In a March 2023 interview with Bloomberg, Patrick Mweheire, the Standard Bank Group Regional Chief Executive for East Africa, told of the Group’s ambitions for the Kenyan market, revealing that the Group was looking to make a major acquisition by 2025, a milestone if achieved, would propel Stanbic Kenya to the top three banks in the country.
As regional East African Chief, Mweheire’s jurisdiction covers Kenya, Uganda, Tanzania, Ethiopia, Malawi and South Sudan.
Standard Bank Group through Stanbic Africa Holdings Limited, owns 70.53% of Stanbic Holdings Plc Kenya, which in turn owns 100% of Stanbic Kenya Limited, alongside other subsidiaries⏤ 100% of Stanbic Insurance Agency Limited and SBG Securities Limited.
“We have aspirations to be a top three bank in Kenya,” Mweheire told Bloomberg, adding: “Number six is not acceptable. Within 12 months we would have identified and would have started having negotiations with someone”.
Mweheire’s ambitions echo those of his boss, Standard Bank CEO Sim Tshabalala who in another Bloomberg interview said that the Group was seriously looking to deepen and strengthen its presence in the strategically important Nigerian and Kenyan markets.
“If there was an appropriately priced asset with acceptable risk, we would definitely look at acquiring,” Tshabalala said.
Standard Bank Group, although Africa’s largest bank by assets⏤ USD160.6 billion, as of H1 2023 and operating in 20 African countries⏤ has faced stiff resistance from local banking groups in the region such as Equity Group, KCB Group, NCBA Group as well as its South African arch-rival Absa Group.
Although Mweheire remains tightlipped on the exact date of closure as well as which bank, according to our sources, “a deal is very close”.
While Standard Bank is yet to close the game-changing Kenyan deal and hopefully propel itself into the top three banks in Kenya, there are all indications that Mweheire has at least, from a regional pound-for-pound perspective been able to lead and propel Standard Bank, into the region’s Number 3 banking Group, in the three years he has been at the helm of the region.
According to figures available to us, as of H1 2023, Standard Bank Group subsidiaries under its East African Region combined, ranked 3rd by assets with USD7.5 billion in assets, behind KCB Group (USD13.3 billion) and Equity Group (USD11.7 billion). In the 4th and 5th positions respectively, are Tanzania’s CRDB Bank Plc (USD5.4 billion) and Absa Group (only East Africa) at USD5.3 billion.
Revenue-wise- Standard Bank Group East Africa, at USD466 million, is also in the number 3 position, behind Equity Group (USD590 million) and KCB Group (USD520 million). In the 4th and 5th position are Absa Group (USD311 million) and Tanzania’s NMB Bank Plc at USD288 million.
Looking at net profit, Standard Bank Group East Africa comes in strong in the second position, at USD154.2 million, after Equity Group’s USD187.4 million. In third place is KCB at USD114.3 million and NMB Bank Plc and Absa Group at USD112.6 million and USD89.9 million respectively.
Looking at the above numbers and putting into perspective the performance of the Kenyan banking industry, there is no prize for guessing that to meaningfully propel itself in the top 3 Kenyan banks, Standard Bank Group would have to acquire some of its closest local competitors such as NCBA Group, the Cooperative Bank of Kenya, NCBA Group, Diamond Trust or I&M Bank Plc. The other two close competitors⏤ Standard Chartered Bank and Absa Bank may not be up for sale.
Given that the gap in assets between Standard Bank Group East Africa and the top two banking Groups in the region is between USD4.2 billion and USD5.8 billion, should the acquiree be such prized fish such as NCBA (assets: USD4.7 billion) or even Cooperative Bank (assets: USD4.4 billion) or Diamond Trust Bank (assets: USD3.8 billion), sealing this deal could easily see Standard Bank Group unseating Equity Group as East Africa’s second largest banking Group.
And Standard Bank Group has the wherewithal to easily pull off that move, provided there is a willing seller. First, it is Africa’s largest financial Group. The Group in 2022 reported a net profit of USD 2.12 billion on assets of USD 155.4 billion. If H1 2023 results are anything to go by ⏤ headline earnings of USD1.2 billion and total assets of USD160.6 billion⏤ the Group is on course for another good 2023. Backed up by deep-pocketed shareholders such as the Industrial and Commercial Bank of China (assets: USD6.1 trillion as of H1 2023) the planned Kenyan acquisition should come off easily.
East Africa is our home, and we drive her growth⏤ with local talent
But while the who and when of the acquisition remains a subject of speculation, what is at least clear is that Mweheire who was appointed to the East Africa Regional Chief Executive role in March 2020, wants to run this race to the top with a fine breed of home-grown talent.
Himself, he is a man of many firsts⏤ he was the first Ugandan Chief Executive of Stanbic Bank Uganda, since 1991 when the Standard Bank Group acquired Grindlays Bank and renamed the Ugandan subsidiary, Stanbic Bank (Uganda) Limited. The Harvard-trained banker, presided over Stanbic Bank Uganda’s rosiest 5 years, nearly doubling assets from UGX3.7 trillion in 2015 to UGX6.7 trillion as of December 2019.
This propelled him to the East Africa Regional Chief Executive Role, again being the first Ugandan to hold the role; one of the topmost within the Standard Bank Group. Mweheire replaced Greg Brackenridge, a retiring South African banker.
“Patrick’s exemplary leadership has steered the growth and success of Stanbic Bank as the largest commercial bank in Uganda and sustained the bank’s leadership position in the market. Patrick has been instrumental in the transformation of the organisation and remains influential in contributing to the growth of the financial sector in Uganda and across the East African Region. During his reign, over and above driving the Group’s growth in the region, Mweheire has also surrounded himself with a team of homegrown and experienced chief executives in this race to the top,” the Group said of his appointment at the time.
To replace Mweheire at Stanbic Bank Uganda, the Group’s anchor subsidiary, Standard Bank recruited Anne Juuko, a Ugandan-bred all-around banker. Anne, who joined the bank in March 2020, has in these four years, grown the bank’s assets by 40.3% from UGX6.7 trillion in 2019 to UGX9.4 trillion as of H1 2023.
In November 2022, the Group recruited Joshua Oigara, a Kenyan banker and ex-KCB Group CEO, to take on the Stanbic Bank Kenya & South Sudan Chief Executive Role. Mr. Oigara, replaced Zimbabwean banker, Charles Mudiwa who led Stanbic Kenya from January 2018 to December 2022.
A year before that in January 2021, Phillip Madinga a Malawi-grown banker was elevated from the Head of Personal & Business Banking role to Chief Executive of Standard Bank Malawi, replacing William Le Roux, another retiring South African banker that got appointed to the board director role within the Group’s subsidiaries.
In October 2023, Manzi Rwegasira, an indigenous Tanzanian investment banker who spent some time working at UBS Investment Bank, Bank of America Merrill Lynch and Barclays in the UK, as well as the London Stock Exchange Exchange Group, before returning home was appointed Chief Executive for Stanbic Bank Tanzania. Before being elevated to the Chief Executive role, he had worked as Head of Investment Banking before being elevated to Executive Director as well as Head of Corporate and Investment Banking. Manzi, replaces Kevin Wingfield, a South-African-born banker who took a Head East and West Region, Personal and Private Banking, Africa Regions role within the Group.
Just this week, to crown it off, theStandard Bank Group has named Francis Karuhanga as its new Chief Executive for Stanbic Uganda Holdings (SUHL) (assets USD 2.5 billion as at H1 2023), the Ugandan listed entity under which Stanbic Bank, Uganda’s largest bank is operated. SUHL is also the holding entity for the Group’s four other subsidiaries—Stanbic Properties Limited, SBG Securities, Stanbic Business Incubator, and FlyHub.
Francis Karuhanga replaces Andrew Mashanda, a Zimbabwean-born banker, who is being reassigned to the Group.
Away from the Kenya acquisition, the Group also looks to extend its presence in Ethiopia where it has a representative office. Ethiopia will issue up to five banking licenses to foreign investors in the next five years, part of plans to open up the financial services sector to foreign competition, a senior central bank official said on Wednesday.
Prime Minister Abiy Ahmed’s government has promised to open up sectors previously controlled by state firms to help drive foreign investment inflows and economic growth. Ethiopia’s Deputy Central Bank Governor, Solomon Desta was quoted recently by Reuters, saying that the Central Bank expects to “give three to five licenses within five years.”
Tshabalala told Reuters that Ethiopia offers a big opportunity for expansion.