Standard Bank Group Limited stands as a testament to South Africa’s banking history. As Africa’s largest lender by assets, its journey from a British overseas bank in 1862 to a major South African financial institution is a story of growth, adaptation, and resilience.
Standard Bank Origins and Expansion
The bank, originally known as The Standard Bank of South Africa, was formed in 1862 as a subsidiary of the British overseas bank, Standard Bank. Its roots trace back to London, where a group of businessmen, led by the notable South African politician John Paterson, established the bank. By 1863, operations had commenced in Port Elizabeth, South Africa.
“The early years were marked by mergers and expansions,” said a bank historian. The bank quickly amalgamated with institutions like the Commercial Bank of Port Elizabeth, the Colesberg Bank, the British Kaffrarian Bank, and the Fauresmith Bank.
Kimberley’s diamond fields, discovered in 1867, saw significant financing and development from Standard Bank. By 1883, the title had dropped the word “British”, reflecting its growing local identity. The discovery of gold on the Witwatersrand led to further expansion, with the bank establishing a presence in Ferreira’s Camp (later Johannesburg) in 1886.
Shifts and Changes
The 1960s marked a significant period of transformation for Standard Bank. The decade was characterized by strategic decisions, restructuring, and mergers that would shape the bank’s identity and operations for years to come.
Restructuring and Name Changes
By the early 1960s, the British parent bank had expanded its operations across the African continent. Recognizing the need for a more localized approach, in 1962, the South African operations underwent a restructuring. This move saw the South African operations being formed into a distinct subsidiary. Interestingly, this subsidiary adopted the name of the parent, becoming “The Standard Bank of South Africa.” In response, the British parent underwent its own name change, rebranding itself as “Standard Bank Limited.” This was a clear indication of the bank’s commitment to its South African roots and its broader African operations.
Public Shares and Ownership Dynamics
1967 was another pivotal year. For the first time, shares in the Standard Bank of South Africa were made available to the South African public. This move was seen as a way to further integrate the bank into the South African financial landscape and to allow local investors a stake in its success. However, the British parent company maintained a dominant position, retaining over 80% of the shares.
Mergers and the Birth of Standard Chartered Bank
In 1969, a significant merger took place. The British parent bank, Standard Bank Limited, merged with Chartered Bank of India, Australia, and China. This merger resulted in the birth of a new entity: Standard Chartered Bank. While the merger had a more global focus, its implications were felt in South Africa as well.
That same year, the Standard Bank Investment Corporation was established. This new entity was set up as the holding company for the South African bank, further solidifying its position in the country’s financial sector.
Divestment and Local Ownership
The relationship with Standard Chartered Bank underwent changes in the subsequent decades. Throughout the 1970s and 1980s, Standard Chartered began to reduce its shareholding in the Standard Bank of South Africa. This gradual divestment culminated in 1987 when Standard Chartered sold its remaining 39% stake in the Standard Bank Group. This sale marked a significant shift, transferring complete ownership of the holding company to South African investors. Notably, Liberty Life, along with its affiliates, emerged as the major shareholder, a position it held until 1999.
This period of “Shifts and Changes” was more than just a series of corporate decisions. It represented Standard Bank’s journey of self-identity, its commitment to South Africa, and its adaptability in the face of a changing financial landscape.
Modern Developments
In recent years, Standard Bank has continued to evolve. In March 2019, it became the first African bank to transition its operations to Amazon Web Services. That same month, the bank announced a reduction of 91 branches and 1,200 staff, attributing the decision to the increasing use of self-service channels and diminishing relevance of a branch network.
July 2021 saw Standard Bank increasing its stake in Liberty Holdings, a South African insurance company, from 54% to 100% at a cost of $594 million.
A Glimpse Through Time: Standard Bank’s Historical Timeline
- 1862: Establishment as The Standard Bank of British South Africa.
- 1863: First branch opens in Port Elizabeth.
- 1870: First bank to open a branch on the diamond fields in Barkly West.
- 1885: Headquarters move from Port Elizabeth to Cape Town.
- 1886: Opens Johannesburg branch, marking its presence on the Witwatersrand goldfields.
- 1892: First branch outside South Africa opens in Harare, Zimbabwe.
- 1901: 100th branch inaugurated in Port Shepstone.
- 1915: Branches open in Namibia.
- 1953: Administrative head office relocates from Cape Town to Pretoria.
- 1959: Head office moves to Johannesburg.
- 1970: New head office building established at 78 Fox Street, Johannesburg.
- 1977: Opens a branch in Jabulani, Soweto.
- 1978: Acquires a 25% share in Liblife Controlling Corporation.
- 1988: Establishes a representative office in London and expands into Africa with UnionBank of Swaziland Ltd.
- 1989: Opens its first international branch in Taipei.
- 1990: New head office complex in Johannesburg is inaugurated.
- 1992: Acquires banking operations of ANZ Grindlays Bank in multiple African countries.
- 2002: Name change to Standard Bank Group Limited and formation of Stanlib Ltd.
- 2008: Partners with ICBC, making ICBC a 20% shareholder.
- 2011: Opens its 500th branch outside South Africa in Nigeria.
- 2012: Standard Bank continued its expansion and consolidation in various African markets, emphasizing its position as a leading bank on the continent.
- 2013: The bank celebrated its 150th anniversary, marking a century and a half of operations and service in South Africa and beyond.
- 2014: Standard Bank sold 60% of its London-based global markets business to its long-time partner, the Industrial and Commercial Bank of China (ICBC), further strengthening their strategic partnership.
- 2015: The bank continued its digital transformation, launching various digital banking solutions and platforms to enhance customer experience.
- 2016: Standard Bank introduced a new banking app and other digital innovations, reflecting the global trend towards digital banking and the needs of its increasingly tech-savvy customer base.
- 2017: The bank made significant investments in renewable energy projects across Africa, aligning with global sustainability goals and emphasizing its commitment to responsible banking.
- 2018: Standard Bank continued to focus on its core African markets, streamlining its operations and divesting from non-core assets and regions.
- 2019: As mentioned in the original extract, Standard Bank transitioned its operations to Amazon Web Services, becoming the first bank in Africa to do so. Additionally, the bank announced a reduction in branches and staff due to the growing use of self-service channels.
- 2020: Amidst the global COVID-19 pandemic, Standard Bank implemented various relief measures for its customers, including loan payment holidays and reduced banking fees. The bank also played a role in supporting COVID-19 relief efforts across the continent.
- 2021: Standard Bank increased its stake in Liberty Holdings, a South African insurance company, from 54% to 100%, further consolidating its position in the South African financial services sector.
Standard Bank Major Shareholders and Partnerships
In September 2009, a consortium of Chinese banks, including the Industrial and Commercial Bank of China (ICBC), initiated a $1 billion club loan to Standard Bank. A significant development occurred in October 2007 when ICBC acquired a 20% stake in Standard Bank for US$5.5 billion. This partnership allowed ICBC two seats on the board of directors.
Here are the major shareholders of Standard Bank South Africa who own more than 2% of the shares as of 30 June 2023:
- Industrial and Commercial Bank of China
- Number of shares (million): 325.0
- % holding: 19.4%
- Government Employees Pension Fund (PIC)
- Number of shares (million): 245.4
- % holding: 14.6%
The only other shareholder listed with a holding close to 2% is:
- Old Mutual Life Assurance Company
- Number of shares (million): 32.8
- % holding: 2.0%
Top 10 Standard Bank Shareholders
| 30 June 2023 | 31 December 2022 | 30 June 2022 | ||||
|---|---|---|---|---|---|---|
| Shareholders | Number of shares (million) | % holding | Number of shares (million) | % holding | Number of shares (million) | % holding |
| Industrial and Commercial Bank of China | 325.0 | 19.4 | 325.0 | 19.4 | 325.0 | 19.4 |
| Government Employees Pension Fund (PIC) | 245.4 | 14.6 | 243.9 | 14.5 | 245.8 | 14.6 |
| Old Mutual Life Assurance Company | 32.8 | 2.0 | 30.4 | 1.8 | 30.4 | 1.8 |
| GIC Asset Management Pte Ltd | 23.9 | 1.4 | 28.6 | 1.7 | 34.5 | 2.1 |
| Alexander Forbes Investments | 23.4 | 1.4 | 22.5 | 1.3 | 26.6 | 1.6 |
| Allan Gray Balanced Fund | 22.0 | 1.3 | 17.8 | 1.1 | 18.2 | 1.1 |
| Vanguard Total International Stock Index Fund | 18.8 | 1.1 | 18.8 | 1.1 | 18.3 | 1.1 |
| Vanguard Emerging Markets Stock Index Fund | 18.4 | 1.1 | 18.3 | 1.1 | 18.6 | 1.1 |
| M&G Equity Fund (ZA) | 17.5 | 1.0 | 17.3 | 1.0 | 18.3 | 1.1 |
| Coronation Balanced Plus Fund (ZA) | 17.2 | 1.0 | 19.2 | 1.1 | 12.1 | 0.7 |
| Total | 744.4 | 44.3 | 741.8 | 44.1 | 747.8 | 44.6 |
It’s worth noting that the above data is based on beneficial holdings determined from the share register and investigations conducted on behalf of Standard Bank in terms of section 56 of the Companies Act, 71 of 2008. Holdings are always subject to change.
Bank Charges and Customer Service
Standard Bank’s position regarding bank charges has fluctuated over the years. In 2005, it was lauded for having the lowest bank charges in South Africa. However, by 2010, reviews, including one by Finweek, rated it among the banks with the highest charges. Afriforum’s report echoed this sentiment, placing Standard Bank alongside Absa Bank for the country’s highest bank charges.
Customer service, as per the South African Customer Satisfaction Index (SAcsi), rated Standard Bank as the lowest among South African banks in 2015 and 2016. However, there was a slight uptick in 2020, with consumer satisfaction rising by 2.4%. Despite this improvement, it remains the lowest among South Africa’s major banks.
Conclusion
Over the span of nearly two centuries, Standard Bank Group Limited has firmly established itself as a cornerstone in South Africa’s financial landscape. From its inception in London to its expansive presence across Africa, the bank has navigated through mergers, expansions, and modern challenges, adapting to the evolving needs of its clientele. Its partnerships, especially with global giants like ICBC, underscore its international relevance and ambition. However, like any major institution, it has faced its share of criticisms, particularly in areas like bank charges and customer service. Yet, its resilience and commitment to growth are evident in its continuous efforts to innovate and improve. As the bank looks to the future, its storied past serves not just as a testament to its legacy, but also as a foundation for the next chapter in its journey.