Standard Bank CEO on what South Africa needs to get right

“Simpler. Better. Faster.” was Standard Bank’s slogan at the turn of the century. Now, it is the advice its current CEO has for the government of South Africa. 

Speaking to Daily Investor after the bank’s interim results for the first six months of 2025, Sim Tshabalala outlined what the country needs to get right to revive its local economy. 

Standard Bank posted a strong set of results, with headline earnings up 8% to R23.8 billion and a return of equity of 19.1% – its highest ever level under the current regulatory regime. 

However, a constant theme during the bank’s results over the past few years is the strong performance of its businesses in Africa, while its home market lags due to a stagnant economy. 

The share of the Africa Regions portfolio has grown immensely in recent times, now making up 41% of the bank’s headline earnings.

Crucially, it is a highly profitable business for Standard Bank, with West Africa contributing R3.5 billion at a return on equity of 39%. 

East Africa contributed R2.7 billion to headline earnings with a return on equity of 22%, while South and Central Africa posted R3.9 billion of earnings at a 23.4%. 

In stark contrast, its South African business posted headline earnings of R9.6 billion at a growth rate of only 2% year-on-year and a return on equity of 15.6%. 

Tshabalala explained that this is partly due to some of the additional costs borne in South Africa, granted it is the home base, with its management paid in the country and its head office located in Rosebank. 

“South Africa is the home base, and that is the launch pad that we use for growth elsewhere. But for South Africa, our African operations would not exist,” he said. 

However, South Africa’s stagnant economy is beginning to affect the state’s finances and the cost of capital in the country, both of which directly impact Standard Bank’s operations. 

“With a GDP of over $400 billion, what does South Africa need to do to grow faster? I would say simpler, better, faster execution,” Tshabalala said. 

As Standard Bank’s slogan in the early 2000s, when it was emerging onto the continent, Tshabalala says it resonated with South Africa’s current situation. 

The country, like the bank, has the right set of ideas to boost growth – it is just not happening fast enough at the moment. 

How to do it simpler, better, faster

Tshabalala explained that South Africa’s current set of reforms is correct in its focus on electricity and logistics, with increased private sector participation being key. 

Apart from executing these reforms more quickly and effectively, Tshabalala said the easiest way for the country to be more efficient is to remove corruption and ensure there are no unproductive rents in government processes. 

“Execute this current set of structural reforms and then deal with the municipalities to ensure that distribution of services is done in a corruption-free way so that there are no unproductive rents in the process,” he said. 

Rent-seeking or unproductive rents refers to efforts to increase one’s wealth or income by manipulating the economic or political environment, rather than through productive activities that create new wealth. 

“To put it differently, South Africa needs to strengthen its institutions. The most important of which is to make sure that we bolster the country’s rule of law,” Tshabalala said.  

The rule of law and good governance, particularly policy certainty, are significant factors in attracting foreign investment to a country. 

Currently, South Africa has relatively low policy certainty compared to some of its peers and developed economies, with the rule of law coming under strain during the era of state capture and ongoing corruption scandals.

“When the rule of law in South Africa was at its best, the country was growing at its fastest rate. At its worst, the economy was growing its slowest,” Tshabalala said. 

“At the moment, the rule of law is improving, and this is slowly translating into improved GDP growth.”

“I would offer to you that we need faster acceleration of the strengthening of key institutions, the police, law enforcement, municipalities, and more generally, the eradication of corruption.”

He summed this up as the removal of unproductive rents in the economy, which will make it easier to do business and get things done in an effective and efficient manner. 

“We need to make it easier to do business, reduce the red tape, strengthen the state, and make sure that criminals get prosecuted,” Tshabalala said. 

“That is what South Africa needs. Then we will grow. That $400 billion will sing.”