As at 24 April 2026

Executive Summary

Key highlights

In this report, we review the FY25 results released in March 2026:

Financial results at a glance:

• Net interest income (NII): NII increased by 4.4% from R101.3 billion in FY24 to R105.7 billion, supported by loan growth and a larger deposit base. The net interest margin compressed by 7 basis points (bps) to 483 bps, reflecting the impact of lower average interest rates as the SARB continued its rate easing cycle.

• Non-interest revenue (NIR): Non-interest revenue rose by 10.3% from R61.1 billion to R67.4 billion, underpinned by stronger fees, commissions and trading income.

• Insurance and Asset Management (IAM): IAM revenue increased from R19.4 billion in the prior period to R21.7 billion for an 11.7% gain, while headline earnings increased from R3.3 billion in FY24 to R4.1 billion, up 25.7%. Assets under management (AUM) grew by 14.7% to R1.8 trillion (FY24: R1.5 trillion).

• Credit performance: Credit impairment charges declined by 5.5% from R15.2 billion in FY24 to R14.3 billion, reflecting improved portfolio trends, supported by an improving macroeconomic environment.

• Operating expenses increased by 4.7% from R95.2 billion to R99.7 billion, fuelled by an 8.7% increase in cloud, software and technology expenses, plus a 5.1% increase in staff costs.

• Group ROE improved to 19.3% (FY24: 18.5%). Total dividends rose from 1 507 cents per share in FY24 to 1 695 cents per share for a 12.5% rise.

• Corporate and Investment Banking (CIB) delivered the strongest growth, with headline earnings rising by 18% from R20.5 billion in FY24 to R24.1 billion. Personal and Private Banking (PPB) increased by 3% from R11.0 billion to R11.4 billion, while Business and Commercial Banking (BCB) declined by 4% from R9.6 billion in FY24 to R9.2 billion.

Analyst thesis

Our recommendation is based on:

• Africa’s leading bank with a diversified pan-African franchise: Standard Bank is Africa’s largest bank by assets, operating across multiple financial sectors with a presence in 20 sub-Saharan African countries and select offshore hubs. Its regional and international operations contribute ~40% of total net income, providing differentiated exposure to faster-growing sub-Saharan African economies, rising demand for banking and financial services, and infrastructure and energy-transition financing opportunities that most domestic peers cannot replicate.

• SBK benefits from an improving South African backdrop, reduced load-shedding, logistics reform and FATF grey list removal, while also supported by structural growth in sub-Saharan Africa. However, lower South African GDP growth (~1.6%), high unemployment and FX and political volatility across African markets remain key constraints on credit demand and earnings growth.

• Robust returns and capital discipline: SBK delivers strong profitability, with ROE reaching 19.3% in FY25, at the top of the group’s 2025 target range of 17%–20%. Capital generation remains robust, with CET1 of 13.8%, supporting a 56% dividend payout ratio, and enabling both organic and inorganic investment, through mergers and acquisitions (M&A), across the franchise.

• Despite strong share price performance in 2025, the stock now trades above our intrinsic value. The NTM P:E of 9.4x remains above the five-year average of 7.8x, suggesting that the quality of the franchise and its multi-year growth outlook are largely priced in.