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Maze Dive DIVE Nº 011

Standard Bank (JSE: SBK): (JSE: SBK): R24bn Half and CEO Succession

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Standard Bank (JSE: SBK) grew 1H25 HEPS 10% with a 19.1% ROE and an 817c dividend, then said its CEO and CFO will retire by end-2027. What it means.

Show notes

Standard Bank’s half-year results came with good news and a goodbye. Earnings up, returns up, dividend up. And the CEO and CFO who’ve run the show for a decade announced they’re retiring by the end of 2027. Like winning the Lotto and finding out your favourite braai master is moving to Perth.

By The Money Maze | Listen to the episode: Spotify

Standard Bank is the heavyweight of South African banking, Africa’s biggest bank by assets. On 14 August 2025 it released results for the six months to June 2025, and the market had two things to chew on: the numbers, and the succession plan.

Standard Bank 1H25: the headline numbers

  • Headline earnings: about R24 billion (R23.8 billion).
  • Headline earnings per share: up 10%.
  • Return on equity (ROE): 19.1%, up from the prior period.
  • Interim dividend: 817 cents per share, up 10%, a 56% payout ratio.
  • Capital: common equity tier 1 ratio of 13.2%.

Quick translation. Headline earnings strip out one-off items like asset sales and impairments, so you see what the business really earned. ROE asks: for every rand shareholders have tied up in the bank, how many cents of profit does it squeeze out? At 19.1%, Standard Bank is wringing out more juice than a Durban auntie making fresh mango atchar.

The CET1 ratio is the bank’s core capital cushion against losses. 13.2% says there’s plenty of padding. That’s what allows it to pay out more than half its earnings as dividends.

Where Standard Bank’s profit comes from

Banks make money two main ways:

  • Net interest income: the gap between what they charge on loans and what they pay on deposits.
  • Non-interest revenue: fees, trading, insurance and asset management. Every SMS notification and account fee adds up across millions of customers.

Standard Bank said growth came from a bigger balance sheet and strong fee and trading revenue. Investment banking origination hit a record, helped by energy deals.

The geographic split is the interesting part:

  • South African franchises: R11.6 billion, 49% of headline earnings.
  • Africa Regions: R9.7 billion, 41%.
  • Offshore businesses: R1.6 billion, 6%.
  • Its 40% stake in ICBC Standard Bank: R0.8 billion, 4%.

So more than 40% of earnings came from the rest of Africa, from markets like Angola, Ghana, Kenya, Mozambique and Nigeria. That’s a growth engine, and a source of currency and political risk.

Digital banking growth

In South Africa, digital retail clients grew 7%, digital transactions 12% and digital sales volumes 33%, which together lifted digital revenue 21%. Active clients grew 2% overall. Translation: fewer people queuing in branches, more people buying products on their phones, which is cheaper to service.

The succession plot twist

The headline that got the most attention wasn’t a number. CEO Sim Tshabalala and CFO Arno Daehnke will both retire at the end of 2027.

Tshabalala has led the group since 2013, through rand crashes, credit downgrades, state capture headlines and COVID. Daehnke has been the numbers guy since 2016. The board said it’s running an orderly, multi-year succession process, and Standard Bank traditionally promotes from inside.

This isn’t a sudden exit. It’s like ordering the Uber with a two-year pickup window. Investors usually like that, because it removes the shock of a surprise departure and gives the next team time to settle.

Standard Bank outlook and targets

Management expected 2025 ROE to stay within its 17% to 20% target range, and reaffirmed its targets for 2026 to 2028: headline earnings per share growth of 8% to 12% a year and an ROE of 18% to 22%. It also expected South African interest rates to stay flat for the rest of 2025 and inflation to stay in the bottom half of the target range.

Reading a bank’s dividend like a pro

Bank dividends work a little differently from other companies’. A bank can only pay out what its regulator and its own capital targets allow, because it has to keep a cushion against bad loans. That’s why the CET1 ratio and the payout ratio go together.

At 56%, Standard Bank kept 44% of its half-year profit to grow its loan book and protect capital. If the economy weakens and bad debts climb, the payout ratio is the first lever a bank pulls. So when you look at a bank’s dividend, also check three things: the capital ratio, the credit loss ratio (how much it’s setting aside for bad debts) and whether management is guiding for higher or lower impairments. A fat dividend with a thin capital buffer is a braai on a windy day.

The risks

  • Banks are cyclical: if the economy hits another pothole, bad debts rise and banks feel it first.
  • Africa Regions: big returns come with currency swings, inflation and sovereign risk.
  • Succession: even well-planned handovers bring uncertainty about strategy and culture.
  • Rate cuts: lower interest rates help borrowers but can squeeze the margin banks earn on deposits.

Stokvel Starter Pack

  • Headline earnings: about R24 billion, HEPS up 10%.
  • ROE: 19.1%, profit per rand of shareholder equity.
  • CET1 ratio: 13.2%, the core capital cushion.
  • Interim dividend: 817 cents, 56% payout.
  • Africa Regions: 41% of earnings.
  • Succession: CEO and CFO retire end-2027.

Takeaway: Standard Bank is earning strong returns and paying more out. The next two years are about whether the handover keeps that machine running.

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More from The Money Maze

Sources

  1. Standard Bank Group interim results announcement and dividend declaration, Standard Bank Group, 14 Aug 2025.
  2. Standard Bank Group announces strong returns and increased dividends, Standard Bank Group, 2025.
  3. Race is on to succeed Sim Tshabalala as Standard Bank boss, BusinessDay, 14 Aug 2025.

This is not financial advice.

Transcript

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0:00 Welcome back to another Maize Dive episode. I'm Jay and this is our Sunday special where we take one jersey listed company making headlines and tear through the numbers strategy and what it means for investors. Today's company, none other than Standard Bank, the heavyweight of South African banking, which just dropped its half year results. Profits are up, the share price bounced and the CEO and CFO have announced their retirement plans. It's like winning the lottery and then realising your favourite Brian Masters moving to Perth. So what's the big headline numbers? Well, for the first six months ending June 2025, Standard Bank reported headline earnings up 8% to 23.8 billion. That's compared to 22 billion for the same period last year. And let's just pause there for a second. Headline earnings is one of those accounting creatures that it basically strips out one off items to give investors A clearer picture of ongoing profitability. In other words, it's basically the bank saying ignore the noise, this is what we really made. On top of that, return on equity or Roe improved from 18.5% to 19.1%.

1:19 For the uninitiated, Rd. is like asking for every Rand shareholders have tied up in the business. How many cents of profits are we squeezing out at 9.1%? Handed Bank is ringing out more juice than a Durban auntie making fresh mango Archer. But what's behind the grass? Well first we need to figure out how banks make their money.

1:43 And that happens in two ways. Net interest income, Basically the gap between what they charge you for a home loan and what they pay you on your savings account. Spoiler alert, the gap is massive. Then we've got non interest revenue fees trading insurance asset management know that 7 Rand 50 you pages to get an SMS about your balance. Yep, multiply that by the amount of clients. Despite households being squeezed by inflation and debt repayments, Standard Bank kept growing. It's a bit like watching a battered old taxi still managing to overtake BMW on the N1.

2:22 You're not sure how, but it happens. Now let's get to the succession plot twist. Years were investors eyebrows raised a little bit. Standard Bank announced that CEOs Some Tshabalala and CFO Army Danke will both retire by the end of 2027. But here's the kicker. The bank has just extended the retirement age for executives from 60 to 63.

2:49 Sounds generous, right? Well, except for this plot twist, this rule doesn't apply to Some and Arno. That's like pick and pay announcing half price special on burritos and when you get to the toll they say not for you buddy. Some has been in the driving seat since 2013, which is basically a century in South African corporate leadership. He's weathered Rand crashes, cabinet reshuffles, downgrades, COVID and enough political drama to fall three seasons of Isidingo. Ano has been in the numbers seat since 2016, making sure the balance sheet doesn't look like a sausage queue at month end. So they planned exit isn't sudden. It's like they've ordered the Uber but the driver still circling sand and trying to find the right pickup point. But what did the market say?

3:41 Well, the Jayz gave Standard Bank the thumbs up. Shares climbed about 3% on the day of results, which for a giant bank is like Usain Bolt running 100 metres different in gumboots. Impressive. Why? Because investors love two things, rising profits and clear succession planning. The markets saw both. Even if it's a long farewell tour, knowing who's in charge and when the handover will happen keeps the investors nerves calms.

4:10 So what does that mean for you? Now let's put this into the stockpile translation guide that you become used to. Profits are growing. Headline earnings up 8%, Roe at 19 .1%. That's the bank speak for. We're doing just fine, thanks. Leadership changes coming someone Arno are on their way out. But it's a slow fade, not a panic exit and the market likes it. A 3% shape bump shows investors are confident but, and this is a big butt, like the kind that takes up a whole seat of a rear via bus.

4:48 Banks are cyclical. If defaults rise or the economy it's another pothole. Banks will feel it first. And succession always comes with uncertainty. Even the best handovers can get messy. So your CHEAT SHEET recap. Let's recap your stockpile starter pack for the JSE Jedi. This Standard Bank edition headline earnings 23.8 billion, that is up 8%, Roe 19.1%, which is strong. CEO and CFO retiring by 2027 despite the extended retirement age market reaction market like that. The shares are up about 3% and the investor take away. Standard Bank looks solid, but leadership change essays wobbly economy means it's not risk free. And then, while my jokes may be compounding faster than your overdraft, remember this is not financial advice. Please do your own research and speak to a licensed advisor. That's it for your maize dive on the Sunday on Standard Bank. Until next time, keep navigating the JSE maze and don't let banks charge you 7 and 50 just to tell you you're broke.

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