Standard Bank share price target and broker ratings post FY23 results

Key takeaways from FY23 results:

1. Strong Financial Performance: In fiscal year 2023, the group recorded a remarkable 27% increase in headline earnings, reaching R42.9 billion, and saw an improvement in return on equity to 18.8% from 16.3% the previous year, signifying robust business growth and momentum, with a significant contribution from the African Regions franchise.
2. Growth in Digital Banking and Customer Engagement: The group experienced a noteworthy expansion in its banking franchise, with active customers growing by 6% and digital retail clients in South Africa increasing by 8%. This growth is underpinned by a 30% year-on-year increase in digital transactions, demonstrating the group's successful transition to digital channels and enhanced customer satisfaction.
3. Commitment to Sustainable Finance and Energy Solutions: The group mobilized over R50 billion of sustainable finance for corporate clients in 2023 and provided substantial support for alternative energy solutions, highlighting its dedication to sustainable development and responsible banking practices.
4. Challenging Operating Environment with Positive Outlook for 2024: Despite a challenging operating environment marked by global uncertainty, inflationary pressures, and monetary policy adjustments in 2023, the group anticipates a more favorable economic landscape in 2024, with expectations of global and regional growth, potentially softer inflation, and easing interest rates.
5. Strategic Priorities and Dividend Declaration: The group remains focused on delivering against its strategic priorities, including driving organic growth, investing in its businesses, and prioritizing sustainable finance. It also declared a final gross cash dividend of 733.00 cents per ordinary share for FY23, reflecting its strong capital position and commitment to rewarding shareholders.

Comments on Standard Bank FY23 results

In FY23, the Standard Bank Group achieved a solid performance with headline earnings increasing by 27% to R42.9 billion and a return on equity improving to 18.8%, driven by strategic growth in its Africa Regions franchise and significant advances in digital banking, which saw a 30% surge in digital transactions. The group also emphasized sustainable finance, mobilizing over R50 billion for corporate clients and facilitating substantial investments in alternative energy solutions. Despite global uncertainties and inflationary pressures, the group showed resilience, ending the year with a strong capital position and declaring a final dividend of 733 cents per share. Looking ahead to 2024, amidst anticipated global and regional challenges, the group expects to maintain solid growth, anchored by strategic investments and a focus on sustainability, while navigating the evolving economic landscape with a continued emphasis on digital innovation and customer satisfaction.

Long term broker ratings and price target

A consensus of 12 analyst estimates sourced from Refinitiv data (as of the 14th of March 2024) suggests a long-term buy for Standard Bank. A mean of these analyst’s price targets suggests a long term (12 month) fair value of 22793c for the stock.