In its continued drive to sustainable financing, financial services provider Standard Bank has announced that it will, going forward, publish a Task Force on Climate-related Financial Disclosures-aligned report along with its yearly environmental, social and governance report.
CEO Sim Tshabalala said during the company’s results presentation on March 11 that the pandemic had “drawn a sharp dividing line in our society, with a pre-pandemic and post-pandemic line. It had forcefully reminded society of its reliance on the environment”.
“We will see an increase in demand for financial products that support a sustainable economy,” he noted.
The company continued to focus on sustainable solutions, with 21% of its total group funding raised going toward sustainable finance in 2020, for a total $385-million, while the bank issued $200-million worth of green bonds in sub-Saharan Africa.
The bank had continuously worked with the Banking Association of South Africa and the National Business Initiative to understand climate risks and adjust its approach accordingly.
It scored 60% in 2020, up from 51% in 2019, in the SAM Corporate Sustainability Assessment and ranked fifty-third in the Global 100 Most Sustainable Corporations in the World, and was the only African company in the top 100.
Standard Bank in 2020 published a Fossil Fuels Financing Policy, in which it committed to only make funds available to clients who commit to reducing their greenhouse-gas emissions.
It also stated that it would not fund any new coal-fired power plant projects, but would continue to provide finance to thermal coal mining projects and companies that meet certain criteria.
Further, Standard Bank has declared a dividend of 240c apiece, on the back of R15.9-billion of headline earnings, in the year ended December 31, 2020.
This compares with a dividend of 994c apiece declared in the prior year, and R28-billion of headline earnings generated.
The company said the latest results reflected the difficult operating environment that prevailed in South Africa and abroad, with Covid-19 having placed considerable strain on retail, business and corporate clients.
The bank in 2020 provided about R130-million of payment relief to small business clients, as well as individual customers.
Standard Bank did expect global gross domestic product to rebound in 2021, underpinned by vaccine-fuelled improvements in confidence, demand and trade.
The bank said a world awash with liquidity and stimulus should drive global risk-on sentiment and emerging market inflow.
The global recovery is, however, likely to be uneven across different regions. The International Monetary Fund forecasts 3.2% gross domestic product growth in sub-Saharan Africa.
The bank believes the African economy will have a delayed recovery into 2022, owing to a lack of resources and capabilities to effectively roll out vaccines.
In South Africa, Standard Bank expects the recovery to also span over multiple years, while inflation is likely to remain with the South African Reserve Bank’s target range and interest rates at current low levels for the duration of 2021; the latter of which should support credit growth.
These kinds of recoveries would bring opportunity for the bank to extend its balance sheet, facilitate business and consumer activity, as well as continue building the franchise.
As the group continued to respond to the evolving needs of its clients and employees, it was accelerating the implementation of its future-ready strategy.
From January 1, Standard Bank had changed from a traditional business line-led structure to a client-led model with three core client segments, namely consumer and high net worth, business and commercial and wholesale clients.
This would better enable and support the group’s ambition to be “truly digital and truly human”. In addition, in a fast-changing world, the bank recognised the need to adapt to evolving risks, optimise resource allocation and drive returns.
“In doing so, we would leverage our core strengths in financial services, while seeking new ways to expand our offering and diversify our revenue streams further,” Standard Bank noted.
Meanwhile, Standard Bank had been awarded the accoladed of a silver award in the global Small, Medium-sized and Microenterprise (SME) Bank Awards category of SME Bank of the Year for 2020.
As the only South African financial service provider chosen as a nominee for the renowned awards, Standard Bank has received recognition for its efforts in supporting local SMEs during the Covid-19 pandemic.
The silver award is awarded to financial institutions that have proven and demonstrated compassion and support for SME clients that were severely impacted by the economic devastation of the pandemic.