A long-term wager on Standard Bank – one day it will look so obvious
By Alec Hogg
Spent yesterday afternoon at a Town Hall gathering of Standard Bank's technology team. My role was to offer thoughts on Africa's future, a rather relevant issue considering the bank's strategy has been to put all its chips on the continent. Standard Bank's own Africa story is impressive. Present in 20 countries on the continent; 26% of its revenue now comes from non-SA Africa where last year's profit was up 44%. Then there's MTN which in 1999 was one of only three bidders worldwide for Nigeria's three cell phone licences. Today that licence generates two and a half times more operating profit than in MTN's home base.
But the thrust of any pro-Africa argument is bigger than corporate examples. The case is rather simple. Africa is home to 12% of mankind. Yet it generates under 3% of the world's wealth. It's natural share, therefore, is four times the current slice. There is a lot of catch-up to be done. Economic historians are sure to look back in ten years' time and wonder why others didn't see what Standard Bank regards as the obvious bet. Given the relative rating of the bank's shares, they must be worth a long-term wager today?
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