Clients well placed for recovery
We took extraordinary steps to assist our clients from the early days of the crisis
By Zweli Manyathi, Chief Executive of Personal and Business Banking at Standard Bank Group
Having taken bold steps to support our Personal and Business Banking (PBB) clients through the worst of the economic slump, we are shifting our focus to the recovery phase and the road ahead.
As we do this, we will continue to work with our clients to find suitable solutions that enable them to participate meaningfully in the economic recovery.
Consumers and small and medium enterprises (SMEs) have borne the brunt of the economic fallout from COVID-19. While necessary to save lives, national lockdowns have severely disrupted businesses and impacted the incomes of individuals.
In the early days of the crisis, banks focused on getting consumers and businesses through the initial economic shock.
We raced to expand our client support capabilities to manage the surge in financial relief requests. We cut or waived fees and premiums, provided free value-add offerings, and put money back in our clients’ pockets through insurance premium cashbacks and lower UCOUNT reward programme criteria. Amid a wave of retrenchments across the economy, we paid out claims linked to loss of income and retrenchment cover.
By the end of June, Standard Bank had provided temporary relief to retail and SME clients amounting to R118bn. Moreover, the bank’s short-term and life insurance businesses paid out R6.4bn in insurance claims in the first half of 2020, and provided more than R65m in fee waivers and moratoriums.
In recognising that our long-term success is inextricably linked to the wellbeing of our clients, we continue to look for ways to assist them as we turn our attention to the road ahead.
We believe that the recovery will be partly underpinned by digitisation, which has been accelerated by the pandemic as more clients move to digital channels. Many of the shifts in client habits are likely to be permanent.
In our PBB business, digital transaction volumes increased by as much as 78% in the first half of 2020 in South Africa, accounting for 99% of total transactions. In Africa Regions, digital transaction volumes increased 24% and comprised 94% of total transactions. Physical transactions are expected to continue to decline as the transition to digital accelerates post COVID-19.
Poised for a recovery
Although many clients remain under pressure, some are already well placed to participate in the recovery phase, having accumulated savings during the lockdown period.
In the first six months of the year, PBB customer deposits rose 16%, with strong growth in savings and investment products as well as call deposits. Retail client balances increased during lockdown, and business clients built up reserves amid the uncertain environment. Across Africa Regions, growth in PBB deposits was underpinned by strong current and savings account inflows. This is an encouraging sign as we prepare for the recovery.
While the pandemic has had a devastating impact on lives and livelihoods, it has also created new opportunities for both our clients and ourselves. This includes the opportunity to accelerate change.
We have also seen client activity and business turnover levels continue to recover since the end of June. And where possible, we have agreed to extend payment holidays and other relief measures.
The period ahead will undoubtedly be challenging, but as this publication shows, Africa’s people are tenacious, resourceful and resilient. We will work closely with our clients to ensure that they achieve their dreams and that Africa reaches her true potential.