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2023 Interim Results
News 17 August 2023

Standard Bank earnings up on differentiated franchise and Africa-focused strategy

Standard Bank Group recorded headline earnings of R21.2 billion in the six months to 30 June 2023 (1H23), up 35% relative to the prior period (1H22) and delivered a return on equity of 18.9%. This performance can be attributed to the group’s differentiated franchise and Africa-focused strategy.


Sim Tshabalala, Standard Bank Group Chief Executive Officer says:” The bank has continued to support our clients and our teams have managed the business well through an uncertain geopolitical environment and volatile market conditions. As a group, we continued our sharp focus on client needs and expectations, while ensuring that we have kept a close eye on costs and managing the diversified client portfolio across our geographies.

Standard Bank Group’s 2023 Interim Results

Group results

Standard Bank’s prior year numbers have been restated following the introduction of IFRS 17 Insurance Contracts (IFRS 17). The new standard was effective from 1 January 2023 and applied retrospectively, from 1 January 2022.

In the six months to 30 June 2023 Standard Bank Group recorded headline earnings of R21.2 billion up 35% relative to the six months to 30 June 2022) and delivered a return on equity of 18.9%, up from 15.7% in the corresponding period.

Tshabalala says: “This performance is underpinned by robust earnings growth across our three banking businesses and improved earnings and returns in our insurance and asset management businesses. Our Africa Regions franchise performed particularly well, contributing 44% to group headline earnings.”

Net asset value grew by 10% and the group ended the current period with a common equity tier 1 ratio of 13.4%. The Group has declared an interim dividend of 690 cents per share which equates to an interim dividend pay-out ratio of 54%.

Our banking businesses benefitted from continued client franchise growth, larger balance sheets and increased transaction volumes, as well as certain market and interest rate tailwinds. Revenue growth was well ahead of cost growth which supported strong positive operating leverage and a decline in the cost-to-income ratio to 50.5%. Credit impairment charges increased across all portfolios, reflective of the difficult macroeconomic environment and deteriorating outlook, as well as client-specific strain. The credit loss ratio increased to 97 basis points, at the upper end of the group’s through-the-cycle range of 70 to 100 basis points. Banking operations recorded headline earnings growth of 42% to R18.7 billion and ROE improved to 19.0% (1H22: 15.3%).

Our insurance and asset management business unit, which includes Liberty, recorded improved operational performance and headline earnings of R1.4 billion (1H22: R1.1 billion). The life insurance operations recorded increases in indexed new premiums and the short-term insurance business recorded increased gross written premiums. Group assets under management increased by 6% to R1.4 trillion.

The South African banking franchise headline earnings grew by 17% to R8.4 billion and ROE improved to 15.2% (1H22: 13.7%). The Africa Regions franchise headline earnings grew by 65% and ROE improved to 28.4% (1H22: 20.4%). The top six contributors to Africa Regions headline earnings were Ghana, Kenya, Mozambique, Nigeria, Uganda, and Zimbabwe.

“During the period, the group pro-actively assisted over 20 000 South African clients through various client assistance initiatives. The group also continued to assist clients with their sustainability journeys and structured several innovative market firsts in the period. In 1H23, the group mobilised R28 billion in sustainable finance for clients, of which 40% was for clients in Africa Regions,” says Tshabalala.

We are committed to driving sustainable growth and value by making a positive social, economic and environmental (SEE) impact, and effectively managing environmental, social and governance (ESG) risk.

The business is well on its way to delivering on the R50 billion sustainable finance commitment for FY23. We also raised R6.6 billion in green and sustainability-linked treasury finance to support the group’s sustainable finance initiatives. The bank has thus far mobilised R82.5bn in sustainable finance since January 2022 relative to our R250bn – R300bn target by 2026. The bank has invested significantly in green energy. In Bid Window 5, and the Emergency Energy Rounds in SA, Standard Bank has supported nearly 30% of the project which expects to produce 900 MW or about 20% of Eskom’s current installed capacity. For every Rand of loans extended on non-renewable energy, Standard Bank has loaned more the R5 on renewable energy.

Personal and Business customers have been supported with more than R450m across green aligned developments, affordable housing and retrofitting of existing homes up to June 2023. More than 3500 solar panels have been installed in residential homes, producing over 3200 MwH, with Standard Bank’s LookSee platform being a major contributor to providing home services such as energy and water management.

Operating environment

In the first six months of the year, inflation remained elevated, central bank policy rates continued to trend up and global growth slowed. Markets remained volatile. China’s recovery has been slower than previously expected, and the financial sector experienced some turbulence.

In sub-Saharan Africa, higher interest payment obligations have placed pressure on sovereigns with high debt levels. Inflation rates remained at elevated levels. During 2023, we have welcomed positive actions in Ghana, Kenya, Nigeria and Zambia which have reduced sovereign credit risks in these markets. The most notable change was the liberalisation of the Naira which, although negative for inflation in Nigeria in the short term, is promising for growth and investment in the medium to long term. Sovereign credit risk remains high, however, in Malawi and has increased in Angola and Mozambique. In February 2023, South Africa and Nigeria were grey listed by the Financial Action Task Force.

South Africa experienced similar inflation and interest rate pressures, exacerbated by continued slow reforms, poor service delivery, and increased electricity and logistics disruptions. Inflation remained outside the South African Reserve Bank’s (SARB) target range of 3% to 6% for most of the period, resulting in a further increase in the repo rate of 125 basis points to end the period at 8.25%. Interest rates have increased by 450 basis points since the start of 2022, placing considerable pressure on consumers and businesses. Consumer and business confidence remained low, and demand declined.


Downside risks to global growth remain. Inflation is still expected to decline but the rate thereof may slow into 2024. Interest rates are therefore expected to remain higher for longer. The International Monetary Fund (IMF) forecasts global real GDP growth of 3.0% for 2023 and 2024. The IMF expects sub-Saharan Africa to grow at 3.5% and 4.1% in 2023 and 2024 respectively. Significant currency devaluations, for example in Angola and Nigeria, are likely to drive elevated inflation in the short-term.

In South Africa, inflation has recently returned to within the SARB’s target range and expectations are that it will move closer to the midpoint in the medium term. Accordingly, in July 2023, the SARB kept interest rates flat, which we believe to be the end of the tightening cycle. Standard Bank Research expects interest rates to remain flat at 8.25% for the rest of the year and real GDP growth to be 0.8% for 2023. Moderating inflation, interest rate cuts (expect cumulative cuts of 125 basis points in 2024) and increased electricity supply should drive an improvement in confidence, demand, and investment in 2024. Real GDP growth is expected to be 1.4% in 2024 and closer to 2.0% in the medium term.

Against this constrained background, for the six months to 31 December 2023 (2H23), we expect high interest rates to constrict demand and balance sheet growth. Interest rates are likely to have peaked and net interest margin tailwinds are expected to fade. Market volatility is unlikely to continue at levels seen in 2022 and 1H23, which will result in lower client trading activity. In 2H23 (versus 2H22), net interest income growth is expected to moderate to low teens and banking fees are expected to grow mid-single digits, while trading revenue is expected to decline by mid-teens if market volatility and increased client activity is not repeated. Cost growth is expected to moderate. In terms of credit impairment charges, while BCB’s credit impairment charges are expected to remain elevated, PPB’s charges are expected to decline as the book growth slows and specific de-risking initiatives gain traction. CIB’s credit impairment charges could match the 1H23 charge given continued sovereign and corporate stress.

For the twelve months to 31 December 2023 (FY23), banking revenue growth is expected to be stronger than previously guided in March 2023 but moderate relative to the strong 1H23 on 1H22 performance.

Despite continued management focus, banking cost growth is likely to remain elevated on the back of ongoing inflationary pressures, particularly in Africa Regions, higher performance-related incentives, continued investment in our franchise to ensure our client propositions remain competitive. Banking revenue growth is expected to remain ahead of cost growth resulting in positive jaws. The credit loss ratio is expected to remain in the upper half of the group’s through-the-cycle target range of 70 to 100 basis points driven by year-on-year increases in credit impairment charges across all three banking business units. The group’s FY23 ROE is expected to be inside the group’s 2025 ROE target range of 17% to 20%.

Tshabalala says, “As in previous cycles, we will continue to support our clients through these difficult times. We remain committed to our purpose of driving Africa’s growth. This includes supporting Africa’s just energy transition and, particularly, South Africa’s renewable energy projects. In South Africa, we continue to work with the authorities to improve the legal and compliance environment in the context of the FATF grey listing recommendations and with the public and private sector to accelerate growth-enhancing initiatives.”

“In line with our 2025 commitments, we remain focused on delivering earnings growth, attractive returns and continued positive impact in the economies and societies in which we operate.” Tshabalala says

Additional information

  • 18 million, +7% - active clients
  • 355 million, +14% - digital banking transactions in six months
  • R1.8 trillion, +8% - client funds entrusted to us for safekeeping
  • R1.4 trillion, +6% - assets under management across the continent
  • R83 billion - sustainable finance mobilised since January 2022
  • More than 20 thousand - South African clients pro-actively assisted through various client assistance initiatives
  • More than R7 billion - in rewards awarded to SA customers over the past decade

Media resources

  1. High level summary of interim results – Click HERE
  2. 2H2023 prospects, global outlook and domestic performance - Click HERE
  3. Africa growth story and prospects - Click HERE
  4. Africa Regions contribution to interim results - Click HERE

Group Targets 2025

Revenue Growth
(CAGR 2020/2025)
7% - 9%
Cost-to-income ratio Approaching 50%
Credit loss ratio
70 basis points – 100 basis points
Return on Equity 17% - 20%
CET1 Ratio >11.0%



For more information contact
Ross Linstrom
Standard Bank Media Relations
Virginia Magapatona
Head, Communication & Reputation Management