Standard Bank smashes through targets with 19.3% ROE as African operations drive growth

• Africa’s largest lender posts R49.2 billion (about $3 billion) headline earnings, hikes dividend 12%, and signals confidence with new R450 billion ($26.3 billion) sustainability target.

Standard Bank Group delivered a strong performance in 2025, blowing past the financial targets it set four years ago and rewarding shareholders with a double-digit dividend payout even as it resets its ambitions for the next cycle.

The Johannesburg-based lender, Africa’s largest by assets, reported headline earnings of R49.2 billion ($3 billion) for the year ended December 2025, pushing return on equity (ROE) to 19.3 per cent, the top end of its 2025 target range of 17 to 20 per cent. Strong balance sheet growth, resilient fee income, and lower credit impairments combined to produce headline earnings per share of 3,026 cents, up 12 percent from the prior year.

The board declared a final dividend of 878 cents per share, bringing the total payout to 1,695 cents, also 12 per cent higher year-on-year, underscoring the strength of the group’s capital position. The common equity tier 1 ratio remained robust at 13.8 per cent, well above regulatory minimums.

“We keep our promises and we meet our targets,” said Sim Tshabalala, Standard Bank Group CEO, in a statement accompanying the results. The 2025 performance, he said, validates the strategy laid out in 2021 and confirms the group’s “capacity for disciplined execution.”

Africa regions now contribute 40% of Standard Bank Group earnings

The geographic diversification of Standard Bank’s franchise came into sharp focus in 2025, with operations outside South Africa now accounting for a significant slice of the pie.

The Africa Regions business, spanning subsidiaries from Angola to Zambia, delivered headline earnings of R19.7 billion, representing a full 40 per cent contribution to group headline earnings. Other key performers included Angola, Ghana, Kenya, Mauritius, Nigeria, Tanzania, Uganda and Zambia, demonstrating the resilience of the pan-African model even as individual currencies and economies faced distinct pressures.

By comparison, the core South African banking operations contributed R24.9 billion (51 percent), while the Offshore businesses (including Standard Bank’s Isle of Man, Jersey, and UK operations) added R3.1 billion (6 percent). The group’s 40 percent stake in ICBC Standard Bank Plc, the London-based joint venture with China’s Industrial and Commercial Bank, chipped in R1.5 billion (3 percent).

This shows that Standard Bank is no longer just a South African bank with African outposts. It is evolving into a continental franchise, with the geographic spread providing natural hedges and growth optionality.

Business unit breakdown: CIB and IAM lead the charge

A closer look at the group’s four main business lines reveals where the momentum is building.

Corporate and Investment Banking (CIB) was the star performer, with headline earnings jumping 18 percent and ROE surging past 22 percent. The division benefited from robust trading revenues and solid balance sheet growth across its corporate client base, as well as a lower credit impairment charge thanks to an improving macroeconomic environment.

Insurance and Asset Management (IAM) delivered the fastest earnings growth, with headline earnings up 26 percent and ROE also exceeding 22 percent. Total assets under administration and management swelled 15 percent to R1.8 trillion, supported by positive investment market movements both locally and offshore, alongside continued market expansion in the Africa Regions.

Personal and Private Banking (PPB) grew headline earnings by a more modest 3 percent, but delivered a significant improvement in ROE to over 23 percent. The division’s digital push is gaining traction: digital retail clients grew 9 percent, successful digital transactions increased 5 percent, and the proportion of transactional clients who transact digitally climbed to 67 percent.

Business and Commercial Banking (BCB) was the outlier, with headline earnings 4 percent lower. However, the division’s ROE remained stellar at over 38 percent, reflecting the inherently capital-light nature of its business model and the strength of its existing book.

Efficiency drive pays off as cost-to-income ratio hits 50.2 per cent

Standard Bank’s relentless focus on cost discipline is yielding results. Total income growth exceeded cost growth, delivering positive jaws of 64 basis points. The cost-to-income ratio improved to 50.2 per cent from 50.5 per cent in the prior year, edging closer to the group’s 2025 target of “approaching 50 per cent.”

The improvement looks even more dramatic over a longer horizon: the cost-to-income ratio has tumbled from 59.1 per cent in 2020, reflecting years of investment in automation, digital channels, and process re-engineering. Credit loss ratio also improved to 73 basis points, landing comfortably within the group’s through-the-cycle target range of 70 to 100 basis points.

Sustainable finance: R100bn mobilised in 2025 alone

Beyond the headline numbers, Standard Bank is making an aggressive push into sustainable finance, a strategic priority that is increasingly moving from the margins to the mainstream of African banking.

In 2025 alone, the group mobilised R100 billion in sustainable finance for clients. Since 2022, cumulative mobilisation has reached over R277 billion. Buoyed by this momentum, Standard Bank has raised its target: from R250 billion by 2026 to R450 billion by 2028.

The move positions the bank as a key conduit for climate and ESG-related capital flows into Africa, a continent disproportionately vulnerable to climate change but historically underserved by green finance. It also aligns with the funding priorities of multilateral development banks and development finance institutions, many of which are Standard Bank’s long-standing partners.

Outlook: Cautious optimism as rates ease and growth accelerates

Looking ahead to 2026, Tshabalala struck a tone of cautious optimism, grounded in improving macroeconomic fundamentals both globally and in Standard Bank’s core markets.

The International Monetary Fund expects global real GDP growth of 3.3 per cent in 2026 and 3.2 per cent in 2027, supported by technology investment, policy support, and accommodative financial conditions. For sub-Saharan Africa, the IMF forecasts growth accelerating from 4.4 per cent in 2025 to 4.6 per cent in 2026 and 2027, driven by macroeconomic stabilisation and reform efforts in key economies.

In South Africa, Standard Bank’s own research team expects inflation to average 3.6 per cent in 2026 and 3.3 per cent in 2027, with interest rates declining by a cumulative 75 basis points over the next two years. Real GDP growth is forecast at 1.5 per cent in 2026, improving to 1.8 per cent in 2027.

“We are confident in our ability to drive sustainable growth in the short, medium and long term,” Tshabalala said, while acknowledging the challenges: intensifying competition from fintechs, evolving regulatory dynamics, and the accelerating role of artificial intelligence and other advanced technologies.

For the 2026 financial year, the group expects:

• Banking revenue growth in the mid-to-high single digits
• A slight decline in the cost-to-income ratio
• Credit loss ratio to increase but remain in the bottom half of the 70–100 basis point range
• ROE to increase relative to the 19.3 percent achieved in 2025

Over the three-year horizon to 2028, Standard Bank has set targets of 8 to 12 per cent compound annual growth in headline earnings per share, with ROE consistently within the 18 to 22 per cent range.

“Our 2028 strategy is anchored in our ambition to compete and win in our chosen markets and segments,” Tshabalala said. “The targets we have set are ambitious yet achievable, supported by disciplined execution and a strong performance culture.”

Geopolitical risks linger

The group’s guidance comes with a caveat. Geopolitical developments in the Middle East, particularly the conflict involving Iran, continue to introduce uncertainty. While the current outlook incorporates available information, an enduring or escalated conflict could affect trade, inflation, and growth assumptions, the bank noted.

Rounding off a year of operational and financial achievement, Standard Bank was once again ranked Africa’s and South Africa’s Most Valuable Bank Brand by Brand Finance for the fifth consecutive year. Forbes named it among the World’s Best Employers for 2025—the highest-ranked organisation from Africa—while TIME Magazine and Newsweek included the group in their lists of the World’s Best Companies and World’s Most Trustworthy Companies, respectively.

Read also: Nedbank’s $855M bid targets NCBA as South African giant eyes East Africa expansion

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