Q2 2026 Standard Bank Group Ltd Earnings Call

August 13, 2026

Speaker #1: Good morning. On behalf of the Board and management of Standard Bank Group, thank you for joining us for the presentation of our financial results for the first half of 2026.

Sim Tshabalala: Good morning. On behalf of the board and management of the Standard Bank Group, thank you for joining us for the presentation of our financial results for the H1 2026. I will begin with a brief discussion of the good and steady progress that we have made during the H1 towards our financial and strategic targets. Starting with the overall investment case. As the graph on the left of the slide shows, sub-Saharan Africa is now consistently the fastest-growing major region in the world. Africa's growth rate is expected to dip far less than that of other emerging markets in response to the war in the Middle East. It is also expected to recover far more quickly and strongly than other regions. The map in the middle of the slide illustrates our geographic footprint across Africa. We have on-the-ground businesses in all the major African economies.

Speaker #1: I will begin with a brief discussion of the good and steady progress that we have made during the first half toward our financial and strategic targets.

Speaker #1: Starting with the overall investment case, as the graph on the left of the slide shows, sub-Saharan Africa is now consistently the fastest-growing major region in the world.

Speaker #1: Africa's growth rate is expected to dip far less than that of other emerging markets in response to the war in the Middle East. It is also expected to recover far more quickly and strongly than other regions.

Speaker #1: The map in the middle of the slide illustrates our geographic footprint across Africa. We have on-the-ground businesses in all the major African economies.

Speaker #1: Eighty percent of sub-Saharan Africa's GDP is generated in the countries where we operate. We remain consistently the largest and most capable financial services business in the region.

Sim Tshabalala: 80% of sub-Saharan Africa's GDP is generated in the countries where we operate. We remain consistently the largest and most capable financial services business in the region. We have 20 million active customers. Based on assets, we are the largest financial services group in Africa. We also have businesses in all the major global financial centers, linking Africa's economies to the wider world. On the right of the slide are four structural themes which create our opportunities. As we highlighted at our Capital Markets Day this past March, as we said then, we set our medium-term opportunities as shaped by Africa's rapid and steady growth and highly favorable demographics, Africa's large infrastructure needs, the continent's growing and diversified trade and capital flows, and developments in financial services markets, largely driven by rapid technological change.

Speaker #1: We have 20 million active customers. Based on assets, we are the largest financial services group in Africa. We also have businesses in all the major global financial centers, linking Africa's economies to the wider world.

Speaker #1: On the right of the slide are four structural themes which create our opportunities. As we highlighted at our Capital Markets Day this past March, as we said then, we set our medium-term opportunities as shaped by Africa's rapid and steady growth and highly favorable demographics.

Speaker #1: Africa's large infrastructure needs, the continent's growing and diversified trade and capital flows, and developments in financial services markets—largely driven by rapid technological change.

Speaker #1: In the first half, our world-diversified African portfolio continued to provide steady growth in an otherwise unsteady world. Starting on the left of the slide, we show that, for the first half, 51% of our headline earnings were generated in South Africa, 40% were generated in Africa beyond South Africa, and 9% in our offshore businesses.

Sim Tshabalala: In the H1, our well-diversified African portfolio continued to provide steady growth in an otherwise unsteady world. Starting on the left of the slide, we show that for the H1, 51% of our headline earnings were generated in South Africa, 40% were generated in Africa beyond South Africa, and 9% in our offshore businesses as well as ICBC Standard Bank. As illustrated in the middle panel, this well-diversified portfolio has enabled us to grow our earnings consistently over the last six periods, despite volatile macroeconomic conditions. At 19.8%, our group return on equity is now in a structurally higher range than five years ago. Since the beginning of 2021, Standard Bank Group has delivered total shareholder returns of 17% per year, better than our peers by two percentage points. Over this half, we added another ZAR 8.4 billion in shareholder value.

Speaker #1: As well as ICBCS. As illustrated in the middle panel, this world-diversified portfolio has enabled us to grow our earnings consistently over the last six periods, despite volatile macroeconomic conditions.

Speaker #1: At 19.8%, our group return on equity is now in a structurally higher range than five years ago. Since the beginning of 2021, Standard Bank Group has delivered total shareholder returns of 17% per year, better than our peers by 2 percentage points.

Speaker #1: Over this half, we added another R8.4 billion in shareholder value. The growth in our SVA, as reflected in the previous slide, is the outcome of the systematic execution of our strategy.

Sim Tshabalala: The growth in our SVA reflected in the previous slide is the outcome of the systematic execution of our strategy. Starting on the left, we focused on serving our clients as one Standard Bank Group, providing a comprehensive range of financial services with minimum friction. This client-led approach to growth was reflected in a larger and more active client base, and good growth in capital-light revenues, including very pleasing growth in revenues from value-added services such as Instant Money and online vouchers, which grew by 50%. We originated loans in support of our corporate clients and provided foreign exchange, fixed income risk management, and financing solutions to assist clients in managing the increased market volatility observed over the half. We remain committed to supporting our clients in achieving their sustainability goals. In the H1 2026, the group mobilized ZAR 51 billion in sustainable finance.

Speaker #1: Starting on the left, we focused on serving our clients as one Standard Bank Group, providing a comprehensive range of financial services with minimum friction.

Speaker #1: This client-led approach to growth was reflected in a larger and more active client base, and good growth in capital-like revenues, including very pleasing growth in revenues from value-added services, such as Instant Money and online vouchers, which grew by 50%.

Speaker #1: We originated loans in support of our corporate clients and provided foreign exchange, fixed-income risk management, and financing solutions to assist clients in managing the increased market volatility observed over the half.

Speaker #1: We remained committed to supporting our clients in achieving their sustainability goals. In the first half of 2026, the group mobilized R51 billion in sustainable finance.

Speaker #1: We have cumulatively mobilized over R328 billion in sustainable finance against our target of R450 billion by 2028. Our cost control remained highly effective over the half, and we have now achieved 10 consecutive halves—10 consecutive halves of positive jaws.

Sim Tshabalala: We have cumulatively mobilized over ZAR 328 billion in sustainable finance against our target of ZAR 450 billion by 2028. Our cost control remained highly effective over the H1, and we have now achieved 10 consecutive halves of positive Jaws. We continue to invest both in people and in digital technology. One of the main themes in the global conversation over the H1 was, of course, artificial intelligence. Our approach is to invest where AI can improve client experience or internal efficiency. I will say a little bit more about this on the next slide. Risks were well managed, with our credit loss ratio improving to the bottom of our through-the-cycle range. Lastly, on the right, our capital allocation approach over the H1.

Speaker #1: We continue to invest both in people and in digital technology. One of the main themes in the global conversation over the half was, of course, artificial intelligence.

Speaker #1: Our approach is to invest where AI can improve client experience or internal efficiency. I'll say a little bit more about this on the next slide.

Speaker #1: Risks were well managed, with our credit loss ratio improving to the bottom of our through-the-cycle range. Lastly, on the right, our capital allocation approach over the half: first and most importantly, we allocated more capital to support our clients, and we declared R15 billion worth in dividends while maintaining our very strong balance sheet and delivering our highest ROE of the post-Basel III era.

Sim Tshabalala: First, and most importantly, we allocated more capital to support our clients, and we declared ZAR 15 billion worth in dividends while maintaining our very strong balance sheet and delivering our highest ROE of the post-Basel III era. We continue to increase our holdings in Africa regions wherever that is appropriate, and we remain on the lookout for attractive and well-priced opportunities. It is worth saying, however, that as the largest African financial services network, we can afford to be patient, careful, and highly selective. You may recall from our Capital Markets Day that technology, AI, and payments are key pillars of our growth. First, our technology platform. This is the foundation which enables us to scale artificial intelligence and payments. For every rand that we spend on technology, we now generate 7.3 times that in revenue. 78% of our migratable compute is now on cloud.

Speaker #1: We continue to increase our holdings in Africa regions wherever that is appropriate. And we remain on the lookout for attractive and well-priced opportunities. It is worth saying, however, that as the largest African financial services network, we can afford to be patient, careful, and highly selective.

Speaker #1: You may recall from our Capital Markets Day that technology, AI, and payments are key pillars of our growth. First, our technology platform—this is the foundation which enables us to scale artificial intelligence and payments.

Speaker #1: For every rand that we spend on technology, we now generate 7.3 times that in revenue. Seventy-eight percent of our migratable compute is now on cloud.

Speaker #1: Turning to artificial intelligence itself, during the first half we continued to scale the deployment of AI. In addition to the productivity tools that are available to our employees, we have also built our group-wide AI platform on Amazon Bedrock to scale our client-facing use cases.

Sim Tshabalala: Turning to artificial intelligence itself. During the H1, we continued to scale the deployment of AI. In addition to the productivity tools that are available to our employees, we have also built our group wide AI platform on Amazon Bedrock to scale our client-facing use cases. This provides a shared, secure foundation to scale AI right across the group. Using this platform, we are accelerating delivery of AI use cases in four areas: relationship management, servicing payments, and lending. More than 39,000 of our employees are active users of generative AI tools, and our AI maturity was recently recognized by the inaugural Evident AI Index for banks, which ranked us first in Africa. AI is transforming our world and our industry. However, we are aware that we need to avoid over-promising or investing in unnecessary expensive technology.

Speaker #1: This provides a shared, secure foundation to scale AI right across the group. Using this platform, we are accelerating delivery of AI use cases in four areas: relationship management, servicing, payments, and lending.

Speaker #1: More than 39,000 of our employees are active users of generative AI tools, and our AI maturity was recently recognized by the inaugural Evident AI Index for Banks, which ranked us first in Africa.

Speaker #1: AI is transforming our world and our industry. However, we're aware that we need to avoid overpromising or investing in unnecessarily expensive technology. We believe that our decision to scale AI is the right one, but we are doing so in a thoughtful and disciplined manner.

Sim Tshabalala: We believe that our decision to scale AI is the right one, but we are doing so in a thoughtful and disciplined manner. Finally, payments, where we have a scale advantage. The payments franchise continued to deliver capital-light revenue growth while supporting a growing deposit base. In the H1, the group processed ZAR 88 trillion in payments, reinforcing Standard Bank's position as the largest transactional franchise on the continent by payment value. We continue to invest in payment rails that we know clients want. We made good progress against the three priorities that we set in March. First, domestic payments. Electronic payment values grew 11% on the same period last year. Second, cross-border payments. Our market share across our footprint has grown to 19% from 17% in 2025. Third, digital assets. We continue to make good progress across stablecoins, tokenized deposits, and custody.

Speaker #1: And finally, payments, where we have a scale advantage. The payments franchise continued to deliver capital-like revenue growth while supporting a growing deposit base. In the first half, the group processed R88 trillion in payments.

Speaker #1: Reinforcing Standard Bank's position as the largest transactional franchise on the continent by payment value, we continue to invest in payment rails that we know clients want.

Speaker #1: We made good progress against the three priorities that we set in March. First, in domestic payments, electronic payment values grew 11% on the same period last year.

Speaker #1: Second, cross-border payments: our market share across our footprint has grown to 19%, from 17% in 2025. Third, digital assets: we continue to make good progress across stablecoins, tokenized deposits, and custody.

Speaker #1: These three pillars underpinned the good performance in the first half. In summary, we have made very good strategic progress in the first six months of the year.

Sim Tshabalala: These three pillars underpinned the good performance in the H1. In summary, we have made very good strategic progress in the first 6 months of the year. Our focus on developing and delivering client-led growth, supported by robust risk management and disciplined capital allocation, combined with continued investment in people, systems, and capabilities, gives us a great deal of confidence for the rest of 2026. I will now hand you over to Arno to take you through the results in detail. Arno?

Speaker #1: Our focus on developing and delivering client-led growth, supported by robust risk management and disciplined capital allocation, combined with continued investment in people, systems, and capabilities, gives us a great deal of confidence for the rest of 2026.

Speaker #1: I'll now hand you over to Arno to take you through the results in detail.

Speaker #2: Thank you, Sam. The group's first-half results for 2026 demonstrate the resilience of our diversified portfolio and show good progress against the 2028 commitments we set out at our Capital Markets Day in March.

Arno Daehnke: Thank you, Sim. The group's H1 results for 2026 demonstrate the resilience of our diversified portfolio and show good progress against the 2028 commitments we set out at our Capital Markets Day in March. Standard Bank Group delivered another record performance in the H1 of 2026. Group headline earnings increased by 10% to ZAR 26.1 billion. Headline earnings per share and dividends per share also increased by 10%. In this set of results, the rand was stronger than we had anticipated, and this had a dilutive impact on earnings translated into rands. In constant currency terms, group earnings growth was 3% stronger than our recorded 10% rand growth. Return on equity improved to a pleasing 19.8% from 19.1% in the prior period. The group's CET1 ratio strengthened to 13.6%, providing resilience and flexibility to support growth and distributions.

Speaker #2: Standard Bank Group delivered another record performance in the first half of 2026. Group headline earnings increased by 10% to R26.1 billion. Headline earnings per share and dividends per share also increased by 10%.

Speaker #2: In this set of results, the rand was stronger than we had anticipated, and this had a dilutive impact on earnings translated into rands. In consequence terms, group earnings growth was 3% stronger than our recorded 10% rand growth.

Speaker #2: Return on equity improved to a pleasing 19.8%, from 19.1% in the prior period. The Group's common equity tier 1 ratio strengthened to 13.6%, providing resilience and flexibility to support growth and distributions.

Speaker #2: Within banking, the cost to income ratio improved to 49.3%, supported by a positive jaws of 44 basis points. The credit loss ratio improved to 73 basis points, and that is from 93 basis points, from last year.

Arno Daehnke: Within banking, the cost-to-income ratio improved to 49.3%, supported by positive jaws of 44 basis points. The credit loss ratio improved to 73 basis points, and that is from 93 basis points from last year. Overall, we have delivered good top-line growth, improved credit performance, higher earnings, and higher returns, and maintained a strong capital position, all while continuing to invest for sustainable growth. Running through the group's income statement on slide 10, we see net interest income increased by 4% and non-interest revenue increased by 7%. This resulted in a 5% increase at a total income level. Operating expenses increased at a similar 5%, resulting in pre-provision profits growth of 5% for banking activities. Credit and payment charges decreased by 12%, reflecting improved credit performance across all banking portfolios. Banking headline earnings increased by 9% to ZAR 23 billion.

Speaker #2: Overall, we have delivered good top-line growth, improved credit performance, higher earnings, and higher returns, and maintained a strong capital position—all while continuing to invest for sustainable growth.

Speaker #2: Running through the group's income statement on slide 10, we see net interest income increased by 4%, and non-interest revenue increased by 7%. This resulted in a 5% increase at a total income level.

Speaker #2: Operating expenses increased at a similar 5%, resulting in pre-provision profit growth of 5% for banking activities. Credit and payment charges decreased by 12%, reflecting improved credit performance across all banking portfolios.

Speaker #2: Banking headline earnings increased by 9% to R23 billion. Insurance and asset management headline earnings increased by a strong 15%, supported by favorable persistency and risk experience, as well as revenue growth in asset management.

Arno Daehnke: Insurance and asset management headline earnings increased by a strong 15%, supported by favorable persistency and risk experience, and revenue growth in asset management. The contribution from our investment in ICBCS increased to ZAR 1 billion, driven by strong client activity in precious metals. Taken together, group headline earnings increased by 10% to ZAR 26.1 billion. I will now turn to analysis of the banking businesses, starting with the balance sheet. Gross loans and advances to customers at period end increased by 5% to ZAR 1.6 trillion. Corporate lending increased by 8%, supported by good origination across energy, diversified industries, telecommunications, and media sectors. Retail and business lending have shown good origination momentum in South Africa in the last 6 months, but loan growth has been slower than we had anticipated.

Speaker #2: The contribution from our investment in ICBCS increased to R1 billion, driven by strong client activity in precious metals. Taken together, group headline earnings increased by 10% to R26.1 billion.

Speaker #2: I will now turn to analysis of the banking businesses, starting with the balance sheet. Gross loans and advances to customers at period end increased by 5% to R1.6 trillion.

Speaker #2: Corporate lending increased by 8%, supported by good origination across the energy, diversified industries, telecommunications, and media sectors. Retail and business lending have shown good origination momentum in South Africa in the last six months, but loan growth has been slower than we had anticipated.

Speaker #2: Home services sustained 1% growth, with strong registrations having translated into modest net book growth due to repayments on this large portfolio. We are encouraged by the 13% loan growth in Africa Regions in constant currency.

Arno Daehnke: Home services sustained 1% growth, where strong registrations have translated into modest net book growth due to repayments on this large portfolio. We are encouraged by the 13% loan growth in Africa regions in constant currency. This slide provides further evidence of positive origination momentum in targeted portfolios. Corporate and Investment Banking origination across the continent increased by 21% to ZAR 146 billion. In South Africa, business lending origination increased by 27% to ZAR 21 billion. Home services new registrations increased by 17% to almost ZAR 27 billion, reflecting our continued market-leading position where we finance one in three homes in South Africa. Personal unsecured loan disbursements declined by 8%, indicating our continued disciplined approach to risk and affordability. Vehicle and asset finance in BCB increased payouts by 8%, and PPB vehicle and asset finance in South Africa increased by 20%, reflecting targeted growth aligned to our primary client strategy.

Speaker #2: This slide provides further evidence of positive origination momentum in targeted portfolios. Corporate and Investment Banking origination across the continent increased by 21% to R146 billion.

Speaker #2: In South Africa, business lending origination increased by 27% to R21 billion. Home services new registrations increased by 17% to almost R27 billion, reflecting our continued market-leading position, where we finance 1 in 3 homes in South Africa.

Speaker #2: Personal unsecured loan disbursements declined by 8%, indicating our continued disciplined approach to risk and affordability. Vehicle and asset finance in BCB increased payouts by 8%, and PPB vehicle and asset finance in South Africa increased by 20%, reflecting targeted growth aligned to our primary client strategy.

Speaker #2: Overall, our targeted growth strategies are delivering within our risk and return criteria. Deposits increased by 11% to R2.5 trillion, and by 14% in constant currency.

Arno Daehnke: Overall, our targeted growth strategies are delivering within our risk and return criteria. Deposits increased by 11% to ZAR 2.5 trillion and 14% in constant currency. Growth was broad-based. Core deposits increased by 13%, current and savings accounts by 12%, term deposits by 7%, and cash management deposits by 5%. CIB deposits grew strongly in support of lending activity. Regionally, SBSA deposits increased by 13%, while Africa regions increased by 22% in constant currency. Strong growth in low-cost transactional balances reflects the depth of our client relationships and supports both funding and resilience and sustainable revenue growth. Although not reflected in deposit balances, it is worth noting that the group issued First Loss Absorbing Capital instruments to the value of ZAR 16.5 billion. This new class of unsecured subordinated debt is an important step forward in systemically important banks protecting public funds during a crisis.

Speaker #2: Growth was broad-based: core deposits increased by 13%, current and savings accounts by 12%, term deposits by 7%, and cash management deposits by 5%. CIB deposits grew strongly, in support of lending activity. Regionally, SBSA deposits increased by 13%, while Africa Regions increased by 22% in constant currency.

Speaker #2: Strong growth in low-cost transactional balances reflects the depth of our client relationships and supports both funding resilience and sustainable revenue growth. Although not reflected in deposit balances, it is worth noting that the group issued first-loss after capital instruments to the value of R16.5 billion. This new class of unsecured subordinated debt is an important step forward in systemically important banks protecting public funds during a crisis.

Speaker #2: Net interest income increased by 4% to R53.2 billion. Average interest-earning assets increased by 7%, which contributed an incremental R3.7 billion to net interest income.

Arno Daehnke: Net interest income increased by 4% to ZAR 53.2 billion. Average interest earning assets increased by 7%, which contributed an incremental ZAR 3.7 billion to net interest income. Net interest margin declined by 17 basis points to 472 basis points. The benefit of stronger growth in higher margin Africa regions was offset by tighter corporate lending spreads and ongoing competition for wholesale deposits. The gross negative endowment impact across our markets was ZAR 2.9 billion for the six months or 26 basis points. This was partially offset by a 13 basis point hedge benefit from hedging strategies. The net endowment impact of ZAR 1.4 billion is largely skewed towards Africa regions in this period, with an impact of over ZAR 1 billion for this region, and Ghana alone comprising over half of this impact.

Speaker #2: Net interest margin declined by 17 basis points to 472 basis points. The benefit of stronger growth in higher-margin Africa regions was offset by tighter corporate lending spreads and ongoing competition for wholesale deposits.

Speaker #2: The gross negative endowment impact across our markets was R2.9 billion for the six months, or 26 basis points. This was partially offset by a 13 basis point hedge benefit from hedging strategies.

Speaker #2: The net endowment impact of R1.4 billion is largely skewed towards Africa regions in this period, with an impact of over R1 billion for this region, and Ghana alone comprising over half of this impact.

Speaker #2: This is evident in the large Africa Regions margin squeeze of 64 basis points to 7.2% now. Non-interest revenue increased by 7% to R33.4 billion, and has delivered a 5-year compound annual growth rate of 10%.

Arno Daehnke: This is evident in the large Africa regions margin squeeze of 64 basis points to 7.2% now. Non-interest revenue increased by 7% to ZAR 33.4 billion and has delivered a five-year compound annual growth rate of 10%. Within this, net fee and commission revenue increased by 7%, trading revenue by 8%, insurance attribution by 1%, and other revenue by 4%. Before unpacking fees and trading in more detail, it is worth noting that the 1% growth in attributed revenue from insurance was dampened by higher claims. Gross written premiums from funeral and simple life sales grew by a strong 13%. Good non-interest revenue growth demonstrates that the group continues to generate capital-like revenue from higher client activity, payments, market trading activities, and other financial services. As shown on the previous slide, net fee and commission revenue increased by 7% to ZAR 18.4 billion.

Speaker #2: Within this, net fee and commission revenue increased by 7%, trading revenue by 8%, insurance attribution by 1%, and other revenue by 4%. Before unpacking fees and trading in more detail, it is worth noting that the 1% growth in attributed revenue from insurance was dampened by higher claims. Gross written premiums from funeral and simple life sales grew by a strong 13%.

Speaker #2: Good non-interest revenue growth demonstrates that the group continues to generate capital-like revenue from higher client activity, payments, market trading activities, and other financial services.

Speaker #2: As shown on the previous slide, net fee and commission revenue increased by 7% to R18.4 billion. The largest component of transactional fees increased by 1%.

Arno Daehnke: The largest component of transactional fees increased by 1%. Continued higher activity and client engagement in South Africa was offset in this period by fee pricing adjustments in Africa regions. Card fees increased by 7%, supported by higher interchange volumes from retail and corporate clients. Arrangement, guarantee, and knowledge-based fees increased by 8%, reflecting increased structured product activity in global markets and stronger deal origination in energy, infrastructure, and real estate sectors. Pleasingly, net fee income growth in PPB South Africa was a strong 11%, supported in part by a 50% growth in value-added services revenues. Trading revenue increased by 8% to ZAR 12.8 billion or a strong 12% in constant currency, and as you can see here, has delivered a five-year compound annual growth rate of 13%.

Speaker #2: Continued higher activity and client engagement in South Africa was offset in this period by fee pricing adjustments in Africa Regions. Hard fees increased by 7%, supported by higher interchange volumes from retail and corporate clients.

Speaker #2: Arrangement, guarantee, and knowledge-based fees increased by 8%, reflecting increased structured product activity in global markets and stronger deal origination in the energy, infrastructure, and real estate sectors.

Speaker #2: Pleasingly, net fee income growth in PPB South Africa was a strong 11%, supported in part by a 50% growth in value-added services revenues. Trading revenue increased by 8% to R12.8 billion, or a strong 12% in constant currency.

Speaker #2: And as you can see here, it has delivered a five-year compound annual growth rate of 13%. Fixed income and currencies revenue increased as stronger client activity, market fluctuations, and positive investor sentiment created trading opportunities and increased demand for foreign exchange solutions.

Arno Daehnke: Fixed income and currencies revenue increased as stronger client activity, market fluctuations, and positive investor sentiment created trading opportunities and increased demand for foreign exchange solutions. In line with prior periods, approximately 80% of global markets revenue is client franchise related. It is worth noting that in the Q2 2026, no loss days were noted in global markets. This clearly reinforces the quality and client-led nature of this revenue base. Let us turn to credit provisions, starting with the balance sheet. Gross loans and advances increased by 7%, while provisions decreased by 6%. This resulted in a lower but robust total coverage ratio of 3.6%. Stage 3 loans, or NPLs, decreased in both rand value and as a percentage of the book to 5.6%, and coverage ratios were maintained at 50% on the non-performing loan book.

Speaker #2: In line with prior periods, approximately 80% of global markets revenue is client franchise related. It is worth noting that, in the second quarter of 2026, no loss days were noted in Global Markets. This clearly reinforces the quality and client-led nature of this revenue base.

Speaker #2: Let us turn to credit provisions, starting with the balance sheet. Gross loans and advances increased by 7%, while provisions decreased by 6%. This resulted in a lower, but robust, total coverage ratio of 3.6%.

Speaker #2: Stage III loans, or NPLs, decreased in both rand value and as a percentage of the book to 5.6%. Coverage ratios were maintained at 50% on the non-performing loan book.

Speaker #2: The income statement chart for credit and payments decreased by 12% to R7.1 billion, and the group credit loss ratio improved to 73 basis points from 93 basis points this time last year.

Arno Daehnke: The income statement charge for credit impairments decreased by 12% to ZAR 7.1 billion. The group credit loss ratio improved to 73 basis points from 93 basis points this time last year. BCB charges decreased by 30%, driven by a significant decline in Africa regions and offshore, linked to strengthened non-performing loan management and enhanced collections. PPB charges decreased by 2%, supported by improved collections and early intervention strategies. CIB charges decreased by 52% due to lower NPLs as well as post-write-off recoveries. The improvement across all major loan portfolios reflects effective risk management, improved collections, and a generally supportive macroeconomic environment. Credit loss ratios accordingly improved across the board. On slide 21, we provide an analysis of credit trends in SBSA across four products. So that is our South African business. Our South African retail clients are, of course, negatively impacted by recent higher inflation and interest rates.

Speaker #2: BCB charges decreased by 30%, driven by a significant decline in Africa regions and offshore, linked to strengthened non-performing loan management and enhanced collections. PPB charges decreased by 2%, supported by improved collections and early intervention strategies.

Speaker #2: CIB charges decreased by 52% due to lower NPLs as well as post write-off recoveries. The improvement across all major loan portfolios reflects effective risk management, improved collections, and a generally supportive macroeconomic environment.

Speaker #2: Credit loss ratios, accordingly, improved across the board. On slide 21, we provide an analysis of credit trends in SBSA across four products. So that's our South African business.

Speaker #2: Our South African retail clients are, of course, negatively impacted by recent higher inflation and interest rates, but so far, income and employment have been resilient.

Arno Daehnke: But so far, their income and employment have been resilient. Debt-to-income ratios have decreased relative to historical levels, and repayment behaviors have strengthened. In our assessment, consumer health overall is trending towards gradual improvement and resilience, supported by an easing rate cycle and a housing recovery. Across the portfolio shown on this slide, the credit loss ratio has improved. Effective non-performing loan management strategies are bearing fruit, with flows into non-performing loans slowing. A change in NPL management in card has reduced debt sales. This has been effective from a recovery perspective, but has resulted in NPLs remaining on our books for longer, and hence a higher NPL ratio, as you can see on this slide. Operating expenses increased by 5% to ZAR 42.7 billion, or 6% in constant currency.

Speaker #2: Debt-to-income ratios have decreased relative to historical levels, and repayment behaviors have strengthened. In our assessment, consumer health overall is trending toward gradual improvement and resilience, supported by an easing rate cycle and a housing recovery.

Speaker #2: Across the portfolio shown on this slide, the credit loss ratio has improved. Effective non-performing loan management strategies are bearing fruit, with flows into non-performing loans slowing.

Speaker #2: A change in NPL management in Card has reduced debt sales. This has been effective from a recovery perspective but has resulted in NPLs remaining on our books for longer, and hence a higher NPL ratio, as you can see on the slide.

Speaker #2: Operating expenses increased by 5% to R42.7 billion, or 6% in constant currency. Within this, staff costs increased by 6%, following annual salary adjustments, continued investment in specialist capabilities, and the expansion of client-facing teams.

Arno Daehnke: Within this, staff costs increased by 6%, following annual salary adjustments, continued investment in specialist capabilities, and an expansion of client-facing teams. Software, cloud, and technology-related costs increased by 6%, reflecting the continued modernization of our banking platforms and the expansion of our artificial intelligence capabilities to improve client experience, cybersecurity, and operating efficiency. Other expenses increased by 3%, driven by brand investment, targeted client campaigns, strategic sponsorships, as well as higher professional fees. A total view of IT spend, and this includes IT staff costs, totals ZAR 11.8 billion and shows a 2% increase in the period and a 5% annual increase over five years. Increased expenditure on IT staff and software, cloud and technology were largely offset by the lower amortization charge. Over the five-year period, amortization expenses decreased by 8% per annum as previously capitalized projects roll off and systems and platforms move to the cloud.

Speaker #2: Software, cloud, and technology-related costs increased by 6%, reflecting the continued modernization of our banking platforms and the expansion of our artificial intelligence capabilities to improve client experience, cybersecurity, and operating efficiency.

Speaker #2: Other expenses increased by 3%, driven by brand investment, targeted client campaigns, strategic sponsorships, as well as higher professional fees. A total view of IT spend, and this includes IT staff costs, totals R11.8 billion, and shows a 2% increase in the period, and a 5% annual increase over 5 years.

Speaker #2: Increased expenditure on IT staff and software, cloud, and technology were largely offset by the lower amortization charge. Over the five-year period, amortization expenses decreased by 8% per annum, as previously capitalized projects roll off and systems and platforms move to the cloud.

Speaker #2: This slide illustrates the 10 consecutive reporting periods of positive jaws referred to by Sim earlier. In the first six months of 2026, revenue growth again exceeded cost growth, resulting in positive jaws of 44 basis points.

Arno Daehnke: This slide illustrates the 10 consecutive reporting periods of positive Jaws referred to by Sim earlier. In the first six months of 2026, revenue growth again exceeded cost growth, resulting in positive Jaws of 44 basis points. The banking cost-to-income ratio improved to 49.3%. This sustained improvement in the cost-to-income ratio demonstrates the benefits of scale, digital adoption, and productivity initiatives. Over this period, we have continued to strategically invest in the franchise while preserving positive operating leverage. That concludes the banking review, and I will now turn to Insurance and Asset Management. Our Insurance and Asset Management business continues to build momentum. In South Africa, short-term insurance sales increased by 17%, and underwriting margins were maintained well above our 10% target levels. Open market index premiums related to products sold outside of banking channels increased by 15%, and funeral and Flexible Life Plan gross written premiums increased by 13%.

Speaker #2: The banking cost-to-income ratio improved to 49.3%. This sustained improvement in the cost-to-income ratio demonstrates the benefits of scale, digital adoption, and productivity initiatives. Over this period, we have continued to strategically invest in the franchise, while preserving positive operating leverage.

Speaker #2: That concludes the banking review, and I will now turn to insurance and asset management. Our insurance and asset management business continues to build momentum.

Speaker #2: In South Africa, short-term insurance sales increased by 17%, and underwriting margins were maintained well above our 10% target levels. Open market indexed premiums related to products sold outside of banking channels increased by 15%, and funeral and Flexi-Life gross written premiums increased by 13%.

Speaker #2: Assets under management and administration increased to R1.8 trillion. South Africa increased by 13%, while Africa Regions and Offshore grew by a strong 23%.

Arno Daehnke: Assets under management and administration increased to ZAR 1.8 trillion. South Africa increased by 13%, while Africa regions and offshore increased by a strong 23%. On the back of these strong business outcomes, Insurance and Asset Management headline earnings increased by 15% to ZAR 2.1 billion. The ROE improved to a very pleasing 21.1%. Insurance operations increased earnings by 10%, with South Africa up 7%, primarily driven by favorable persistency and risk experience in retail and corporate life businesses. Asset management operations earnings increased by 35% to ZAR 660 million. South Africa increased by 18%, benefiting from a higher asset base linked to favorable markets. Africa regions and offshore increased by 47%, driven by strong performance in our Nigerian pension fund business. Total operating earnings increased by 18% to ZAR 3.4 billion.

Speaker #2: On the back of these strong business outcomes, Insurance and Asset Management headline earnings increased by 15% to R2.1 billion, and the ROE improved to a very pleasing 21.1%.

Speaker #2: Insurance operations increased earnings by 10%, with South Africa up 7%, primarily driven by favorable persistency and risk experience in retail and corporate life businesses.

Speaker #2: Asset management operations earnings increased by 35% to 660 million rand. South Africa increased by 18%, benefiting from a higher asset base linked to favorable markets.

Speaker #2: Africa Regions and Offshore increased by 47%, driven by a strong performance in our Nigerian pension fund business. Total operating earnings increased by 18% to R3.4 billion.

Speaker #2: The shareholder portfolio recorded a loss of R104 million, and this compares with a profit of R120 million in the prior period. Overall, IAM delivered strong earnings growth and improved returns, reinforcing the strategic value of the group's integrated financial services model.

Arno Daehnke: The shareholder portfolio recorded a loss of ZAR 104 million, and this compares with a profit of ZAR 120 million in the prior period. Overall, IAM delivered strong earnings growth and improved returns, reinforcing the strategic value of the group's integrated financial services model. I will now turn to the group's capital position, capital allocation, as well as shareholder returns. At the end of June, the group's Common Equity Tier 1 capital increased to ZAR 264 billion, and the Common Equity Tier 1 ratio increased to 13.6%. We continue to think about capital in three broad components. First, ZAR 185 billion represents capital backing risk-weighted asset growth and supports organic client growth. This represents a CET1 ratio of 9.5%. Second, a further ZAR 58 billion of Tier 1 capital provides a buffer for macroeconomic uncertainty and protects the group against downside risks. This takes the ratio to 12.5%.

Speaker #2: I will now turn to the group's capital position, capital allocation, as well as shareholder returns. At the end of June, the group's Common Equity Tier 1 capital increased to R264 billion, and the Common Equity Tier 1 ratio increased to 13.6%.

Speaker #2: We continue to think about capital in three broad components. First, R185 billion represents capital backing risk-weighted asset growth and supports organic client growth.

Speaker #2: This represents a CET1 ratio of 9.5%. Second, a further R58 billion of Tier 1 capital provides a buffer for macroeconomic uncertainty and protects the group against downside risks.

Speaker #2: And this takes the ratio to 12.5%. Thirdly, we currently have R21 billion available for investments in acquisitions and partnerships, dividends, as well as share buybacks.

Arno Daehnke: Thirdly, we currently have ZAR 21 billion available for investments in acquisitions and partnerships, dividends, as well as share buybacks, providing optionality and supporting distributions to shareholders. We do see continued significant opportunities to expand and deepen our position across Africa, and we will selectively invest where we have clear competitive advantages and strong prospects for value creation. We invested $80 million of additional capital in Tanzania in July 2026, and we remain on track to increase our shareholding in Angola during the H2 2026, further strengthening the group's presence in two of Africa's most attractive growth markets. This framework links capital strength directly to growth, resilience, and shareholder returns. On slide 30, we show shareholder returns. For the period under review, we calculate a declining cost of equity for the group of 13.4%. The group's return on equity improved to 19.8%.

Speaker #2: Providing optionality and supporting distributions to shareholders. We continue to see significant opportunities to expand and deepen our position across Africa, and will selectively invest where we have clear competitive advantages and strong prospects for value creation.

Speaker #2: We invested $80 million of additional capital in Tanzania in July 2026, and we remain on track to increase our shareholding in Angola during the second half of 2026, further strengthening the group's presence in two of Africa's most attractive growth markets.

Speaker #2: This framework links capital strength directly to growth, resilience, and shareholder returns. On slide 30, we show shareholder returns for the period under review. We calculate a declining cost of equity for the group of 13.4%.

Speaker #2: The group's return on equity improved to 19.8%. The spread between ROE and cost of equity widened further, which generated increased shareholder value add of R8.4 billion. This is 55% higher than this time last year.

Arno Daehnke: The spread between ROE and cost of equity widened further, which generated increased shareholder value add of ZAR 8.4 billion, and this is 55% higher than this time last year. The interim dividend increased by 10% to ZAR 9.02 per share, and this represents a payout ratio of earnings of 56%. The combination of stronger returns, a robust capital position, and disciplined allocation supports sustained growth in shareholder value and distributions to shareholders. I will now provide a brief overview of performance across the group's businesses, products, and regions. Slide 32 provides a portfolio view illustrating our diversified franchise by business unit, product, and region. By business unit, you can see CIB remains the largest contributor to the group's earnings. CIB and Insurance and Asset Management both delivered excellent growth.

Speaker #2: The interim dividend increased by 10% to 9 rand and 2 cents per share, and this represents a payout ratio of earnings of 56%. The combination of stronger returns, a robust capital position, and disciplined allocation supports sustained growth in shareholder value and distributions to shareholders.

Speaker #2: I will now provide a brief overview of performance across the Group's businesses, products, and regions. Slide 32 provides a portfolio view, illustrating our diversified franchise by business unit, product, and region.

Speaker #2: By business unit, you can see CRB remains the largest contributor to the Group's earnings. CRB, Insurance, and Asset Management both delivered excellent growth.

Speaker #2: By product, the drag of endowment on a large transactional product base is evident, despite good clients and balanced growth. Lending products at an aggregate level benefited from lower credit losses. Global markets continue to grow strongly over a large base.

Arno Daehnke: By product, the drag of endowments on our large transactional product base is evident despite good clients and balanced growth. Lending products at an aggregate level benefited from lower credit losses. Global Markets continues to grow strongly off a large base. By legal entity, SBSA increased by 14%, Africa Regions by 11% in constant currency, and Liberty by 6%, while offshore declined by 18%. Not every portfolio moved in the same direction, but the breadth of the group across businesses, products, and regions supported resilient earnings growth at a group level. This slide builds the group's headline earnings by business unit. CIB, as I have mentioned, had a standout performance and delivered earnings of ZAR 13.8 billion, up 15%, with a return on equity of 24.8%. BCB overall delivered earnings of ZAR 4.4 billion. While down 2% on the prior period, a strong return on equity of 36.3% was sustained.

Speaker #2: By legal entity, SBSA increased by 14%, Africa Regions by 11% in constant currency, and Liberty by 6%, while Offshore declined by 18%. Not every portfolio moved in the same direction, but the breadth of the group across businesses, products, and regions supported resilient earnings growth at a group level.

Speaker #2: This slide builds the group's headline earnings by business unit. CRB, as I have mentioned, had a standout performance and delivered earnings of R13.8 billion, up 15%, with a return on equity of 24.8%.

Speaker #2: BCB overall delivered earnings of R4.4 billion. While down 2% on the prior period, a strong return on equity of 36.3% was sustained. Within this result, the South Africa business achieved a robust result, with earnings up 5%.

Arno Daehnke: Within this result, the South Africa business achieved a robust result with earnings up 5%. PPB overall earnings declined by 1% to ZAR 4.6 billion. Again, within this result, the South Africa performance was excellent, achieving 12% growth. Return on equity was 18.6%. The endowment impact of declining interest rates in Africa Regions and offshore materially impacted both BCB and PPB results in these regions. Slide 34 shows the performance of our large and growing banking franchise in South Africa. Headline earnings for this legal entity increased by 14% to ZAR 11 billion. The result was achieved through good balance sheet growth, a more entrenched client base, higher client activity, and improved credit performance. Despite our volatile and competitive operating environment, SBSA continues to deliver consistent revenues and returns for the group.

Speaker #2: PPB, overall earnings declined by 1% to R4.6 billion. Again, within this result, the South Africa performance was excellent, achieving 12% growth. Return on equity was 18.6%.

Speaker #2: The endowment impact of declining interest rates in Africa regions and offshore materially impacted both BCB and PPB results in these regions. Slide 34 shows the performance of our large and growing banking franchise in South Africa.

Speaker #2: Headline earnings for this legal entity increased by 14% to R11 billion. The result was achieved through good balance sheet growth, a more entrenched client base, higher client activity, and improved credit performance.

Speaker #2: Despite a volatile and competitive operating environment, SBSA continues to deliver consistent revenues and returns for the group. Africa Regions collectively delivered headline earnings of R10.4 billion, up 7% in rand and 11% in constant currency, and contributed 40% of group headline earnings.

Arno Daehnke: Africa regions collectively delivered headline earnings of ZAR 10.4 billion, up 7% in rand and 11% in constant currency, and contributed 40% of group headline earnings. East Africa earnings were broadly flat in rand and increased by 11% in constant currency. South and Central Africa increased by 6% in rand and 9% in constant currency. West Africa grew earnings by a robust 13% in rand and 12% in constant currency. Africa regions return on equity remains strong at 24.8%, well above the 16.1% cost of equity we calculate for our diverse portfolio of Africa regions countries. As our Africa regions businesses achieve scale, they are increasingly funding their own growth and paying dividends. For 2025, Africa regions achieved a payout ratio of approximately 50%, with most dividends settled to date. Slide 36 uses headline earnings to 2025 to illustrate the strength of our Africa regions portfolio.

Speaker #2: East Africa earnings were broadly flat in rand and increased by 11% in constant currency. South and Central Africa increased by 6% in rand and 9% in constant currency.

Speaker #2: West Africa grew earnings by a robust 13% in rand, and 12% in constant currency. Africa Regions’ return on equity remained strong at 24.8%, well above the 16.1% cost of equity we calculate for our diverse portfolio of Africa Regions countries.

Speaker #2: As our Africa Regions businesses achieved scale, they are increasingly funding their own growth and paying dividends. For 2025, Africa Regions achieved a payout ratio of approximately 50%, with most dividends settled to date.

Speaker #2: Slide 36 uses headline earnings to 2025 to illustrate the strength of our Africa Regions portfolio. On the left, our eight largest earnings contributors outside of South Africa—you can see they are individually volatile.

Arno Daehnke: On the left are eight largest earnings contributors outside of South Africa. You can see here individually volatile. In the middle, countries are grouped by sub-region, clearly evidencing regional diversity, and on the right, the aggregated portfolio is collectively resilient. This diversification underpins a resilient and steady growing sub-Saharan franchise. Africa regions earnings have on average grown by 14% per annum since 2015. I will now conclude with the macroeconomic outlook and our guidance for the full year. Our weighted macroeconomic expectations for 2026 have moderated slightly since March, but they still reflect an improvement on 2025. Weighted real GDP growth for 2026 is now expected at 2.3%, inflation at 5.3%, and interest rates at 7.9%. Higher for longer inflation and interest rates have and will continue to impact loan growth but protect margins. The stronger than anticipated rand has moved the expected currency translation impact from -1% to -2%.

Speaker #2: In the middle, countries are grouped by subregion, clearly evidencing regional diversity. And on the right, the aggregated portfolio's collective diversification underpins a resilient and steadily growing sub-Saharan franchise.

Speaker #2: Africa Regions earnings have, on average, grown by 14% per annum since 2015. I will now conclude with the macroeconomic outlook and our guidance for the full year.

Speaker #2: Our weighted macroeconomic expectations for 2026 have moderated slightly since March, but they still reflect an improvement on 2025. Weighted real GDP growth for 2026 is now expected at 2.3%, inflation at 5.3%, and interest rates at 7.9%.

Speaker #2: Higher for longer inflation and interest rates have, and will continue to, impact loan growth but protect margins. The stronger-than-anticipated rand has moved the expected currency translation impact from negative 1% to negative 2%.

Speaker #2: This implies that rand earnings growth is now anticipated to be around 2% slower than constant currency earnings growth. While near-term expectations have shifted, the broader portfolio fundamentals remain supportive of growth and returns.

Arno Daehnke: This implies that rand earnings growth is now anticipated to be around 2% slower than constant currency earnings growth. While near-term expectations have shifted, the broader portfolio fundamentals remain supportive of growth and returns. Our full year 2026 guidance is unchanged. The group's diversified and well-positioned franchise is expected to benefit from resilient macroeconomic conditions and increased economic activity across our markets. We continue to expect banking revenue growth for 2026 to be in the mid to high single digits, supported by continued business momentum across our franchise. Within this expectation, we do acknowledge that a stronger rand will impact growth rates. NII is expected to grow by mid-single digits. NIR is now expected to grow by high single digits. The cost to income ratio is expected to decline slightly as we apply our save to invest approach to fund strategic investments.

Speaker #2: Our full-year 2026 guidance is unchanged. The Group’s diversified and well-positioned franchise is expected to benefit from resilient macroeconomic conditions and increased economic activity across our markets.

Speaker #2: We continue to expect banking revenue growth for 2026 to be in the mid- to high-single digits, supported by continued business momentum across our franchise.

Speaker #2: Within this expectation, we do acknowledge that a stronger rand will impact growth rates. NRI is expected to grow by mid-single digits, while NRR is now expected to grow by high single digits.

Speaker #2: The cost-to-income ratio is expected to decline slightly as we apply our save-to-invest approach to fund strategic investments. Our cost growth will be positively assisted by currency impacts.

Arno Daehnke: Our cost growth will be positively assisted by currency impacts. The credit loss ratio for the year is anticipated to remain within the bottom half of the through the cycle target range of 70 to 100 basis points. Our return on equity for 2026 is expected to be higher than in 2025. Our guidance, of course, remains subject to uncertainty in global sentiment, trade flows, inflation, as well as economic growth. To conclude, our H1 results demonstrate strong progress against our 2028 commitments with record earnings, higher returns, positive operating leverage, improved credit performance, and a stronger capital position. We grew our client base and deepened client activity while continuing to invest in talent, technology, digital capabilities, and artificial intelligence. The external environment clearly remains uncertain, but with our portfolio of diverse businesses, products, and regions, we have maintained our guidance for the full year.

Speaker #2: The credit loss ratio for the year is anticipated to remain within the bottom half of the through-the-cycle target range of 70 to 100 basis points.

Speaker #2: Our return on equity for 2026 is expected to be higher than in 2025. Our guidance, of course, remains subject to uncertainty and global sentiment, trade flows, inflation, as well as economic growth.

Speaker #2: To conclude, our first-half results demonstrate strong progress against our 2028 commitments, with record earnings, higher returns, positive operating leverage, improved credit performance, and a stronger capital position.

Speaker #2: We grew our client base and deepened client activity while continuing to invest in talent, technology, digital capabilities, and artificial intelligence. The external environment clearly remains uncertain, but within our portfolio of diverse businesses, products, and regions, we have maintained our guidance for the full year.

Speaker #2: We remain confident in the strength of the franchise, the discipline embedded in our execution, and our ability to deliver against our targets. With that, I will hand back to Simpiwe.

Arno Daehnke: We remain confident in the strength of the franchise, the discipline embedded in our execution, and our ability to deliver against our targets. With that, I will hand back to Sim. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you, Arno. As confirmed, our guidance for this financial year remains unchanged. I will conclude our presentation this morning with some thoughts on the medium term. I remind you that we expect Africa to continue to be the fastest growing region in the world.

Sim Tshabalala: Thank you, Arno. As you've heard, Arno has confirmed our guidance for this financial year. I will conclude our presentation this morning with some thoughts on the medium term. I remind you that we expect Africa to continue to be the fastest-growing region in the world. Despite the war in the Middle East, the macroeconomic fundamentals in Africa remain highly supportive and have been only moderately and modestly impacted in the short term since the war broke out in February. Our purpose has not changed, and our strategy remains quite simple: to compete and win in our chosen markets and segments. We are led by our four business units, enabled by our strong brand, excellent people, modern and secure technology, and wide range of partnerships, all underpinned by diligence, capital allocation, and effective risk management.

Speaker #1: Despite the war in the Middle East, the macroeconomic fundamentals in Africa remain highly supportive and have been only moderately and modestly impacted in the short term since the war broke out in February.

Speaker #1: Our purpose has not changed, and our strategy remains quite simple: to compete and win in our chosen markets and segments. We are led by our four business units, enabled by our strong brand, excellent people, modern and secure technology, and a wide range of partnerships.

Speaker #1: All underpinned by digital, by diligent capital allocation, and effective risk management. We remain entirely confident that executing this strategy will maximize the value of our portfolio and deliver our growth and returns, on which I will be speaking shortly.

Sim Tshabalala: We remain entirely confident that executing this strategy will maximize the value of our portfolio and deliver our growth and returns, on which I will be speaking shortly. This slide shows a summary of the BU strategic focus areas and financial targets to 2028. Again, these plans and targets were discussed in detail at our Capital Markets Day. In each business unit, growth will be achieved by focusing intensely on meeting our clients' needs, supporting our growth, and providing excellent client experience. Each business unit is investing in the appropriate technology to improve efficiency, and each business unit is being encouraged and incentivized to find more opportunities for cross-BU collaboration. Returning to our medium-term financial targets, this slide makes two main points. First, it illustrates our history of steady progress since 2020. We did what we said we were going to do over that period.

Speaker #1: This slide shows a summary of the BU strategic focus areas and financial targets to 2028. Again, these plans and targets were discussed in detail at our Capital Markets Day.

Speaker #1: In each business unit, growth will be achieved by focusing intensely on meeting our clients' needs, supporting our growth, and providing excellent client experience. Each business unit is investing in their appropriate technology to improve efficiency.

Speaker #1: And each business unit is being encouraged and incentivized to find more opportunities for cross-BU collaboration. Returning to our medium-term financial targets, this slide makes two main points.

Speaker #1: First, it illustrates our history of steady progress since 2020. We did what we said we were going to do over that period, and we will do the same in this new period through to the end of 2028.

Sim Tshabalala: We will do the same in this new period to the end of 2028. Despite global turbulence, and as our record shows, we will navigate through volatility and uncertainty to achieve the targets for 2028. Just to restate them for the record. We will increase our banking revenue by 7% to 10% each year on average to 2028. We will continue to focus on generating operational leverage to ensure that our cost-to-income ratio trends down from 50%. We will increase our headline earnings per share by 8% to 12% on average from 2025 to 2028. We will achieve an ROE well within our target range of 18% to 22%. I will conclude with five key points that we would like you to take away from our presentation today. Africa's macroeconomic prospects are bright. Our strategy is clear and consistent.

Speaker #1: Despite global turbulence, and as our record shows, we will navigate through volatility and uncertainty to achieve the targets for 2028. Just to restate them for the record, we will increase our banking revenue by 7% to 10% each year on average to 2028.

Speaker #1: We will continue to focus on generating operational leverage to ensure that our cost-to-income ratio trends down from 50%. We will increase our headline earnings per share by 8% to 12% on average from 2025 to 2028.

Speaker #1: We will achieve an ROE well within our target range of 18% to 22%. I'll conclude with five key points that we would like you to take away from our presentation today.

Speaker #1: Africa's macroeconomic prospects are bright. Our strategy is clear and consistent. Our business units are executing our strategy systematically and successfully, as our results show.

Sim Tshabalala: Our business units are executing our strategy systematically and successfully, as our results show. We are highly confident that we will reach our 2028 targets. Standard Bank Group continues to do what we say we will do. Finally, we believe that Standard Bank is very well-positioned to help investors capture the opportunities arising from Africa's strong and steady growth. Thank you for your attention. That concludes the presentation. As always, our sincere gratitude to our policymakers and regulators for the world-class regulatory environments they create for us and for our sector. Thank you to our shareholders for your continued support. We would like to say thank you to our 20 million clients for their continued trust in us. Last but not least, we thank our 50,000 employees for their professionalism and hard work. We will now take questions. If I could ask my colleagues to join me on stage.

Speaker #1: We are highly confident that we will reach our 2028 targets. Standard Bank Group continues to do what we say we will do. Finally, we believe that Standard Bank is very well-positioned to help investors capture the opportunities arising from Africa's strong and steady growth.

Speaker #1: Thank you for your attention. That concludes the presentation. As always, our sincere gratitude to our policymakers and regulators for the world-class regulatory environments they create for us and for our sector.

Speaker #1: Thank you to our shareholders for your continued support. We would also like to say thank you to our 20 million clients for their continued trust in us.

Speaker #1: And last but not least, we thank our 50,000 employees for their professionalism and hard work. We will now take questions. If I could ask my colleagues to join me on stage, and if we could start on the conference call—operator, are there any questions?

Sim Tshabalala: If we could start on the conference call. Operator, are there any questions?

Speaker #2: Thank you. Yes, we do. The first question comes from Harry Bertha of Bank of America Securities. Please go ahead.

Operator: Thank you. Yes, we do. First question comes from Harry Buhner of BofA Securities. Please go ahead.

Speaker #1: Good morning. Thank you for the opportunity. Can you please elaborate on the higher banking revenue growth that you expect in the second half? Is it mostly below endowment headwinds in the second half?

Harry Buhner: Good morning. Thank you for the opportunity. Can you please elaborate on the higher banking revenue growth that you expect in the H2? Is it mostly lower endowments headwinds in the H2? Can you give us more detail on the non-interest revenue growth headwinds in BCB, particularly Africa regions? Has that changed your 2026 non-interest revenue expectations for BCB, or should the H2 be better? Finally, can you comment on the outlook for ICBC Standard Bank, given its potential exposure to Radiant World? Thank you.

Harry Botha: Good morning. Thank you for the opportunity. Can you please elaborate on the higher banking revenue growth that you expect in the H2? Is it mostly lower endowments headwinds in the H2? Can you give us more detail on the non-interest revenue growth headwinds in BCB, particularly Africa regions? Has that changed your 2026 non-interest revenue expectations for BCB, or should the H2 be better? Finally, can you comment on the outlook for ICBC Standard Bank, given its potential exposure to Radiant World? Thank you.

Speaker #1: And then can you give us more detail on the non-interest revenue growth headwinds in BCB, particularly in Africa regions? Has that changed your 2026 non-interest revenue expectations for BCB, or should the second half be better?

Speaker #1: And finally, can you comment on the outlook for ICBCS, given its potential exposure to Radiant World? Thank you.

Speaker #3: So, Anna, will you share that with Paul?

Sim Tshabalala: Arno, will you share that with Paul?

Speaker #1: Sure. On the higher banking revenue growth—hi, Harry, good to hear from you again—we do see slightly accelerating loans and advances growth, so we'll see an expanding loan portfolio.

Arno Daehnke: Sure. On the higher banking revenue growth. Hi, Harry. Good to hear from you again. We do see slightly accelerating loans and advances growth, so we will see an expanding loan portfolio. We are also seeing the impact of interest rates starting to be in the base more. So margins should improve slightly to what we have printed now, and obviously that will improve NII. On the NIR side, we see continued high growth, obviously in the fees and commission line item in businesses like PPBSA. That should overall accelerate our revenue line item. Of course, I have also mentioned, Harry, we are seeing the currency impact slightly bigger than we had anticipated, but that is also supporting our bottom, our cost line. That is important for you to note. On the bottom line basis, we continue to maintain our earnings guidance on that basis, as I have indicated.

Speaker #1: And we are also seeing interest rates starting to— the impact of interest rates starting to be in the base more. So margins should improve slightly compared to what we've printed now.

Speaker #1: And obviously, that will improve NRI. On the NRR side, we see continued high growth, obviously, in the fees and commission line item in businesses like PPBSA.

Speaker #1: And that should overall accelerate our revenue line item. Of course, I have also mentioned, Harry, we are seeing the currency impact slightly bigger than we had anticipated, but that is also supporting our bottom, our cost line.

Speaker #1: That's important for you to note. So, on a bottom-line basis, we continue to maintain our earnings guidance on that basis, as I've indicated.

Speaker #3: ICBCS?

Sim Tshabalala: ICBCS?

Speaker #1: ICBCS, yeah, they're doing well. They have a diversified franchise. There are many clients who are now transacting with that business. We see relatively stable and consistent revenue flowing through that business.

Arno Daehnke: ICBC Standard Bank, yeah. They are doing well. They have had a diversified franchise. There are many clients which are now transacting with that business. We see relatively stable and consistent revenue flowing through that business. I mentioned the precious metals business, but there also are other business structured and fixed businesses in that entity. For now, we anticipate continued good performance in ICBC Standard Bank. The sale of ICBC Standard Bank, if I can just preempt that, Sim. Previously, we had spoken about selling that business. For now, I think it is best for people on the call and stakeholders to assume that ICBC Standard Bank is going to remain a part of our business, and we continue to work with them to maximize their revenue as well as our revenue, of course.

Speaker #1: I mentioned the precious metals business, but there are also other business structures and fake businesses in that entity. And for now, we anticipate continued good performance in ICBCS.

Speaker #1: The sale of ICBCS—if I can just preempt that—some previously, we had spoken about selling that business. For now, I think it’s best for people on the call and stakeholders to assume that ICBCS is going to remain a part of our business, and we continue to work with them to maximize their revenue, as well as our revenue, of course.

Speaker #3: Great. Paul, do you want to add anything on TCB?

Sim Tshabalala: Great. Paul, do you want to add anything on BCB?

Speaker #4: Yeah, perfect, Harry. Thank you. Thanks for the question. So, with respect to NRR, the growth was obviously depressed in this first half. There are a couple of things that we had to digest from last year.

Yuresh Maharaj: Yeah. Perfect, Harry. Thank you. Thanks for the question. With respect to NIR, the growth obviously depressed in this H1. There are a couple of things that we had to digest from last year. We had a number of property sales, et cetera, incorporated in NIR from last year, that obviously are not repeated this year. Probably the biggest shift has been with respect to global market flows and the compression of margins on global market flows. You will know from our results previously that forms a big portion of our NIR base. Then we have also had to digest quite significant increase in deposit insurance. The long-term focus for us, Harry, is of course, diversification, both of clients, and the sources of NIR for this business over time. I hope that gives you a sense of that.

Speaker #4: So we had a number of property sales, et cetera, incorporated in NRR from last year that obviously aren't repeated this year. Probably the biggest shift has been with respect to global market flows and the compression of margins on global market flows.

Speaker #4: And you'll know from our results previously that that forms a big portion of our NRR base. And then we've also had to digest quite a significant increase in depositor insurance.

Speaker #4: The long-term focus for us, Harry, is of course diversification—both of clients and the sources of NRR for this business over time. So, I hope that gives you a sense of that.

Speaker #3: Great. Any more questions, operator?

Sim Tshabalala: Any more questions, operator?

Speaker #2: Thank you. At this stage, we have no further questions from the telephone lines. Thank you.

Operator: Thank you. At this stage, we have no further questions from the telephone lines. Thank you.

Speaker #3: Many thanks, Sarah. On Teams.

Sim Tshabalala: Many thanks. Sarah, on teams.

Speaker #5: Thanks, Sim. We do have a number of questions, so bear with me. The first question, or a couple of questions, are from Baron Comor at JP Morgan.

Sarah Rivett-Carnac: Thanks, Sim. We do have a number of questions, so bear with me. The first question or a couple of questions are from Baron Cuomo at J.P. Morgan. The first question is, can you guide to FY26 CLR? Sorry. You guide to FY26 CLR in the lower half of your through-the-cycle range of 70 to 100 basis points. Please can you expand on what leading indicators in your macro and portfolio data are giving you confidence in that outcome today? The second question is for IAM. Net income from insurance and asset management activities was down 3% year on year, but overall headline earnings increased materially up 15%. Please, can you help reconcile the numbers?

Speaker #5: The first question is, can you guide to FY26 CLR—sorry, you guide to FY26 CLR in the lower half of your through-the-cycle range of 70 to 100 basis points?

Speaker #5: Please, can you expand on what leading indicators in your macro and portfolio data are giving you confidence in that outcome today? And then the second question is for IAM.

Speaker #5: Net income from insurance and asset management activities was down 3% year-on-year, but overall headline earnings increased materially, up 15%. Please, can you help reconcile the numbers?

Arno Daehnke: I will start with the first one then. Hi, Baron. Great to hear from you. I made a few points in my presentation just now on the outlook, where we are constructive on the macroeconomic outlook. We are seeing, as I mentioned, sub-Saharan economic growth to remain resilient around 4.3% in 2026 and improve to 4.6% in 2027. We have also seen really great macroeconomic stabilization reforms in many of our markets. Think about Angola, Ghana, Nigeria, and Zambia. We have seen strengthening of policy frameworks and favorable terms of trades, which that has unlocked Nigeria being a great example. Overall, the macros are supportive, and that has resulted in a fairly benign outlook for credit charges.

Speaker #3: I'll start with the first one, then. Hi, Baron. Great to hear from you. Yeah, I made a few points in my presentation just now on the outlook.

Speaker #3: We are constructive on the macroeconomic outlook. We're seeing, as I mentioned, sub-Saharan economic growth remaining resilient at around 4.3% in 2026, and improving to 4.6% in 2027.

Speaker #3: We've also seen really great macroeconomic stabilization reforms in many of our markets. Think about Angola, Ghana, Nigeria, and Zambia. And we've seen strengthening of policy frameworks and favorable terms of trade, with that unlocking—Nigeria being a great example.

Speaker #3: So, overall, the macros are supportive and that has resulted in a fairly benign outlook for credit charges. As you have noted, in our guide we remain at the bottom end of our through-the-cycle range, but from a credit loss ratio point of view, slightly higher than the 73 basis points we noted in 2025.

Arno Daehnke: As you have noted, our guide, we remain at the bottom end of our through-the-cycle range, but from a credit loss ratio point of view, slightly higher than the 73 basis points we noted in 2025. Baron, what we also do, as you know, in our analyst booklet, which I am sure you have on hand on page 123, we do disclose in a fair amount of detail the macroeconomic variables on which we model our portfolios. We do this for a base, bear, and bull scenario, and the key macro parameters are outlined for that, as well as the implications for forward-looking impairment adjustments.

Speaker #3: Baron, what we also do, as you know, in our analyst booklet—which I'm sure you have on hand, on page 123—we do disclose in a fair amount of detail the macroeconomic variables on which we model our portfolios.

Speaker #3: And we do this for a base, bear, and bull scenario. The key macro parameters are outlined for each, as well as the implications for forward-looking impairment adjustments.

Speaker #3: Very happy to go through the detail with you when we meet later on. But that does give you a good indication of how we're seeing the various downside and upside scenarios playing out in the next 18 to 24 months.

Arno Daehnke: I am very happy to go through the detail with you when we meet later on, but that does give you a good indication on how we are seeing the various downside and upside scenarios playing out in the next 18 to 24 months, and on which we have based our forecasts.

Speaker #3: And on which we've based our forecasts. Cool. And then the IM question?

Sim Tshabalala: Cool. The IAM question.

Speaker #4: Yeah, thanks. Morning, Baron. Thanks for the question. It actually relates to one of the technical accounting consequences of adopting IFRS 17, and the reason for that is we effectively capture in that line taxes that we collect and we have to pay over on a fiduciary basis for our policyholder base.

Yuresh Maharaj: Yeah. Thanks. Morning, Baron. Thanks for the question. It actually relates to one of the technical accounting consequences of adopting IFRS 17. The reason for that is, we effectively capture in that line taxes that we collect, and we have to pay over on a fiduciary basis, for our policyholder base. So it does distort the line, and you would expect that to be in your tax paid line. So that does distort the number. We are happy to unpack that with you. We normally do a detailed build-up and disclosures in our year-end results. Normalizing for that fiduciary tax collection, I would say that number is more in the region of 4% up as opposed to 3% down. Thanks.

Speaker #4: So, it does distort the line, and you would expect that to be in your tax baseline. So, that does distort the number. We're happy to unpack that with you.

Speaker #4: We normally do a detailed build-up and disclosures in our year-end results, sort of normalizing for that fiduciary tax collection. I would say that number is more in the region of a 4% up as opposed to a 3% down.

Speaker #4: Thanks.

Speaker #3: Great. Sarah?

Arno Daehnke: Great. Sarah?

Sim Tshabalala: Great. Sarah?

Speaker #2: Thanks. The next question is from Warren Riley from Bachelor Capital. The performance has primarily been driven by the CIB division, while negative endowment in Africa has negatively impacted BCB and PPB.

Sarah Rivett-Carnac: Thanks. The next question is from Warren Riley from Bateleur Capital. The performance has primarily been driven by the CIB division, while negative endowment in Africa has negatively impacted BCB and PPB. Do you expect the shape of this performance to persist in H2 2026? When do you expect the endowment headwind to turn in Africa regions?

Speaker #2: Do you expect the shape of this performance to persist in the second half of 2026? And when do you expect the endowment headwind to turn in Africa regions?

Speaker #3: Yeah, thank you. We are expecting slightly better performance in BCB and PPB in the second half of the year. You would know that, seasonally, the retail business does better in the second half, and we do expect that trend to manifest again during this period.

Arno Daehnke: Yeah, thank you. We are expecting a slightly better performance in BCB and PPB in the H2 of the year. You would know that seasonally, the retail business does better in the H2, and we do expect that trend again to manifest in this period. So a stronger contribution from BCB and PPB, particularly in Africa regions. You would have noted that endowment headwinds were very material in Africa regions in the H1. We are seeing that coming increasingly into the base now, and endowment headwinds will start to lessen from now onwards. But I guess, only washing through fully in 2027.

Speaker #3: So, a stronger contribution from BCB and PPB, particularly in Africa Regions. You would have noted that endowment headwinds—and I'll come to your second part of the question now—were very material in Africa Regions in the first half.

Speaker #3: We are seeing that coming increasingly into the base now, and endowment headwinds will start to lessen from now onwards, but I guess only wash through fully in 2027.

Speaker #5: Then we've got a few questions from Chris Stewart. So, the first two are for Arno. Please, can you comment on the growth in trading income in Q1 versus Q2?

Sarah Rivett-Carnac: Then we have a few questions from Chris Stuart. The first two for Arno. Please, can you comment on the growth in trading income in Q1 versus Q2, and how does this impact your outlook for the H2 of 2026? Apologies for Luvuyo. Then two further questions. Please, can you unpack the nature of the increased claims experience that dampened insurance income? Thirdly, when do you expect the relationship between loan origination volumes and book growth to normalize? The presentation shows great originations. When will this translate into more robust book growth?

Speaker #5: And how does this impact your outlook for the second half of 2026? Apologies for the Lavoia. And then two questions, or two further questions. Please, can you unpack the nature of the increased claims experience that dampened insurance income?

Speaker #5: And then, thirdly, when do you expect the relationship between loan origination volumes and book growth to normalize? The presentation shows great originations—when will this translate into more robust book growth?

Speaker #3: So we're going to defy Chris. We'll ask Lavoia to answer the trading question, and then Arno, between you and Yuresh, on the IM question.

Arno Daehnke: We will defy Chris. We will ask Luvuyo to answer the trading question, and then Arno, between you and Yuresh on the IAM question.

Sim Tshabalala: We will defy Chris. We will ask Luvuyo to answer the trading question, and then Arno, between you and Yuresh on the IAM question.

Speaker #4: Thank you very much, Chris. You are absolutely right. It was a tale of two quarters. In terms of the performance of our trading global markets, the first one obviously benefited from the high volatility and client activity that we were able to take advantage of, which really benefited the business.

Luvuyo Masinda: Thank you very much, Chris. You are absolutely right. It was a tale of two quarters, in terms of the performance of our trading global markets. The first one, obviously benefiting from the high volatility and client activity that we were able to take advantage of, which really benefited the business. I would say that Q1 performed well ahead of plan, while Q2 was slower, but only slightly below plan. To give you a sense, if we maintain the performance of Q2 for the rest of the year, we will still get very close to our full year plan of trading revenues of around mid to high single digits. Maybe I should answer partly, CIB was a big contributor to this dislocation between origination versus asset growth.

Speaker #4: And so I would say that Q1 performed well ahead of plan, while Q2 was slower but only slightly below plan. To give you a sense, if we maintain the performance of Q2 for the rest of the year, we'll still get very close to our full-year plan of trading revenues of around mid- to high-single digits.

Speaker #4: Maybe I should answer partly. CIB was a big contributor to this location between origination versus asset growth. We'll start to see more and more that the business, especially through the joint venture between our IB and Global Markets business, will originate large transactions and structure them, but with the purpose upfront of distributing that—especially for our investors, both locally but also offshore.

Luvuyo Masinda: We will start to see more and more that the business, especially through the joint venture between our IB and global markets business, we will originate large transactions and structure them, but with the purpose upfront of distributing that, especially for our investors, both locally but also offshore. That is a trend I think you will start to see continuing. This H1 was especially strong. When I look at the pipeline, there are more opportunities for that, where we will see strong origination, but with purposeful distribution for a lot of that risk.

Speaker #4: And so, that is a trend I think you'll start to see continuing. This first half was especially strong, and when I look at the pipeline, there are more opportunities for that.

Speaker #4: We will see strong origination, but with purposeful distribution for a lot of that risk.

Speaker #3: Thank you. On the claims experience, Yuresh, over to you, please.

Arno Daehnke: Thank you. On the claims experience, Yuresh, over to you, please.

Sim Tshabalala: Thank you. On the claims experience, Yuresh, over to you, please.

Speaker #4: Yeah, thanks. Morning, Chris. I would start off by saying this: the book of business that we're referring to is actually quite large, mature, and established.

Yuresh Maharaj: Yeah, thanks. Morning, Chris. I would start off by saying, the book of business that we are referring to is actually quite large, mature, and established. It is in excess of 3 million policies now. What we do experience from time to time is cyclical changes. Just to remind you, we have had multiple periods of good claims experience. This was one which was not as good as what we have experienced over multiple periods. This is one that we continue to monitor on a quarterly basis and have the ability to reprice if we see that this experience persists. Thanks.

Speaker #4: It's in excess of 3 million policies now. And so, what we do experience from time to time is cyclical changes. Just to remind you, we've had multiple periods of good claims experience.

Speaker #4: And this was one which was not as good as what we've experienced over multiple periods. This is one that we continue to monitor on a quarterly basis.

Speaker #4: And have the ability to reprice if we see that this experience persists. Thanks.

Speaker #3: Thank you, Yuresh. And Funeka, you may want to comment on the origination activity, and then Bill, if you can also comment on the products in BCB.

Arno Daehnke: Thank you, Yuresh. Ronika, you may want to comment on the origination activity. Bill, if you can also comment on the products in BCB.

Sim Tshabalala: Thank you, Yuresh. Ronika, you may want to comment on the origination activity. Bill, if you can also comment on the products in BCB.

Speaker #5: Morning, Chris. PPB first half of the year, R61 billion originations, yet the book growth is low single digits. Why? In South Africa, it's really a story of the mortgage book.

Funeka Montjane: Morning, Chris. PPB H1 of the year, ZAR 61 billion originations, yet the book growth is low single digits. Why? In South Africa, it is really a story of the mortgage book. As you originate, the older books prepay. As you will remember, in the COVID period, we originated quite a proportionally higher book in both of those years. So that book is running off faster than the book that we are putting on the market now. Second, in Africa regions, the dislocation between disbursement amount and the balance sheet is likely to be more pronounced simply because we are doing a lot more, as you know, unsecured lending books. We are also doing short-term lending books as well. So think about 90 to 180 months, sorry. Sorry, 90 to 180 days sort of loans.

Speaker #5: The amount of, as you originate, the older books prepay. And, as you will remember, in the COVID period, we originated quite a proportionally higher book in both of those years.

Speaker #5: So, that book is running off faster than the book that we are putting on the market now. And secondly, in Africa regions, the dislocation between disbursement amount and the balance sheet is likely to be more pronounced, simply because we are doing a lot more.

Speaker #5: As you know, unsecured lending books were also doing short-term lending books as well. So think about 90- or 180-day books, which—80 months, sorry. That means, sorry, 60, 90 to 180 days is sort of the loans.

Speaker #5: If you do that, then it means that what you will have, for the same balance, will turn a couple of times within the reporting period—which is great from an income and an ROE perspective, particularly given the current experience we've seen from a collections perspective.

Funeka Montjane: If you do that, then it means that what you will have for the same balance, it will turn a couple of times per reporting period, which is great from an income and an ROE perspective, particularly given the current experience that we are seeing from a collection perspective. So I think that is probably more of a structural change between those two numbers. Thank you.

Speaker #5: So I think that that is probably more of a structural change between those two numbers. Thank you. Thanks, Lavoia.

Bill Blackie: Yeah. Just commenting on this first point Funeka just raised. So in BCB, total origination and disbursements was ZAR 62 billion for the half. What we are doing is we are shifting and starting to build, as I have commented previously, the structured debt capability and more longer-term lending. So moving away from the dependence on the very short-term nature of some of the historic origination. So you start to see that coming through in both South Africa and Africa regions. Africa regions starting to grow in double digits in constant currency. Obviously, a downdraft once you measure that in rands, and then South Africa growing at 9%. So that hopefully will start to give you the sense of conversion of origination into balance sheet growth. Thanks, Sara.

Speaker #3: Yeah, and then just commenting on this point that Funeka just raised. So, in BCB, total origination and disbursements are R62 billion for the half. What we're doing is we're shifting and starting to build, as I've commented previously, the structured debt capability and more longer-term lending.

Speaker #3: And so, moving away from the dependence on the very, very short-term nature of some of the historic origination, you start to see that coming through in both South Africa and Africa regions.

Speaker #3: Africa regions starting to grow in double digits in constant currency—obviously, there's a downdraft once you measure that in rands. And then South Africa growing at 9%.

Speaker #3: So that will hopefully start to give you a sense of the conversion of origination into balance sheet growth.

Speaker #2: Thanks, Yuresh.

Sarah Rivett-Carnac: Thank you. The next series of questions are from Charles Russell, from SBG Securities. Can you quantify the impacts of the investment in Tanzania and Angola on your Common Equity Tier 1 and ROE? The second question, how sustainable is the 2% growth in IT function costs? Could you also elaborate on the 11% lower other costs as shown in the booklet? Thirdly, to what do you attribute the lower than guided NIR growth, 7% versus March guidance of low double digits?

Speaker #5: The next series of questions are from Charles Russell from SBG Securities. Can you quantify the impact of the investment in Tanzania and Angola on your common equity tier one and ROE?

Speaker #5: The second question: How sustainable is the 2% growth in IT function costs? Could you also elaborate on the 11% lower 'other costs' as shown in the booklet?

Speaker #5: And then, thirdly, to what do you attribute the lower-than-guided NIR growth—7% versus March guidance of low double digits?

Speaker #3: Back? Yeah, thank you. And hi, Charles. The impact on investment in Tanzania and Angola is not material relative to the group overall, so we can easily afford those additional investments.

Arno Daehnke: Doc?

Sim Tshabalala: Doc?

Arno Daehnke: Yeah. Thank you, Sarah, and hi, Charles. The impact on investment in Tanzania and Angola is not material relative to the group overall. We can easily afford those additional investments. Over the short to medium term, these investments will be ROE accretive. We are certainly generating value out of those additional investments. On the IT expenditure, we do have a tailwind of declining amortization charges, as you have noted in this period. But we are confident that we continue to invest in this very important technology and in the people, and specialist skills in the mid to high single digit level. You have seen, for example, in software cloud and technology costs that grew by 6%, our staff costs also grew by 6%. That investment continues, and we are ready to compete competitively with the modern technology stack.

Speaker #3: And over the short to medium term, these investments will be ROE accretive, so we're certainly generating value out of those additional investments. On the IT expenditure, we do have a tailwind of declining amortization charges, as you've noted in this period.

Speaker #3: But we are confident that we will continue to invest in this very important technology and in the people—and specialist skills—in the mid single-digit level.

Speaker #3: Mid- to high-single-digit level. And you've seen, for example, in software, cloud, and technology costs, that these grew by 6%. Our staff costs also grew by 6%.

Speaker #3: So that investment continues, and we are ready to compete competitively with the modern technology stack. On the other costs, there's a variety of items in there, Charles.

Arno Daehnke: On the other costs, there is a variety of items in there, Charles. It is a whole portfolio of other costs we have put together there. Perhaps when we meet, we can go into the individual line items, as opposed to me going through those now. The last question was the lower than guided NIR growth. The biggest impact is currency. Currency definitely has impacted that quite materially. I would say that the impacts are attributed to that.

Speaker #3: It's a whole portfolio of other costs we've put together there. Perhaps when we meet, we can go into the detailed line items as opposed to me going through those now.

Speaker #3: And then the last question was the lower-than-guided NIR growth. The biggest impact is currency. So, currency definitely has impacted that quite materially.

Speaker #3: And I would say that's the impact attributed to that, yeah.

Speaker #4: Thanks, Sarah.

Bill Blackie: Thanks, Sarah.

Speaker #5: The next question is from Chris Stewart from 91. Both PPB and BCB in Africa regions were negatively impacted by lower rates, despite credit quality tailwinds.

Sarah Rivett-Carnac: The next question is from Chris Stewart from Ninety One. Both PPB and BCB in Africa regions were negatively impacted by lower rates, despite credit quality tailwinds. In a structurally lower rates environment, what will be required to return these businesses to robust growth?

Speaker #5: In a structurally lower rates environment, what will be required to return these businesses to robust growth?

Speaker #3: Shall we go with Funeka first?

Bill Blackie: Shall we go with Funeka first?

Sim Tshabalala: Shall we go with Funeka first?

Speaker #5: Thank you very much. Maybe let me start by saying that H1 results, and some of it we saw in H2 last year. We, in fact, were affected by three factors.

Funeka Montjane: Thank you very much. Maybe let me start by saying that the H1 results, and some of it we saw it in H2 last year, were affected by three factors, the cyclical factors of endowments. As we said last time, we were also affected by structural issues relating to the cost of funding, specifically in Botswana. In this half, quite material regulatory fee changes in two countries, Zimbabwe and Namibia, where we relatively have higher or bigger franchises around Southern Africa. What is to be done now, I would say three things. The first one, just to really continue to focus on the core transacting franchise. Just continue to stay close to our clients. By the trends that we are seeing that we like, we are seeing a 27% growth in the sales of our existing clients.

Speaker #5: The cyclical factors of endowments, but also, as we said last time, we were also affected by structural issues relating to the cost of funding, specifically in Botswana.

Speaker #5: And in this half, there were quite material regulatory fee changes in two countries, Zimbabwe and Namibia, where we relatively have higher, or bigger, franchises around Southern Africa.

Speaker #5: So, what is to be done now? I would say three things. The first one is just to really continue to focus on the core transacting franchise.

Speaker #5: Just continuing to stay close to our clients. What are the trends that we're seeing that we like? We're seeing a 27% growth in the sales of our existing clients.

Funeka Montjane: We are seeing about an 8% growth in private banking clients. Secondly, as we spoke about earlier, we are seeing about a 40% growth in disbursements of those shorter dated loans, which have a higher ROE. Lastly, the impact of these factors does reflect the need for us to accelerate the work of scaling our franchises, particularly in larger markets. Therefore, there is a lot of work that is underway around inorganic activity, particularly around partnerships that actually really help us to accelerate the build of this franchise. Thank you.

Speaker #5: We're re seeing about an 8% growth in private banking clients. And secondly, as we spoke about earlier, we're seeing about a 40% growth in disbursements of those shorter dated loans which have a higher ROE.

Speaker #5: And then lastly, the impact of these factors does reflect the need for us to accelerate the work of scaling our franchises, particularly in larger markets.

Speaker #5: And therefore, there's a lot of work that's underway around inorganic activity, particularly around partnerships, that actually really help us to accelerate the build of this franchise.

Speaker #5: Thank you.

Speaker #3: Brilliant. Chris, thank you for that question. So the theme for Africa regions is, as we point out, it's about endowment downdrafts. But the way we're dealing with that has been consistent with how we've been sharing our story of this business over the last couple of years.

Bill Blackie: Brilliant. Chris, thank you for that question. The theme for Africa regions is, as we point out, it is about endowment downdrafts. The way we are dealing with that is being consistent with how we have been sharing our story of this business over the last couple of years. That is diversification away from product and client concentration. You can see from the numbers in the pack that we are starting to see the benefits of that diversification. Largely, we are building that diversification around sector capability. The benefits are coming through in terms of you look at liability growth in constant currency of 18%, asset growth, again, in constant currency of 11%, and then client growth to just over 300,000 customers. We are confident that as we continue to move in this direction, we can be less dependent on endowment and NIR specifically.

Speaker #3: And that's diversification away from product and client concentration. You can see from the numbers in the pack that we're starting to see the benefits of that diversification.

Speaker #3: Largely, we're building that diversification around sector capability, and the benefits are coming through. In terms of liability growth, we're seeing constant currency growth of 18%.

Speaker #3: Asset growth again in constant currency of 11%, and then client growth to just over 300,000 customers. We're confident that as we continue to move in this direction, we can be less dependent on endowment income specifically.

Speaker #3: One of the benefits of this diversification, you can see, is in the credit loss ratio, which is at 110 basis points—down significantly from previously.

Bill Blackie: One of the benefits of this diversification you can see is in the credit loss ratio, which is 110 basis points, come down significantly from previously. This would want to continue over a number of years going forward, Chris. Thank you.

Speaker #3: And so, this would want to continue over a number of years going forward, Chris. Thank you.

Speaker #5: The next set of questions are from Jimmy Lert from 361 Asset Management. We note the significant decrease in NPLs across some of the PPB portfolios.

Sarah Rivett-Carnac: The next set of questions are from Jimmy Lowes from 36ONE Asset Management. We note the significant decrease in NPLs across some of the PPB portfolios. Could you talk us through the corresponding trends in stage 1 and stage 2 coverage, particularly whether you have seen any meaningful releases in your performing book provisions as asset quality improved? Given the reduction in NPLs, how should we think about the adequacy and normalization of stage 1 and 2 coverage from here?

Speaker #5: Could you talk us through the corresponding trends in Stage 1 and Stage 2 coverage? Particularly, whether you have seen any meaningful releases in your performing book provisions as asset quality improved.

Speaker #5: And given the reduction in NPLs, how should we think about the adequacy and normalization of stage one and two coverage from here?

Speaker #3: That's a Ziggy Sock question.

Sim Tshabalala: That is a Zukiswa question.

Speaker #5: So three points to make. The first one is just to repeat some of the points that Ana made that what we are seeing in the underlying performance of our book is certainly does point to say that there are both in South Africa and Africa regions the typical clients where we've got large books in which tend to be mass affluent and maybe the top end of middle market are actually showing signs of being robust.

Funeka Montjane: Three points to make. The first one is just to repeat some of the points that Arno made, that what we are seeing in the underlying performance of our book certainly does point to say that there are, both in South Africa and Africa regions, the typical clients where we've got large books in, which tend to be mass affluent and maybe the top end of middle market, are actually showing signs of being robust. Secondly, if you think about a book like mortgages, what we have seen for the first time, a reduction in actual stage 3 provisions. Lastly, our coverage rates have been structurally, I would say, firstly stable, and secondly, higher. As we're starting to see much better performance in the underlying books, we've made sure that we make the same adjustments from a credit impairment perspective.

Speaker #5: And secondly, if you think about a book like mortgages, what we have seen for the first time is a reduction in stage—actual stage three—provisions.

Speaker #5: And lastly, our coverage rates have been, structurally, I would say, firstly stable and, secondly, higher. And as we're starting to see much better performance in the underlying books, we've made sure that we make the same adjustments from a credit impairment perspective.

Speaker #5: This has been an unusual first half because in retail, in our type of business, in the first half you tend to see an increase in credit impairments and not a reduction in credit impairments.

Funeka Montjane: This has been an unusual H1 because in retail type of business, H1, you tend to see an increase in credit impairments, not a reduction in credit impairments. That is what we can see, that from an outlook perspective, we do expect that we will have perhaps a little bit of a higher H2, but not materially so. Definitely less than from the previous year's perspective. My overall message is stability. We see deep in this portfolio, and that is why it is also really giving us confidence to start to do lending from a disbursement perspective. Thank you.

Speaker #5: But that's what we can see. From an outlook perspective, we do expect that we will have perhaps a little bit of a higher second half, but not materially so.

Speaker #5: But definitely less than from the previous year's perspective. So my overall message is stability. We see depth in this portfolio, and that's why it's also really giving us confidence to start to do lending.

Speaker #5: From a disbursement perspective, thank you.

Speaker #3: Thank you, Funeka.

Sim Tshabalala: Thank you, Zukiswa.

Speaker #5: Thank you. The next set of questions are from Ross Cricker from Investec. The first question is in relation to pricing adjustments and transactional fees in Africa regions, which I think we've covered already.

Sarah Rivett-Carnac: Thank you. The next set of questions are from Ross Krieffer from Investec. The first question is in relation to pricing adjustments and transactional fees in Africa regions, which I think we have covered already. The second question is around trading income and CIB Q1, Q2, H2, which again, I think we have covered. The third question, are you able to comment on the potential future financial implications of the offer of purchases within the Liberty Investment property portfolio?

Speaker #5: The second question is around trading income and CIB—first quarter, second quarter, second half—which, again, I think we've covered. And then the third question: are you able to comment on the potential future financial implications of the offer of purchases within the Liberty investment property portfolio?

Speaker #3: Yes. Thanks. Thanks, Ross. I would say that we're in various stages of negotiations and receipt of various offers for the various assets which sit in that Liberty property portfolio. At this stage, as we speak, no definitive agreements have been reached or struck.

Sim Tshabalala: Uresh?

Yuresh Maharaj: Thanks, Ross. I would say that we are in various stages of negotiations and receipt of various offers for the various assets which sit in that Liberty Property portfolio. At this stage, as we know, definitive agreements reached or struck. As those eventuate, and if they do, we will share more details in that regard. Thanks.

Speaker #3: So as those eventuate and if they do, we'll share more details in that regard. Thanks.

Speaker #5: The next question is from Daniel from Ashburton Investments. Could you give a bit more color on Ghana, NIM pressure—specifically, whether this is down to policy rates or more about the OMA rates in 1H26?

Sarah Rivett-Carnac: The next question is from Daniel, from Ashburton Investments. Could you give a bit more color on Ghana NIM pressure, specifically whether this is down to policy rates or more about the OMO rate in H1 2026?

Speaker #3: Doc.

Sim Tshabalala: Doc?

Speaker #2: Yeah, thanks very much. As you would know, the rates in Ghana have increased by around 400 basis points and then there was some OMA rates implications as well.

Arno Daehnke: Yeah. Thanks very much. As you would know, the rates in Ghana have increased by around 400 basis points, then there was some OMO rates implications as well. So the NIM compression is a combination of the two, with the majority of the pressure coming from the rates declines.

Speaker #2: So, the NIM compression is a combination of the two, with the majority of the pressure coming from the rate declines.

Speaker #5: The next question is from Jaco Fisser from Citywire, South Africa. Standard earnings rose by 35%, while AUM also benefited from strong markets. How much of the earnings growth came from net client flows and new mandates, rather than market appreciation and performance fees?

Sarah Rivett-Carnac: The next question is from Jaco Visser from Citywire, South Africa. Standard's earnings rose by 35%, while AUM also benefited from strong markets. How much of the earnings growth came from net client flows and new mandates rather than market appreciation and performance fees? What was Standard SA's net flows for the H1?

Speaker #5: And what were Standard Bank SA's net flows for the first half?

Speaker #3: Yes. Thank you. Thanks for the question. I would say that the majority of the increase has actually come from market growth in the period and less so from net customer cash flows.

Sim Tshabalala: Uresh?

Yuresh Maharaj: Thanks for the question. I would say that the majority of the increase has actually come from market growth in the period and less so from net customer cash flows. Equally, the growth in earnings was supported by a reduction in our re-platforming costs that we anticipated during the course of this year. With regards to net customer cash flows, particularly for this six months, I would say that the business is actually aligned to where the market peers have placed in terms of cash flows, which are slightly negative, considering that we had the last four years of positive net customer cash flows. Thanks.

Speaker #3: Equally, the growth in earnings was supported by a reduction in our re-platforming costs that we anticipated during the course of this year. With regard to net customer cash flows, particularly for this six months, I would say that the business is actually aligned to where the market peers have placed in terms of cash flows.

Speaker #3: Which are slightly negative, considering that we had the last four years of positive net customer cash flows. Thanks, sir.

Sim Tshabalala: Sarah?

Speaker #5: The next question is from Radebe Pamela from Mergents Investment Managers. Good morning. Please may you expand on the current structural hedging program for NRI?

Sarah Rivett-Carnac: The next question is from Radebe Sipamla, from Mergence Investment Managers. Good morning. Please may you expand on the current structural hedging program for NII, the benefits accrued in the period to NII and to NIMs, and the proportion of the balance sheet hedged. Which markets haven't been able to benefit from the hedging program resulting in NIM pressure in those regions?

Speaker #5: The benefits accrued in the period to NRI and to NIMS, and the proportion of the balance sheet hedged. And which markets haven't been able to benefit from the hedging program, resulting in NIM pressure in those regions?

Arno Daehnke: Arno?

Sim Tshabalala: Arno?

Speaker #3: Ana.

Speaker #2: Yeah, that would be mine. Thanks for the question. So, we've hedged predominantly in South Africa, where we've hedged around 60% of the endowment risk, and that has become evident in a very much protected margin in SBSA, and we've disclosed that in our results presentation.

Arno Daehnke: Yeah. That would be mine. Thanks for that question. We've hedged predominantly in South Africa. We've hedged around 60% of the endowment risk, and that has become evident in our very much protected margin in SBSA, and we've disclosed that in our results presentation. It is much more difficult to hedge in Africa regions due to the lack of appropriate hedging instruments. Hence, in most of those markets, our hedges are relatively small and tactical in nature. We do also hedge in offshore operations to the extent that regulations allow us to hedge in those markets, and some benefit has flown through from that as well.

Speaker #2: It is much more difficult to hedge in African regions due to the lack of appropriate hedging instruments, and hence, in most of those markets, our hedges are relatively small and tactical in nature.

Speaker #2: We do also hedge in offshore operations to the extent that regulations allow us to hedge in those markets, and some benefit has flowed through from that as well.

Speaker #5: Thanks. I've got one more question from Radebe. Is there any update that you may share from your engagements with the SAB and other global regulatory bodies on the higher capital requirements and debasal?

Sarah Rivett-Carnac: Thanks. I've got one more question from Radebe. Is there any updates that you may share with your engagements with the SARB and other global regulatory bodies on the higher capital requirements under Basel? Do these higher capital requirements inform the current originate and distribute strategy within CIB?

Speaker #5: And did this do these higher capital requirements inform the current originate and distribute strategy within CIB?

Speaker #2: Yeah, there are slightly higher capital requirements as part of the Basel III finalization regime. We have implemented that now and that's gone live. It's going to be phased in over the next three years.

Arno Daehnke: Yeah. There are slightly higher capital requirements as part of the Basel III finalization regime. We have implemented that now, and that's gone live. It's going to be phased in over the next 3 years. It has not got a material impact on the group or on SBSA, so we can easily align to those requirements while still delivering on our 2028 financial targets. On the originate to distribute strategy adopted by CIB, that continues to allow us to support our clients and underwrite their risk exposures whilst managing the residual risk for the group, and also enhance the return on equity, which we've seen being particularly strong in CIB for this period.

Speaker #2: It has not had a material impact on the group or on SBSA, so we can easily align to those requirements while still delivering on our 2028 financial targets.

Speaker #2: On the originate-to-distribute strategy adopted by CIB, that continues to allow us to support our clients and underwrite their risk exposures, whilst managing the residual risk for the group, and also enhance the return on equity, which we've seen being particularly strong in CIB.

Speaker #2: For this period.

Speaker #5: The next question is from James Stark from R&B Morgan Stanley. Regarding ICBCS, please can you comment on the repeatability of the first-half performance into the second half of 2026, and also can you comment on any risks that you're aware of in terms of ICBC or ICBC earnings as posed by any exposures to Radiant World?

Sarah Rivett-Carnac: The next question is from James Starke, from RMB Morgan Stanley. Regarding ICBC Standard Bank, please can you comment on the repeatability of the H1 performance into H2 2026? Can you also comment on any risks that you are aware of in terms of ICBC or to ICBC earnings as posed by any exposures to Radiant World?

Speaker #2: Yeah, on Radiant World, we won't comment on that. That is proprietary information. Look, it's been a very strong print in the first half for ICBCS.

Arno Daehnke: Yeah. On Radiant World, we will not comment on that. That is proprietary information. Look, it has been a very strong print in the H1 for ICBC Standard Bank. They have exceeded their budgeted prints for the H1. We are not anticipating as strong a print for the H2, but let us see how it goes.

Speaker #2: They have exceeded their budgeted prints for the first half. We are not anticipating as strong a print for the second half, but let's see how it goes.

Speaker #5: And then one more question from VCL, congratulations on your results. What is the outlook by the bank on African markets with particular insights on Kenya and Ethiopia regarding the bank's strategic expansion in these regions?

Sarah Rivett-Carnac: Then one more question from VCL. Congratulations on your results. What is the outlook by the bank on African markets with particular insights on Kenya and Ethiopia regarding the bank's strategic expansion in these regions? Secondly, is the 5% stake acquisition in Nedbank announced through the SENS earlier in the year a strategic acquisition or just an associate stake?

Speaker #5: And secondly, is the 5% stake acquisition in Nedbank announced through the Sains earlier in the year a strategic acquisition or just an associate stake?

Speaker #3: Ana, you can take both. All right, I'm looking forward to answering the second question. Anyway, on question one, there are many markets which are attractive to us.

Sim Tshabalala: Arno, you can take both.

Arno Daehnke: All right. Looking forward to answering the second question. On question 1, there are many markets which are attractive to us. We mentioned Angola, we mentioned Tanzania. Kenya remains a high-growth environment, and we continue to invest into that market as well and have got an excellent team and strong growth prospects in that region. Overall, in East Africa, we are number 3 now, and that comprises also the very strong franchise, number 1 franchise we have in Uganda. East Africa is attractive, but as Sim would say, we also find West Africa at the moment quite attractive. Markets like, as I mentioned already, Angola, but also specifically Nigeria, are also very attractive for us. We continue to invest in those. Very importantly, let me just make this really clear.

Speaker #3: We mentioned Angola, we mentioned Tanzania. Kenya remains a high-growth environment, and we continue to invest in that market as well, with an excellent team in place.

Speaker #3: And strong growth prospects in that region. Overall, in East Africa, we are number three now, and that comprises also the very strong, number one franchise we have in Uganda.

Speaker #3: So, East Africa is attractive, but as Sim would say, we also find West Africa at the moment attractive, and markets like, as I mentioned already, Angola, but also specifically Nigeria, are also very attractive for us.

Speaker #3: So we continue to invest in those. Very importantly—okay, let me just make this really clear—we do not have a strategic acquisition or an associate stake in Nedbank, and we have no intention to do so.

Arno Daehnke: We do not have a strategic acquisition or an associate stake in Nedbank Group, and we have no intention to do so. This SENS we had to release probably 2 or 3 months ago was related to an underlying client position. If that is more than 5%, there is a requirement that we have to release a SENS on that. Since then, that is reduced to less than 5%, so that client position is not the case anymore. But there is no strategic stake or associate stake in Nedbank Group or in any of the other banks in South Africa.

Speaker #3: This sense we had to release probably two or three months ago was related to an underlying client position, and if that is more than 5%, there is a requirement that we have to release a sense on that. Since then, that's reduced to less than 5%.

Speaker #3: So, with that, the client's position is not the case anymore. But there is no strategic stake or associate stake in Nedbank or in any of the other banks in South Africa.

Speaker #5: Thanks. Maybe one more question, going back to Chris Stewart from '91. Yaresh, with regards to the insurance attribution, of up to 1% as reflected in the banking operations, could you elaborate on the claims experience that resulted in this lower performance?

Sarah Rivett-Carnac: Thanks. One more question going back to Chris Stuart from Ninety One. Yuresh, with regards to the insurance attribution of up 1% as reflected in the banking operations, could you elaborate on the claims experience that resulted in this lower performance?

Speaker #3: Chris, I think I've covered it earlier. With reference to the size of the book and the seasonality of what we experience, or the cyclical nature of the book.

Yuresh Maharaj: Chris, I think I have covered it earlier with reference to the size of the book and the seasonality of what we experience of the cyclical nature of the book. I think that adequately covered it earlier.

Speaker #3: So, I think that adequately covered it earlier.

Speaker #5: That's all we have. Thank you, Sim.

Sarah Rivett-Carnac: That's all we have. Thank you, Sim.

Speaker #3: Thank you very much. If there are no more questions—and there are none—we've come to the end of today's proceedings. Thank you for your time and your interest.

Sim Tshabalala: Thank you very much. If there are no more questions, and there are none, we've come to the end of today's proceedings. Thank you for your time and your interest. Thanks, folks.

Q2 2026 Standard Bank Group Ltd Earnings Call

Request TrialDemo

Standard Bank Group

Earnings