South Africa’s biggest bank firing on all cylinders

Standard Bank continues to strong growth, with the bank reporting a 10% increase in headline earnings per share and an improved return on equity of 19.1%. 

Both of these metrics are at the upper end of the bank’s new medium-term targets, which are set to kick in from 2026. 

For the six months to the end of June 2025, Africa’s biggest bank by assets recorded headline earnings growth of 8% to R24 billion. 

“This strong performance was driven by continued robust franchise momentum and active capital management,” CEO Sim Tshabalala said.

In particular, its crown jewel of Corporate and Investment Banking (CIB) delivered a strong set of results, growing its headline earnings by 16% to R12 billion. 

Investment banking origination reached a new record, driven by increased investment in the energy and infrastructure sector in South Africa and other African countries. 

The South African business remains Standard Bank’s most profitable, growing headline earnings by 14% to R11.6 billion despite a difficult trading environment. 

Africa Regions contributed R9.7 billion to headline earnings, which was impacted by a stronger rand throughout the period. Constant currency growth was a stronger 13% compared to growth in rand terms of 8%. 

The split of Standard Bank’s earnings between South Africa and the rest of the continent remains fairly even, with the South African division making up 49% of headline earnings. 

As a result of this strong performance, the bank raised its interim dividend by 10% to R8.17 per share.

In the first half of the year, active clients grew by 2%, driven by growth in both South Africa and Africa Regions. 

The bank said the deployment of personalised, data-driven offers to clients drove client retention and entrenchment and increased revenue. 

In South Africa, digital retail clients increased by 7%, successful digital transactions increased by 12% and digital sales volumes increased by 33%. 

Together, this drove a 21% increase in digital revenue period on period. In addition, growth in active business clients was underpinned by growth in the transactional and merchant account base in South Africa and targeted client acquisition strategies in African Regions.

Standard Bank has set ambitious targets for itself for the coming few years, affirming its commitment to the medium-term targets set out at the beginning of the year. 

These are summarised as follows –

• Banking revenue growth of mid-to-high single digits in rand terms
• Banking cost-to-income ratio to be flat to marginally down year on year
• Group ROE will remain well anchored in the group’s 2025 target range of 17% to 20%

This will prove challenging in the current operating environment, with the bank noting that US tariff announcements have driven market volatility and fear. It said this has abated towards the middle of the year. 

Global inflation and interest rates have trended lower, albeit more slowly than initially expected, and real gross domestic product (GDP) growth expectations have slowed. 

On average, inflation eased across the group’s portfolio of countries in sub-Saharan Africa (outside of South Africa). 

This allowed for central banks in most markets to hold or decrease interest rates. In contrast, interest rates increased in Ghana, Mauritius and Zambia during this period.

 In South Africa, global uncertainty combined with local political developments dented confidence and negatively impacted the growth outlook. 

Inflation trended down and was below the bottom of the South African Reserve Bank (SARB) target range of 3% to 6% for three consecutive months before ticking up to 3.0% in June 2025.