Standard Bank Group revealed that it plans to cut head office and branch space by as much as a quarter by 2025. This will see the banking group’s cost-to-income ratio “approaching 50%” from the 58.2% last year (and 58.3% in the first half of this year). In 2019, the bank shut around 100 branches across the country. While that was the main driver in cutting its branch floor space from around 360 000m2 to 294 000m2 by end-June 2021, it has continued to reduce space since those closures. The bank speaks about a “distribution reset” where 80% of transactions in branch have been digitised, allowing it to shift the focus of staff from service to sales. It has lowered distribution costs by over R1 billion.
Compared to the first half of last year, South Africa branch volumes have declined 39% in line with the group’s “strategy to drive our clients to our digital channels and de-cash our branches, where possible”. It will leverage retail distribution partnerships, like the just-announced deal to open mini branches in select Pick n Pay stores, which bring lower set-up and running costs and will give it access to a new client base. The banking group also uses Pep and Spar for its Instant Money cash-send product. Key to this ambitious target of adding more than five million customers will be its low-cost MyMo digital bank account as well as its Instant Money remittance product. It currently has 2.1 million unique Instant Money senders and more than one million MyMo account clients. Clients in its African regions will grow by 1.9 times, or to 10 million.