Good news for Standard Bank customers in South Africa
Standard Bank says that should the United States-Iran peace deal hold, confidence should return to markets in the second half of the year, which should boost client sentiment.
The United States and Iran signed a Memorandum of Understanding (MOU) to halt the war for sixty days and open the Strait of Hormuz, allowing the flow of around 20% of the world’s oil supply.
The war threw South Africa from a somewhat optimistic environment into chaos, with fuel price increases driving higher inflation and prompting an interest rate hike.
Standard Bank said the operating environment has become more complex, with geopolitical tensions, higher energy prices, and trade-policy uncertainty weighing on global growth and inflation expectations.
Across its countries of operation, macroeconomic conditions varied. “While inflation was relatively contained across several markets, the outlook became less benign,” it said.
Standard Bank said that the uncertainty brought by the Middle East conflict, as well as inflation and monetary policy actions, weighed on clients’ confidence to transact, invest, and borrow.
“Should the recent positive developments hold, we would expect confidence and momentum to return in the second half of the year,” the group said
The bank added that the domestic backdrop has continued to be supported by ongoing structural reform momentum, improved fiscal trajectory and resilient terms of trade.
The constructive backdrop was duly noted by credit rating agencies, with South Africa now having received upgrades from Fitch and S&P, while Moody’s changed its outlook to positive.
First five months of the year
In the five months ending 31 May 2025, Standard Bank said it recorded a resilient performance despite an uncertain global operating environment.
The group said that it benefited from its scale and diversification, with earnings growth underpinned by the ongoing franchise momentum.
This drove balance sheet and revenue growth, and a disciplined approach to costs and credit risk.
Balance sheet growth was also supported by strong growth in Investment Banking and increased disbursements in Business and Commercial Banking, primarily in South Africa.
The Personal and Private Banking portfolio saw moderate growth, with the home loans portfolio continuing to grow at low single digits.
Current accounts and term deposits recorded strong growth, in line with the group’s transactional client franchise focus.
The group added that income growth was also supported by balance sheet growth, increased client activity, and an expanded client base, driving period-over-period transactional activity.
“This was partly offset by the negative endowment impact of lower average interest rates across the portfolio, and ongoing competitive pricing pressures in the home loans portfolio,” it said.
“Trading revenue growth was supported by periods of elevated market volatility and market-making opportunities, particularly in the first quarter of the year.”
The group noted that it maintained cost discipline while absorbing increased costs associated with business activity.
The group is continuing to invest in growing its client franchise while optimising its physical infrastructure. It added that cost growth was broadly in line with revenue growth on a period-on-period basis.
Credit impairment charges were also reduced despite an increase in forward-looking provisions, reflecting the weakening macroeconomic outlook.
Lower credit impairment charges, combined with a growing balance sheet, also resulted in a lower credit loss ratio.
The group added that strong earnings growth momentum by the Insurance & Asset Management business in 2025 continued into 2026.
This was due to improved life risk experience, continued good persistency levels, and good growth in assets under management in South Africa and Nigeria, it said.
“As expected, the group’s earnings growth in 5M26 moderated relative to the 12% recorded in the first quarter of the year,” it said.
“The Africa Regions portfolio continued to benefit from its diversity. A softer performance in the South & Central Region was more than offset by growth in the West and East Africa portfolios.”
It added that the continuing growth in the South African franchise was underpinned by continued
positive momentum in the business and competitive client offerings.
The group will report its financial results for the six months to 30 June 2026, on 13 August 2026.
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