South Africa’s R540 billion banking university

Standard Bank serves as a proto-university for South Africa’s banking industry, developing talent for the rest of the sector to draw on. 

Its peer, FirstRand, operates similarly through FNB and RMB, with Capitec building something similar in recent years. 

Other players in the sector tend to feed off the talent developed by Standard Bank and FirstRand, as they produce a surplus to their own requirements.

Denker Capital co-founder and financial services expert Kokkie Kooyman explained that acting as a ‘university’ gives Standard Bank continuity that the rest of the industry struggles to match. 

The bank, valued at R540 billion on the JSE, largely develops its own talent, which CEO Sim Tshabalala describes as building its own timber, which it uses to fill its leadership positions. 

Tshabalala himself is set to be replaced by an internal candidate when he retires in 2027 after a decade as sole CEO. 

He is fond of reminding people of Standard Bank’s bench strength and its ability to fill leadership positions with internal appointments. 

“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,” Tshabalala previously told Daily Investor. 

“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.”

All of the following CEOs for the next 151 years were internal appointments. “This tradition is going to continue,” Tshabalala said. 

Kooyman said this is because of Standard Bank’s prestigious reputation and ability to attract young talent straight out of university. 

“Standard Bank has almost been a university along with FirstRand. Young talent will always go to Standard Bank or FirstRand,” Kooyman told BizNews. 

“That is where you go when you are young if you want to make your name in banking. They grow their own timber there.”

Standard Bank invests in these individuals to develop them into premier bankers across its business units and to give them experience operating across the rest of Africa and abroad. 

Many of these people leave the bank because there is a bottleneck that produces more highly skilled and talented people than it needs, and it cannot afford to keep them happy. 

“If you go to many banks and financial institutions in South Africa, you will find a lot of ex-Standard Bank bankers who have been lured away because only a few can make it to the top at the bank,” Kooyman said. 

An example of this is the current Absa CEO Kenny Fihla, who spent 18 years at Standard Bank and led its prestigious Corporate and Investment Banking division. 

“Kenny realised that he won’t get to be CEO at Standard Bank because Sim was there, and then he got the opportunity to go turn Absa around,” Kooyman said. 

Kooyman said this was a clever appointment by Absa, as they got an experienced banker as CEO who has experience working at a world-class institution. 

It also reflects well on Standard Bank that it can produce this talent and fill the vacancy left by Fihla internally with the experienced Luvuyo Masinda, who may just replace Tshabalala.