‘Tough year ahead’ for Standard Bank
The year ahead could be a tough one as the competition heats up in Standard Bank’s largest market and economic growth lags expectations in many African markets, says group CEO Sim Tshabalala.
SA banking has seen increased competition in the past few years after the entry of ambitious and well-resourced entrepreneurs such as Patrice Motsepe, Michael Jordaan and Adrian Gore. These entrants all come into the industry while the economy remains depressed.
“Competition in our industry is just going to keep on getting more intense, and social and technological change will continue to accelerate. In most of Africa, growth will be slower than we hoped, and there are significant risks in the global economy,” he wrote in a new year’s message for staff on Wednesday.
Tshabalala has recommitted the group to driving technological innovation.
“We made excellent progress on digitisation in 2019 and we’re going to do even better in 2020,” he wrote, adding that while digitisation, automation and artificial intelligence will continue, these are just tools to serve the group’s clients alongside traditional values of “humanity, empathy, insight and urgency”.
Tshabalala said things considered “science fiction” in his youth had been “surpassed by reality”. This includes the fact that some African countries, such as Kenya, are now among the world’s fastestgrowing economies.
Speaking after the group’s interim results in August 2019, Tshabalala cited how the East African region of which Kenya is a part was “flat on its back” economically just a few years ago.
Kenya and Ethiopia are expected to grow at 5.8% and 7.7% in 2020, according to Bloomberg. Standard Bank is already well positioned to benefit from this, deriving more than a third of its earnings from the rest of the continent in 2019.
SA is grappling with its highest unemployment rate yet. Unemployment continues to be one of President Cyril Ramaphosa’s biggest challenges as he deals with spluttering economic growth, rising job losses and a historical backlog of almost 10 million unemployed people.