Standard Bank Group holds 20% market share of South Africa’s public sector banking


Standard Bank Group continued making significant strides in providing banking services to the South Africa public sector by adding 10 new municipalities and other government entities to its books during the first eight months of 2012.

Of South Africa’s more than 280 local and district municipalities, this means Standard Bank now provides banking services to close to 20% of the market. Standard Bank Group already banks a third of the country’s provinces – the Eastern Cape, Mpumalanga and the Northern Cape – putting it firmly on track to reach the ambitious targets it has set itself to grow market share in the sector.

Bongi Kunene, head of public sector banking at Standard Bank Group, says the group has almost doubled its market share in just under two years and attributes this success to its revamped approach to this market now beginning to pay off.

“Every new business relationship with the public sector is important to us because we are building partnerships with government institutions so that we become solution-providing bankers to them. We hope to play an important part in service delivery at all times,” says Ms Kunene.

Since the beginning of 2012, the new local and district municipalities acquired are:

Thaba Chweu Local Municipality in Mpumalanga;
Eden District Municipality and Mossel Bay Municipality, both in Western Cape;
Frances Baard District Municipality; John Taolo Gaetsewe District Municipality; Hantam Local Municipality, and Phokwane Local Municipality all in the Northern Cape, and;
Sekhukhune District Municipality in Limpopo.
Also acquired in the year to date were Oranje-Riet Water User Association in Free State and the Eastern Cape provincial government.

The latest acquisitions come on top of winning several significant mandates to bank a variety of public sector entities, including regulators and state boards over the past year.

In addition, Standard Bank has advanced funding of millions of rand to various local municipalities and is processing several applications for similar loan facilities, especially from local municipalities that need to fund development of their service delivery infrastructure.

All the new clients are a significant boost to Standard Bank Group’s position in the public sector market, and give it a strong platform to grow to its desired target share of the market for banking services, investments and lending.

“We have invested time in reorganising our approach to this market and we are certainly gaining a lot of ground in banking, lending and providing investment solutions to the public sector,” Ms Kunene says.

“There is also a growing appetite from public entities to borrow funds for infrastructure development. Standard Bank is clearly ready to do business with the public sector and is committed to playing its part in the funding of infrastructure. We realise that government alone cannot meet the full funding needs for the full scale infrastructure needed in our country.”

Ms Kunene says that Standard Bank Group’scommitment to deepening its relationships in the public sector is demonstrated by the focus on expanding their public sector business unit with people who are practitioners in public finance. “We pride ourselves in understanding regulations and financial rules intimately which makes Standard Bank effective in responding to the sector,” she says.

Some of the other key public sector businesses Standard Bank added to its public sector portfolio last year alone include: Nelson Mandela Metropolitan University (NMMU) bank account; the Amathole District municipality; Mogale City; Modimolle and Metsimaholo local municipalities in Limpopo and Free State respectively; the National Gambling Board; the National Ports Regulator; and the Mpumalanga and Free State provincial governments.

Ms Kunene says Standard Bank Group is optimistic about landing several of the public sector mandates for which it has put in bids. She says Standard Bank Group has the balance sheet and the expertise to meet the requirements of local government to fund infrastructure projects.


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