By Omobolaji Solagbade with agency report

Standard Bank Group Limited has said it may consider buying a retail bank in Nigeria to boost growth on the continent.

The Deputy Chief Executive Officer of the bank, Mr. Sim Tshabalala, said in Johannesburg, “In Nigeria, we’re in corporate and investment banking but we’re sub-scale in retail. We could grow organically if we get a decent acquisition that would accelerate our reaching critical mass.”

Reuters reported that the bank had initiated a number of cost saving strategies in its international operations which were targeted to save $75m on an annualised basis

On the group ‘s intention to halve the amount of capital utilised in operations outside Africa, Maree pointed out that the largest portion of capital outside Africa was in the group’s subsidiary bank in London and that the strategic requirement for a London base had been re-evaluated.

“We remain convinced that the London presence as a legal entity with a banking licence is critical for the growth of our Corporate & Investment Banking franchise. However, the capital usage is excessive and the cost base is disproportionately high.

“We aim, therefore, to make better use of the prudential limit for foreign currency lending on The Standard Bank of South Africa Limited’s balance sheet for transactions in our core sectors which will reduce the capital demand in London, but increase the capital requirements in South Africa,” Maree stated.

Standard Bank’s results for the six months ended 30 June 2011 clearly show that the group has turned the corner and that its refined strategy is paying dividends.

For the half year, the group generated headline earnings of R6.6bn, up by 11 per cent on the corresponding period last year, and headline earnings per share of 418.4 cent were up by ten per cent.

The group’s Return on Earning has started to trend upward, recording an ROE of 14.5 per cent for the six months compared to 12.5 per cent for the 2010 year.

Commenting on the result, the Group Chief Executive Officer of the bank, Mr. Jacko Maree, said, “It is encouraging to see that the action we took on costs in 2010 is starting to bear fruit.

“Cost efficiency has become an increasingly important management tool for banks worldwide as the outlook for revenues remains uncertain. Recognising this in 2010, we embarked on a range of long-term and short-term cost saving initiatives across the group, many of which are well under way and expected to have lasting impacts.”

Maree explained that towards the end of 2010, Standard Bank had articulated a refined strategy in response to a changed banking landscape post-crisis and intense pressures on revenues following the global recession.

“We are some way down the road in implementing this refined strategy. In terms of our ambition to have first-class, on-the-ground operations in chosen countries in Africa, we have continued to invest tactically in these businesses,”he said.

“In some markets we have proved that we can grow sustainable universal banking platforms, with strong Personal, Business Banking and Corporate and Investment Banking franchises and we are earning good returns. In other markets we are just beginning this journey and the returns in these markets dilute the overall performance from the rest of Africa.

“We recognise that we are still not at sufficient scale in key regions, nor present in some potentially attractive and fast-growing countries. We have a good platform from which to expand, we have the capacity to grow organically and we are also looking for opportunities for acquisitions,” Maree added.

Source: Punch