Standard Bank and FirstRand: March Updates

Originally published on LinkedIn, April 1, 2026

The past week has seen Standard Bank and FirstRand provide 3 big market communications; Standard Bank’s Capital Markets Day, FNB’s announcement of a new CEO and restructuring, and parent FirstRand’s follow-up on the UK Financial Conduct Authority’s final pronouncement on historical industry misconduct in car financing. Here are my takeaways.

Standard Bank’s Capital Markets Day

Depending on your perspective, Standard Bank’s Market Day was a “yawn” if you were looking for changes in strategy, or a victory lap if you were looking for performance (guidance). The “mothballed” Economist and Management Consultant in me delights at the clarity in “where to play”. Africa has a demographic advantage relative to the world, and growth rates higher than South Africa; massive infrastructure and energy needs; and growing trade and capital flows and corridors, so SBK’ll continue leaning into these. Nothing new here — strategy remains unchanged. And by virtue of having done so for some time now, they have built the capacity and capabilities (they are market makers in most) to continue distancing themselves from their competitors. Clarity on “where to play” is a non-trivial plus.

If there was one notable strategic difference, it could be inferred within the fourth strategic pillar, around “evolving with the financial services landscape”. At the most recent Legacy 4 bank financial presentations, AI or artificial intelligence was mentioned a combined total of zero times. Nothing, nada! To a Dunning-Kruger enthusiast like myself, that is criminal. And to the extent that commentary was offered in smaller public forums, it was mostly BS and AI-washing. In the course of the Standard Bank’s afternoon’s presentations AI was mentioned 57 times, mostly by the uber-competent COO. What matters is not that they are actually doing anything radically different of substance, or doing more than their (legacy) competitors. They are not. Strategy only gains traction when the C-suite communicates that something is important. That statement has been made emphatically!

The net outcome of the day, aggregating the 4 profit generating BU presentations, was that 10% earnings growth should be a slam dunk for the next 3 years, ceterus parabus Trumpus! With Sim and Arno retiring next year, that “paint by numbers” growth stability will be helluva reassuring for the next CEO, whoever that might be. And to be naughty, my money’s on the head of PPB!

FNB New CEO Announcement and Restructuring

One woman running PPB that is not a potential CEO is Lytania Johnson, who takes over the reins at FNB today! Congratulations to her! She is taking over the dominant retail and commercial banking franchise in South Africa. It is a big deal! In terms of scale and complexity, it is arguably much more difficult than running parent FirstRand itself (the accountants at the top of the food chain get to allocate capital across the franchises and demand that the underling CEOs deliver revenue growth in excess of cost growth — simple stuff really). Given her low public profile, it will be interesting to see how she approaches the role; visionary, orchestrator, hands-off entrepreneur or something else? In his 10 very successful years in charge, there was never a discernible strategy under the entrepreneurial Michael Jordaan. His mantra of “good to Great, No 1 in 3 years”, was not a strategy, but an ambitious target, and he stood out the way and let competent BU CEOs get on with it. It was pure Founder philosophy. Jacques’ tenure introduced visionary “ecosystem” thinking that necessitated coordination across previously dispersed BUs. This was largely successful, but faced significant headwinds in incompatible systems and processes. IBMs’ Hogan mainframe provided fantastic reliability, but ultimately even a really smart API overlay couldn’t provide enough flexibility for most, to get things done. And a lot of BS got fed up the line! (The implementation of FinXact rails would mitigate this). Harry was brought in to settle and simplify the organization after a frenetic period. A few months from now and outsiders should get a sense of Lytania’s style.

The restructuring is very interesting. The lagging actors, ABSA and Nedbank, have just separated out Business and Retail, and FNB has now gone countertrend (I imagine a few of the Execs at the red and green banks having a mild panic attack and thinking they had it right all along). Bringing the lower end of Commercial (esp SMEs) and entry-level- to middle-income Retail together has distinct pros and cons. If the intent is to enjoy the scale benefits of two volume businesses, then Bakgat, great idea. If it is to provide sufficient profit heft (by itself Personal Banking would have only been about a R3b earnings business) then it is a kak idea as it risks compromising the nuances and complexity of responding to even simple entry level business requirements. And this SME business has been fantastically successful. Taking bigger companies and public sector banking and putting them into the Corporate banking sphere is great for that Segment, but its existence at all is probably not helpful to RMB. In Africa, RMB experiences an extra degree of separation from customer by virtue of brand difference alone. In South Africa, it is faced with an extra degree of separation from SA Corporates which constitute the bread-and-butter of its CIB peer group. Having four R10b-ish earnings companies is numerically elegant, but not necessarily customer centric.

Motonovo: The Gift That Keeps on Giving

A few months ago, and for different reasons, that odious but successful Magda Wierzycka, together with Jonathan Oppenheimer made the comment that the UK was uninvestable. FirstRand must be feeling that in their bones today with the UK Financial Conduct Authority finalizing the redress scheme for industry misconduct in financing vehicle purchases. Simply, the settlement amount is GBP7.5b, or GBP9.1b inclusive of legal costs. The back of the matchbox on this one:

ZAR redress is between R167b and R203b
Motonovo has an estimated 10% market share (read liability)
That equates to R16b–R20b
Provision has already been made for just over R6b
So it looks like they are going to take a R10b+ hit

This is huge, but in relative terms a quarter’s earnings. It must be especially galling for FirstRand — if there is one thing I know emphatically, it is just how seriously and proactively FirstRand takes governance and regulatory regimes. It is likely they will pay out more than Motonovo ever made in profits. As an individual I would be tempted to wave my middle finger and liquidate the Motonovo shop. But with Aldermore, other offshore interests and brand reputation at stake they don’t have the liberties that an individual has. Wat ‘n gemors!