Standard Bank, Africa's largest by assets, is aiming for a return on equity (ROE) - a key measure of profits - of up to 20% by 2025 as it looks to transform into a platform for services beyond banking, it said on Friday.
After years of domestic economic stagnation, several South African lenders are pursuing a similar approach that will see them act as a platform for other goods or services that complement their financial offerings - a model based on the approach pioneered by technology firms like Amazon.
Standard Bank, aiming to have transformed into a platform business by 2025, said it had identified 10 other areas adjacent to finance where it will combine its own offerings with that of partners, with one being agriculture.
"By building out from its solid foundation in traditional financial services, the group will meet its clients on the digital platforms where they are shopping, socialising and doing business," it said in a statement ahead of a strategy update to investors.
It said this new model means it can target an ROE of 17-20% and revenue growth of between 7% and 9% annually by 2025, from an ROE of 12.9% currently and annual revenue drop of 8% last year.
It also said its common equity tier 1 capital ratio - a metric showing a bank's financial strength - would remain over 11%, and it would target a cost-income ratio trending towards 50% from 58.3% currently.
The lender pointed to one example of where it already acts as a platform player: partnering with agricultural input suppliers and wholesale crop purchasers to link Africa's small farmers to global supply chains and markets.
Chief Executive Sim Tshabalala said ramping up in adjacent activities will mean the bank can "compete and win in a world where competitive lines are constantly redrawn".
The bank's shares were down 0.8% at 0740 GMT.
Standard Bank lays out 2025 'platform' plan, sets new targets
Image: Masi Losi
Standard Bank, Africa's largest by assets, is aiming for a return on equity (ROE) - a key measure of profits - of up to 20% by 2025 as it looks to transform into a platform for services beyond banking, it said on Friday.
After years of domestic economic stagnation, several South African lenders are pursuing a similar approach that will see them act as a platform for other goods or services that complement their financial offerings - a model based on the approach pioneered by technology firms like Amazon.
Standard Bank, aiming to have transformed into a platform business by 2025, said it had identified 10 other areas adjacent to finance where it will combine its own offerings with that of partners, with one being agriculture.
"By building out from its solid foundation in traditional financial services, the group will meet its clients on the digital platforms where they are shopping, socialising and doing business," it said in a statement ahead of a strategy update to investors.
It said this new model means it can target an ROE of 17-20% and revenue growth of between 7% and 9% annually by 2025, from an ROE of 12.9% currently and annual revenue drop of 8% last year.
It also said its common equity tier 1 capital ratio - a metric showing a bank's financial strength - would remain over 11%, and it would target a cost-income ratio trending towards 50% from 58.3% currently.
The lender pointed to one example of where it already acts as a platform player: partnering with agricultural input suppliers and wholesale crop purchasers to link Africa's small farmers to global supply chains and markets.
Chief Executive Sim Tshabalala said ramping up in adjacent activities will mean the bank can "compete and win in a world where competitive lines are constantly redrawn".
The bank's shares were down 0.8% at 0740 GMT.
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