Standard Bank is firmly focused on sectors driving economic growth in Africa, says Anne Aliker
With a strong presence in some twenty markets, Standard Bank stands out as one of the largest banks in Africa by way of assets. For Standard Bank, Africa is home, and we drive its growth, says Anne Aliker, Standard Bank’s Group Head, Corporate and Investment Banking, Client Coverage. Fielding questions from PAV on the sidelines of the 20204 US-Africa Business Summit in Dallas, TX, Anne Aliker says from energy, infrastructure, financial institutions, telecoms, media and technology and more, Standard Bank is firmly focused on sectors driving economic growth in Africa.
For those who may not be familiar with Standard Bank, could you start with an introduction for us?
I like that question because it helps us frame a lot of the rest of the discussion. So, Standard Bank is Africa's largest bank by way of assets, I think that's an important thing. And we are very unapologetically an African bank. We don't have aspirations to be a global bank. We are a very good African bank that is where our experience is, and that is where we focus. We have a presence in 20 markets in Africa, primarily Sub-Saharan Africa, and across Africa.
We do the whole suite of banking, all the way from your retail account, so that's what we call our personal, our private bank, the SME segment, we call that our business and commercial bank, and then our corporate investment bank where we deal with the larger corporates, the sovereigns, and we do investment banking and the entire suite of banking.
So, we're pretty active, we have a significant global markets business. I think the opportunity, the insight we obtain in working across all those different markets, it means that we have practical experience, and we're able to help our clients who are in those markets, both work in their domestic situation, connect to markets, customers outside of their country. Very importantly, we also have a presence in four global centres, and these are all what I call centres of capital.
We have a presence in North America, and you will know America is a very large source of capital in the world, we have a presence in London, and London has historically been one of the largest financial centres, but that gives us access to Europe, we have a presence in Dubai, the Middle East is a growing centre of capital, and we have a presence in Beijing, and the Far East is another very active economic region.
Our presence outside of Africa is really designed to enable us to support those companies who are based elsewhere but have operations on the continent, and it's important for them that they have a trusted partner on the continent who understands how the continent works, but also understands how business works in the US, in Europe, in the Middle East, and can both navigate and interpret to enable them to deliver on their strategic imperatives.
Looking at the present-day African context, how will you situate the importance of Standard Bank on business and the general economic development of Africa?
Let me start with our purpose and our vision. We say Africa is our home, we drive her growth, and it is a phrase and a statement that we're not cynical about, and it's really important. If you just step back a little bit, it talks about why we operate on the continent and why we've decided to stay there. It is our home, and I believe quite strongly that financial institutions almost operate as a private-public good and have a purpose that connects you to the economy and the people and the geographies in which you operate. That’s important because you know why it's important. It also helps you when you're making any trade-off decisions.
When you happen to decide whether to do one or two or three, you can refer to your purpose and that will help you. And that speaks to why Standard Bank is important in Africa. One, it's directly about our purpose. It means that in Africa, on the continent, we focus on the sectors that drive the economic growth of the continent.
So, energy, infrastructure, financial institutions, telecoms, media and technology, that's been a fast-growing industry all over the world. Mining and metals. So, your American readers will be familiar with the fact that Africa has a huge wealth of resources and deposits, particularly copper and cobalt, the critical minerals that are used for the batteries. Consumer and I always think of consumers farm to pork, everything you do from the farming area to what goes into your mouth. So, we focus on those sectors because those are the sectors that are driving the growth of the economies in which we operate. But interestingly, also the sectors that provide the greatest opportunity for inward investment too.
In terms of the services that you provide, how accessible are there to investors, for people to benefit from opportunities with Standard Bank? How easy is that?
If we're talking about companies and individuals who live and work in the geographies in which we have banking licences and which we have banking operations, then they're very accessible; because that's our core business, that's what we do. And our ability to attract clients is quite important to our growth and our success. And if you look at our performance over the last three years, it would suggest that we have been able to meet the needs of our clients.
When you’re talking about investors outside of Africa, people who want to invest in Africa, then Standard Bank is a great intermediary and conduit for that. And I think that's because often they'll be banking with someone else in their home market. You might have readers who want to send money home. They could use very different apps, fintechs and other parties to do so. But once that money hits the continent, often those intermediaries will use Standard Bank, one, to convert the hard currency to local currency, and secondly, to ensure that the final beneficiary receives money. That, I think, is access to our services.
For the companies, for the large corporations who set up subsidiaries in Africa, if they need financing, if they need transactional accounts, if they need to be able to convert local currency to U.S. dollars or U.S. dollars to local currency, then those are all services that Standard Bank provides and are accessible to clients, irrespective of whether clients are actually on the continent or are based elsewhere, but operate, have operations in Africa.
As the African continental free trade area gets its act together, what role do you think banks like Standard can play to catalyze stronger growth and economic integration in Africa?
We're excited by the possibility and the opportunity that the African continental free trade agreement provides for the continent. I think the creation of a common market, of a single market on the continent that drives trade, trade and investment will drive growth and profitability and economic growth for the entire continent. Once again, I refer you back to our purpose, Africa as a home, and driver of growth.
Now, what role can Standard Bank play there? Because we operate in so many markets, to drive trade, you need a financial intermediary. Someone needs to settle. You need to be able to buy goods and settle them. You need to be able to have access to money to invest in a new market. It's useful, and I think important, to have a bank that is operating in so many different geographies to provide that to any party who's trading across the continent.
We're already there. These are not markets that we are starting to learn. We have invested the time. We understand how these markets operate. We are already operating in those markets, in those industries, in those sectors. We, I think, will be a very effective and important partner for anyone who wants to take advantage of the African Continental free trade agreement.
In terms of challenges that the bank has faced, any that you want to share with us?
I think it's the second time I've had that question in a different form this week. As I reflect on that, one of the things I think about is, are the challenges different when I operate in Africa as they would be if I operate in Europe? I think the response I often give to that is, we operate on the African continent. Now, often what is seen as a challenge is a question of perspective.
If you are used to operating out of New York, then it can be daunting to think of operating in a market where you've got 26 different local currencies and you are working in all of them at the same time. That is our bread and butter. That is a capability that we have built, that we have invested in and that we’re good at. That stops being a challenge and becomes more of an opportunity. One could then also say that the differences in infrastructure investment on the continent create a challenge. That is a significant challenge for our clients, but only where they want to export between one market and another.
For us as a bank, we rely on digital infrastructure. The growth of the telecoms industry across the continent; and the growth of development of data centers and cloud storage eases that. Once again, there's an opportunity. I think, much like any other business, we operate in the context of a geography in which we find ourselves. I see that as less of a challenge than simply the environment in which we operate. If I look at our performance over the last few years, I think there's more opportunity than challenges.
If I were to say that, the last thing I would suggest to anybody who's looking at the continent as granular is that there's an opportunity for anyone willing to invest the time to do their work, to understand the environment, and importantly, to understand what solutions their clients need.
For foreign companies and entities that want to invest in Africa, Standard Bank is a great intermediary and conduit for them, says Anne Aliker
We are doing this interview on the sidelines of the USA-Africa Business Summit in Dallas, Texas; any impressions from that?
The first one is I didn't realize Dallas was such a big economy. I'm extremely impressed. That's one, but it's more about where we found the summit as opposed to the summit itself. I do have an impression that there's a lot of interest that has been demonstrated from U.S. companies, and the U.S. government, in actually supporting the growth of investment and trade ties between the U.S. and the African continent. That's important because the U.S. is a big market and is potentially a very big trade partner.
If you look at the statistics over the last few years, the U.S. trade with Africa has reduced in percentage terms. In nominal terms, it has grown. I think we shouldn't lose the visibility of the fact that it has grown. Now, it's not necessarily a bad thing. That has simply happened because other economies have grown.
We're in a continent where 25 per cent of the youth population will be African. We are a growing consumer market. I think it's important that we have trade and investment ties with other large economies. I'm getting a sense that there's a lot of interest and there's action behind the work, so it's not merely a sentiment.
To potential investors and partners who are still nervous about Africa, from someone who knows the continent inside out, what message do you have for them?
I think that the easy answer would be to look at Africa and give it a go. The reality is it depends on your industry. If you're looking for a market that is a consumer market and you have products and goods that can be manufactured on the continent to address that particular market, do so. There are some incredibly successful companies on the continent, very well run. We're a growing economy where there's a lot of investment going into energy. That really ought to be an opportunity.
I think pretty much anything that is going to be supported by the growth of the population. But it takes work, and that's no different in Africa than it is in any other geography. I think there are very, very few industries where you can go in, not work hard, not do the granular, not make the granular decisions that need to be made and expect to be successful. One should expect that going into the African continent that the work, you must do the work. You must understand where in the continent you want to start.
We often say that Africa is not a country. That is very, very true, in the same way that the U.S. is not one state. The states are different. They have a different underlying economy. They have a slightly different way of doing business. The things that will make you successful in Texas may be a little different from the things that make you successful in upstate New York.
Let's look at perspectives in Africa going forward, making projections as bankers do, looking at the continent, what makes you optimistic, and what are your fears or in what areas do you think the continent needs to improve?
Let me start with where we need to improve. We have a whole host of areas where we need to improve. I'm not hesitating because I don't know, but because I'm talking about very many different countries, and they all have slightly different areas where they must improve.If there would be some broad themes, definitely infrastructure.
If you think of the map of the continent, and if you were to overlay that map with the road network and the rail network, you'll find it goes around the coast. What that means is there needs to be more investment in infrastructure across the continent which will enable goods and services to move and that's the African Continental Free Trade Agreement. So, we're seeing a lot of investment into that. It's still an area where we need to move because you're creating and building infrastructure across more than one country, so the ability to have a multi-country project possibly with consistent policies underpinning it, I think that's an area of improvement. Hopefully between the African Continental Free Trade Agreement and the AU, we'll see more of that.
I think the increased liquidity as countries trade businesses in one country and sell to businesses in another country, will be increased trade and increased liquidity in the local currency markets. I think the ease with which we convert from one kind of currency to another rather than via the US dollar or the Euro, I think that needs to improve, but I think it also provides an opportunity. Policy consistency is one we often talk about, and I think this is true in every single geography, I don't think it is specific to Africa.
But you asked me why am I optimistic. Firstly, if we look at the last ten years and look at the growth that has been achieved, there is a track record that underpins the reality of that hope, and it's just worth reflecting on. So, we know some of the largest, fastest growing economies in the world are from Africa, but we also know they're coming from a low base. That doesn't mean that the growth isn't transformational, it means it's real and it does have an impact. So that gives me hope.
We have a growing population of young, work-aged people. Young, work-aged people work, and they become innovative. That gives me hope. And these are real things that are happening. When you look at the changes in purchasing power across the continent, whilst in one sense you can say it's still relatively poor, you can see that the middle class is growing. Whilst the numbers might look small, the percentage growth is quite dramatic.
So, when you take a step back again and you see the successful companies and then you overlay that with the percentage growth of the middle class, irrespective of where they sit on that spectrum that gives me hope. And we see all of this reflected in the growth of transactions in the banking sector of the continent.
