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Standard Bank CEO Sim Tshabalala on results, COVID-19 & SA’s economic outlook
CNBC Africa spoke to Standard Bank CEO, Sim Tshabalala about his results which saw the company’s full-year headline earnings per share increase by 1 per cent to 1.766c.
Thu, 05 Mar 2020 15:41:23 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Standard Bank sees a 1 percent increase in full-year earnings amidst challenging economic conditions in South Africa, including a recession and low consumer confidence.
- Tshabalala remains optimistic about South Africa's long-term growth potential with the implementation of structural reforms, while highlighting the varying economic landscapes across different regions in Africa.
- The African Continental Free Trade Area (AfCFTA) presents exciting opportunities for Standard Bank to benefit from a more integrated market and drive growth across the continent, despite facing fierce competition in the banking sector.
Standard Bank's CEO, Sim Tshabalala, recently sat down for an exclusive interview with CNBC Africa to discuss the bank's latest financial results in the face of challenging economic conditions in South Africa and across the continent. Despite the tough environment, the bank managed to see a 1 percent increase in full-year headline earnings per share, showcasing resilience and adaptability. Tshabalala highlighted the various challenges the bank faced in the previous year, including a recession in the second half of 2019, job losses, and low consumer confidence.
In South Africa, the economy grew by a mere 0.2%, with a debt-to-disposable income ratio of 73%, indicating that people are reluctant to borrow. Tshabalala noted the cautious approach by both consumers and corporates towards investments in long-term projects, reflecting the overall uncertainty in the market. However, he remains optimistic about the long-term growth potential of South Africa if the necessary structural reforms are implemented.
Looking beyond South Africa, Tshabalala discussed the varying economic landscapes across different regions in Africa. He highlighted the resilience and growth in East Africa, where the economy is buoyed by diversified sectors and ease of doing business. In contrast, countries in the West, particularly those reliant on commodities, are facing challenges with low single-digit growth rates.
One key area of focus for Tshabalala is the African Continental Free Trade Area (AfCFTA), which he sees as a potential game-changer for the continent. The AfCFTA aims to promote intra-African trade by reducing barriers and enabling easier movement of goods, services, and people across borders. As the largest bank by assets in Africa, Standard Bank stands to benefit from a more integrated market that facilitates business operations and trade.
Tshabalala expressed excitement about the prospects of the AfCFTA and its potential to drive growth across the continent. He emphasized the need for ratification of agreements and the establishment of institutions to ensure the successful implementation of the trade agreement. Despite some initial challenges, Tshabalala remains optimistic about the long-term impact of the AfCFTA on Standard Bank's operations.
Addressing the competitive landscape, Tshabalala acknowledged the fierce competition in the banking sector, with new players like Bank Zero and Discovery Bank entering the market. He emphasized the importance of being customer-centric and meeting evolving consumer demands for better services at competitive prices. Tshabalala admitted to feeling a sense of paranoia about competitors and the need to constantly innovate and adapt to stay ahead in the market.
Overall, Tshabalala's outlook for 2020 is cautiously optimistic, with a focus on navigating the challenges of the current economic environment while looking ahead to the long-term growth potential in Africa.
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