Standard Bank Group, Africa's biggest lender by assets, on Thursday forecast annual headline earnings per share growth of between 8% and 12% for the 2026-2028 period.

The South Africa-based banking giant outlined a comprehensive three-year roadmap at its Capital Markets Day, with the bank targeting revenue growth of 7% to 10% per year while maintaining a return-on-equity range of 18% to 22%. Management said the macroeconomic outlook across its network was supportive, with declining interest rates, lower inflation and higher real GDP growth expected, though it was concerned by the conflict in the Middle East.

DIVIDENDS AND CREDIT

Standard Bank also set a dividend payout ratio target of 45% to 60% for the medium term, supplemented by share buybacks where it makes economic sense and the group has excess capital. Since 2022, 40% of the R170 billion of earnings generated has been retained for growth and 60% distributed to shareholders as dividends and share buybacks, a balance the group expects to continue.

The bank's credit strategy remains conservative, with management targeting a credit loss ratio—a measure of credit impairment charges relative to average loans—within a range of 70 basis points to 100 basis points in the medium term. The group expects its credit loss ratio to remain in the lower half of that range.

AFRICAN EXPANSION ACCELERATES

Standard Bank's strategic framework rests on deepening its presence across Africa. The lender derives income from retail and commercial banking alongside corporate and investment banking. The group said it would direct incremental capital towards East and West Africa, where large profit pools exist and it does not yet have a top-three market position.

Costs are expected to grow by 6% to 8% a year, with investment in client-facing skills, digital channels, cloud migration, AI and payment capabilities. Management expects positive operating leverage each year, with the cost-to-income ratio (50.2% in 2025) declining and managed sustainably below 50%.

CAPITAL STRENGTH UNDERPINS GROWTH

Capital adequacy remains a cornerstone of Standard Bank's strategy, with the bank targeting a Common Equity Tier 1 ratio above 12.5%. The group said it would also retain capital for acquisitions that buy scale in existing markets or enter new ones, preferring a series of small to mid-size deals.

Within the group, Corporate and Investment Banking set an ambition of R100 billion in revenue by 2028.