Sim Tshabalala on H1 earnings, investment opportunities in Africa

Sim Tshabalala, Group CEO of Standard Bank, recently joined CNBC Africa to discuss the company's half-year earnings and investment opportunities in Africa. Tshabalala highlighted the company's strong performance in South Africa, with headline earnings up 4% in rand and 17% in constant currency. Despite challenges in countries like Nigeria and Angola due to weakening currencies, Standard Bank's South African operations saw a 12% increase in earnings. Meanwhile, operations outside South Africa were flat in rand but showed significant growth in constant currency, demonstrating a robust franchise poised for further expansion. The acquisition of Liberty has proven to be a successful move, with the insurance business showing strong performance and dividend payouts totaling $11.5 billion. Tshabalala emphasized a strategic focus on aligning insurance and asset management products within the banking base of over 15.5 million customers. Regarding the macroeconomic environment, Tshabalala expressed optimism for South Africa's growth prospects, citing an expected decline in interest rates and inflation, which would boost consumer and business confidence. He projected GDP growth of 2% and above in the medium term, driven by successful elections and structural reforms to stimulate growth. When questioned about the impact of monetary policy on bad debts, Tshabalala acknowledged the challenges high inflation poses to consumers but highlighted a reduction in non-performing loans and improving credit extension metrics, indicating a positive outlook for credit quality. In terms of the Government of National Unity and efforts to exit the grey listing, Tshabalala underscored the importance of enhancing the ease of doing business, upholding the rule of law, and accelerating structural reforms to drive economic growth. He expressed confidence in the country's political will to address regulatory compliance issues and mitigate risks associated with the grey listing. Overall, Tshabalala's outlook on Standard Bank's performance and Africa's investment landscape is optimistic, backed by a solid financial performance and strategic initiatives to drive long-term growth and sustainability.