. 

However, this was partly offset by the negative endowment impact of lower average interest rates across the bank’s markets and ongoing competitive pricing pressures in the home loans portfolio in South Africa. 

Trading revenue growth was supported by periods of elevated market volatility and market-making opportunities, particularly in the first quarter of the year.

Credit impairment charges were lower, period-on-period, despite an increase in forward-looking provisions in response to the deteriorating macroeconomic outlook. 

Lower credit impairment charges, combined with a growing balance sheet, resulted in a lower credit loss ratio.

The strong earnings growth momentum reported by the Insurance & Asset Management Business in 2025 continued into 2026. 

This was supported by improved life risk experience, continued good persistency levels, and good, period-on-period growth in assets under management in South Africa and Nigeria.