The relative strength of the rand versus other African currencies and the US dollar significantly impacted the financial performance of Standard Bank’s huge African business, resulting in modest headline earnings growth.

This was revealed in the bank’s annual financial results for the year ended 31 December 2024, where it delivered on its targets and recorded strong underlying growth.

Africa’s largest bank by assets grew its headline earnings by 4% to R45 billion and managed to maintain a return on equity of 18.5%.

This was driven by modest growth in net interest income across its businesses of 3.2% to R101.25 billion as credit impairment charges declined.

The bank’s non-interest revenue declined slightly year-on-year to R61.1 billion due to an increase in fee and commission expenses.

Crucially, Standard Bank’s efforts to grow its non-banking businesses appear to be bearing fruit, with its insurance and asset management revenue growing by 17% to R3.3 billion.

However, despite this, its profit after tax actually declined by 1% year-on-year to R43.7 billion. The bank increased its dividend by 6% to 1,507 cents per share.

The bank explained that its South African franchise delivered double-digit earnings growth, driven by increased client activity and improved credit trends.

Standard Bank grew its active client base to over 20 million people, driven largely by growth in South Africa. Its client activity also picked up, driving increased fee and commission income.

The bank explained that this growth was partly due to the increased optimism in South Africa following the formation of the Government of National Unity (GNU).

South Africa’s new government drove improved consumer and business confidence, while investor sentiment towards the country became more positive.

Electricity supply stabilised, and progress to reduce logistical constraints was viewed positively

However, the improving economic situation and investor sentiment towards South Africa negatively impacted the financial performance of the bank’s African business, with a stronger rand limiting earnings growth.

The Africa Regions business also delivered a strong performance, growing earnings by 22% in local currency.

However, after accounting for a stronger rand during the reporting period, the Africa Regions portfolio delivered earnings of R18 billion – marginally lower than the prior period.

In the 2024 financial year, Africa Regions contributed 41% to group headline earnings, driven by Angola, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Uganda and Zambia.

More positively for the bank, economic headwinds across its portfolio of African businesses are expected to moderate, and currencies should be more stable in 2025.

The bank also said that any disruption from US policy changes, particularly trade tariffs, is expected to only result in temporary trade disruption and inflationary pressures.

It explained that these short-term disruptions are not expected to change the significant medium and long-term opportunities the bank sees across Africa.

CEO Sim Tshabalala said the bank is on track to meet its 2025 strategy and targets of banking revenue growth of mid-to-high single digits, a declining cost-to-income ratio, and a return on equity between 17% and 20%.

Standard Bank also committed to new targets for the medium-term running from 2026 to 2028 –

• Headline earnings per share growth of 8% to 12%

• Return on equity target range of 18% to 22%

“We will both defend and grow our core businesses and pursue growth opportunities. We will focus on opportunities where we have a clear competitive advantage and that provide accretive risk-adjusted returns,” the bank said.