Standard Bank was named Africa's top bank by The Banker, a respected US publication, in its latest edition of the world's 1 000 top banks. This article takes a look at Standard's 2009 performance and its African strategy.

Coming in at 106th place in the world (ranked by Tier One capital), up four places from the 2008 rankings, means that Standard Bank was the top bank in Africa in 2009. The Banker's survey ranked First Rand Holdings, Nedbank and Investec second, third and fourth respectively. Commenting on Standard's position, Sim Tshabalala, Group Deputy Chief Executive, said: "Our improved ranking shows how strong and well-capitalised our balance sheet is, and that we are very much open for business. Standard Bank has a history of prudence, but has been particularly prudent in its risk and capital management through this financial crisis. This has allowed us to build up a very strong capital base that has not been eroded by write-downs caused by writing poor quality business." In the year to end 2009, total revenue from banking activities was up 2%, but operating expenditure increased by 8% as a consequence of infrastructure investment and spending on the Africa network. As a result, the group saw its headline earnings drop 17%. Banking earnings dropped 14% to R11.6bn (€1.2bn), with the additional three points the consequence of an 89% drop in earnings at Standard's insurance subsidiary, Liberty. The group's main strategy, however, is to look after its capital. Indeed, Standard's banking assets shrank by 13% in the year to December, to R1.1trn (€115bn), a lower rate of attrition than that which hit many other banks.

The top 1 000 banks in the survey saw total assets decline by only 0.9%, but the figure was skewed by rapid asset growth in developed countries, as banks were thrown a lifeline by panicked governments. Standard's drop in assets was chiefly the consequence of lower volumes in derivative assets and liabilities: the decline in its clients' activities in these markets accounted for 8% of the drop, while a shrinking loan book resulting from uncertainty on the part of corporate and retail clients contributed the remaining 5% drop (of which 3% was exchange rate related). Net asset value, in contrast, grew 2% in the year. Apart from South Africa, Standard trades in 16 other African countries. Banking activities in Africa outside South Africa accounted for 13% of headline earnings, and activities in the rest of the world 10%. Earnings from Africa were down 35% to R1.2bn (€125m), while earnings from the rest of the world grew 7%. The group ascribed its difficulties in Africa to the effect of a stronger rand diluting inflows from its subsidiaries on the income statement, and a difficult operating environment in Nigeria. The group's strategy differs according to the market it finds itself in. Overall, Standard prefers to focus on "high-potential" markets. Pedro Pinto Coelho, CE of Standard Bank in Angola, called Angola, Ghana and Nigeria a "priority". In 2007, Standard secured a controlling stake in Nigeria’s IBTC and merged it with existing Nigerian operations to create Stanbic IBTC Bank. While this operation has caused it some difficulty recently, the most populous country in Africa is an important destination for any company with African ambitions. In 2009, Standard bank obtained a banking licence in Angola, and the operation now has capital of $50m and will have three branches when it opens this year. Its operation in Ghana is much older: Stanbic Bank Ghana opened for business in 1999. In countries where its operations are older, Standard's strategy is to grow by expanding its branch network to attract deposits. In 2009 the bank installed 150 new ATMs and opened 18 new branches across the continent. Standard Bank's relationship with the Industrial and Commercial Bank of China, which acquired a 20% stake in Standard in October 2007, is sure to help it in its mission of growing its business in Africa, where Chinese entrepreneurs and capital flows are crucial pillars of local economies. A strategic partnership between Standard and China UnionPay (CUP), China’s only bankcard association and interbank network, will allow CUP's Chinese clients to draw money at Standard Bank ATMs in South Africa. The plan is to eventually extend this facility to other African countries.