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Cape Town - Standard Bank aims to double its commercial banking business over the next three years.
It currently operates across 19 African markets.
The lender’s 1 500 commercial banking clients, which account for about R1bn of Standard Bank’s headline earnings, typically have an annual turnover of between R300m and R1.2bn.
Standard Bank estimates that its market share constitutes 34% of South Africa's commercial banking, which in turn is estimated to contribute between about 13% and 15% of the nation’s gross domestic product (GDP).
Craig Polkinghorne, head of commercial and business banking at Standard Bank, said, although Standard Bank’s commercial banking clients are fairly diverse in size and industry, they tend to embody the entrepreneurial qualities of high speed decision making and an ability to adapt to an ever-changing business environment.
Many of the bank’s commercial banking customers also tend to be involved in high-growth or specialist, niche industries.
“Although our clients tend to be rather diverse, one common thread in most of their operations is logistics - a critical element in any business that needs to get its product from a port or production facility to its customers,” said Polkinghorne.
He said the biggest influences on Standard Bank’s commercial banking customers include general business confidence, wage inflation, interest rates, fuel costs and other administrative price increases such as toll fees and electricity costs.
“Most of our clients have been around for some time and operate in fairly established industries, so they are generally quite resilient to inflationary pressures," he said.
"The result is that many of them will first try to absorb cost pressures before passing them on to consumers.”
The majority are also in very good financial health with sizeable amounts of cash on hand. The implication is that they are fairly under-leveraged as a portfolio.
A key aspect of Standard Bank’s strategy to grow its commercial banking business will be to use its extensive African footprint to assist clients who want to expand their operations into other parts of the continent.
Polkinghorne estimates that approximately 50% of Standard Bank’s commercial banking clients are looking for expansion opportunities and linkages in the rest of Africa.
It currently operates across 19 African markets.
The lender’s 1 500 commercial banking clients, which account for about R1bn of Standard Bank’s headline earnings, typically have an annual turnover of between R300m and R1.2bn.
Standard Bank estimates that its market share constitutes 34% of South Africa's commercial banking, which in turn is estimated to contribute between about 13% and 15% of the nation’s gross domestic product (GDP).
Craig Polkinghorne, head of commercial and business banking at Standard Bank, said, although Standard Bank’s commercial banking clients are fairly diverse in size and industry, they tend to embody the entrepreneurial qualities of high speed decision making and an ability to adapt to an ever-changing business environment.
Many of the bank’s commercial banking customers also tend to be involved in high-growth or specialist, niche industries.
“Although our clients tend to be rather diverse, one common thread in most of their operations is logistics - a critical element in any business that needs to get its product from a port or production facility to its customers,” said Polkinghorne.
He said the biggest influences on Standard Bank’s commercial banking customers include general business confidence, wage inflation, interest rates, fuel costs and other administrative price increases such as toll fees and electricity costs.
“Most of our clients have been around for some time and operate in fairly established industries, so they are generally quite resilient to inflationary pressures," he said.
"The result is that many of them will first try to absorb cost pressures before passing them on to consumers.”
The majority are also in very good financial health with sizeable amounts of cash on hand. The implication is that they are fairly under-leveraged as a portfolio.
A key aspect of Standard Bank’s strategy to grow its commercial banking business will be to use its extensive African footprint to assist clients who want to expand their operations into other parts of the continent.
Polkinghorne estimates that approximately 50% of Standard Bank’s commercial banking clients are looking for expansion opportunities and linkages in the rest of Africa.
