Standard Bank gets more bang for buck from staff after jobs cuts | Fin24
 
  • Renewables

    The govt is assessing a R160bn plan to establish the world’s largest green-energy financing initiative.

  • Biggest Jump

    Oil prices have spiked after drone attacks in Saudi Arabia disrupted global supply.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

Standard Bank gets more bang for buck from staff after jobs cuts

Aug 10 2019 11:55
Vernon Wessels and Roxanne Henderson

Standard Bank is earning more per employee than anytime over the past five years after reducing the number of workers by almost 2 100 in the 12 months through June.

Africa’s largest lender has used natural attrition and a reduction in the number of branches to trim staff to 46 168, according to an analysis of its first-half earnings released on Thursday. A push to digitisation has resulted in Standard Bank closing about 100 branches in South Africa, bringing the number to 531, and to reduce the size of its outlets by 14% to contain costs that had been growing faster than income.

The number of staff employed in South Africa declined to 31 201 from 32 880 with workers taking voluntary severance packages, or reaching retirement age. Another 397 jobs were cut in the rest of Africa, bringing the employee count in other regions down to 14 352.

The Johannesburg-based lender is increasingly relying on mobile-phone banking to reduce costs associated with branches, with the volume of face-to-face transactions declining 13% in the six months through June from a year earlier. 99% of transaction volumes now go through digital channels.

Standard Bank is having to rely on its operations in 20 other African markets to bolster revenue and run ahead of its overall expenses, with Standard Bank’s cost-to-income ratio improving to 57% in the first half from 57.6% a year earlier. South Africa’s economy has shrunk for three of the past five quarters.

“How quickly the African operations accelerate past South Africa is contingent entirely upon how quickly South Africa starts growing,” Standard Bank Chief Executive Officer Sim Tshabalala told reporters.

“South Africa is a large, sophisticated economy, and, so in our numbers, the base is huge. If South Africa grows at 2%, if you take gross domestic product, inflation and financial deepening, we’ll grow much much faster.”

Standard Bank wants to expand into new markets on the continent after opening up in Ethiopia and Ivory Coast, and will consider acquisitions if needed, Tshabalala said.

East Africa proved to be the bright spot for Standard Bank with first-half earnings before one-time items soaring 60% from a low base as the lender benefited from emerging oil and gas deals in the region as well as in Mozambique.

“East Africa a couple of years ago was flat on its back,” the CEO said. “That situation has been reversed and you are seeing our Kenyan operations flourish as a consequence of the easing of the regulatory environment.”

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What's your view on deep sea mining?

Previous results · Suggest a vote

Loading...