South African banker Sim Tshabalala-led Standard Bank targets growth in East Africa

Key Points:

• Standard Bank is focusing on East Africa for growth, particularly in energy, agriculture, and infrastructure.
• The bank values East Africa’s high regional integration, which facilitates easier trade and economic activities.
• Organic growth and partnerships are the current priorities, with acquisitions also being considered for expansion.

Standard Bank, Africa’s largest bank, is steering its growth strategy toward East Africa, targeting key industries such as energy, agriculture, and infrastructure. 

Under CEO Sim Tshabalala’s leadership, the bank aims to leverage the region’s high integration levels, facilitating easier trade and movement of goods and people. Partnerships and acquisitions are also on the table to support this strategy.

The bank emphasises that one of the biggest draw cards in East Africa is its high level of integration, which facilitates easier trade and movement.

Tunde Macaulay, head of Africa regions and offshore for business and commercial banking, noted another region the group aims to penetrate is West Africa, given their strong positions in Southern and Central Africa.

“A year ago, the Standard Bank Group leadership council identified three growth areas: East Africa, becoming a top private banking bank in Africa, and leading in renewable energy,” Macaulay stated.

East Africa stands out due to its integrated policies and borderless trade environment, making it the most integrated region on the continent. Kenya, the region’s largest economy, is key to this strategy.

According to the African Development Bank, East Africa is set to lead Africa’s growth with projected rates of 5.1 percent in 2024 and 5.7 percent in 2025. Countries like Rwanda, Tanzania, Uganda, Ethiopia, Djibouti, and Burundi are expected to grow at more than five percent in 2024.

High government spending and strategic investments in connectivity and trade, alongside modernization in agriculture and services, are driving this growth.

Organic growth and partnership opportunities

Sim Tshabalala, Standard Bank’s group CEO, mentioned the possibility of acquisitions in East Africa. However, Macaulay clarified that the current focus is on organic growth, with potential partnerships being considered to enhance market distribution without extensive branch building.

“In South and Central Africa, we are in the top three and will continue to grow our market share. East and West Africa present significant opportunities due to our currently low market share,” Macaulay added.

In Kenya, the bank holds a four-percent market share, while in Nigeria, it is three percent, and in Ghana, between six percent and seven percent.

Strong financial performance across Africa

Standard Bank, valued at about R350 billion ($24.5 billion) on the Johannesburg Stock Exchange, operates in 20 African countries. Its operations outside South Africa now contribute more than 40 percent of its headline earnings. Since 2012, gross loans from other African countries have grown from 13 percent to 20 percent of the bank’s loan book, and deposit liabilities have increased from 15 percent to 22 percent.

The African Development Bank projects growth in West Africa to rise to four percent in 2024 and 4.4 percent in 2025, despite economic reforms in Nigeria and Ghana. Other countries in the region are expected to grow at least four percent in 2024.

Standard Bank’s under Sim Tshabalala focus on expanding its market share in East and West Africa aligns with its aim to capitalise on the high-growth potential of these regions. With strategic investments and a robust presence, the bank is poised to take advantage of the dynamic economic landscape in Africa.

Standard Group, under the leadership of Tshabalala 2017, has seen a marked improvement in financial performance. The bank’s latest annual report reveals a 27-percent increase in headline earnings and a 20-percent rise in total net income.

Tshabalala’s vision extends beyond present targets. Standard Bank’s commitment to sustainable finance is on track to surpass its initial R250-billion ($15.6 billion) goal by 2026, underscoring the bank’s ambition for Africa’s green transition.