Standard Bank: from retrenching back to recruiting

Last year Standard Bank shocked the market by announcing nearly 2,000 redundancies mainly at head office to save R500m in staff costs and warned annual earnings would fall by as much as 12%. Today, presenting better than expected results (profit fell 4%), Ceo Jacko Maree said that the bank is "in good health."

The bank's "a clear growth path" involves "building robust banking systems for Chinese clients in Africa," Maree said. SB is 20% owned by the Industrial and Commercial Bank of China. Africa now becomes the sole focus: "Standard Bank no longer has ambitions to buy or build additional domestic businesses in markets outside of Africa," the Ceo announced today.

So despite the cost-cutting the bank, says Maree, SB is still "investing in people, branch networks and systems in chosen markets in Africa." Which is why South Africa's largest bank is now busy beefing up its stockbroking arm in order to expand its services across the continent.

The decision to grow the newly-renamed SBG Securities follows the end last year of the joint brokerage business with Credit Suisse, which in four years had grown its market share to 9%.

SBG Securities has just made several high-profile hires bringing up to 12 the number of analysts based at its Johannesburg head office and is planning more later in the year.

"These new appointments represent the key areas for expansion of our business on the continent and provide SBG Securities with further sector insights across our equity broking businesses in South Africa, West Africa, East Africa and Turkey," says Marc Ter Mors, SBG Securities' head of research. "With these appointments we are moving closer to achieving our objective of being the go-to broker for sub-Saharan Africa."

Ross Elliot has been poached from JP Morgan to become head of equity sales and will also be responsible for marketing local products to the broader European investor base. Jonathan Kennedy-Good, who was a top-rated analyst at Investec Securities, becomes telecommunications analyst and head of technology, media and tlc. Jennifer Henry has left Nedcor Securities to join SBG and will be responsible for coverage of the media, electronics and IT sectors.

Monique Swartz, who was working for mining company African Rainbow Minerals, joins as resources strategist, a key sector for the group: "Resources present an incredible opportunity for Africa's economic development and is one of the largest global sectors," says Mr Mors. "SBG Securities can differentiate its client offering by bringing together commodity market insights with the knowledge from its various regions to establish point of view on regional companies."

Adriaan du Toit will head the South African economics research unit and advise fixed-income and equity institutional investors on macro developments and finally Hennie Loubser has been hired as the new small and mid-cap analyst. Standard Bank's former partner Credit Suisse is also setting up its own brokerage business and developing an integrated equities business offering research and investment in South Africa.