Good afternoon, everyone, and a very warm welcome to Standard Bank Group's 2026 Capital Markets Day. I'm Adam Ikdal. I'm the Chief Strategy Officer of the group, and it's my honor to be your host for the day. It's great to see so many of you both here in the room and following us online. We truly appreciate your time today and for the interest that you're taking in our business. Before we kick off, please take note of the disclaimer on screen, which is also included in the materials that is uploaded on the IR website. The central theme for today is Unlocking Growth, as you can see behind me. Africa is changing. Africa is changing very fast, and we believe that we are uniquely positioned to benefit from the trends that are changing Africa.
To have that discussion with you today, we have put together the following agenda. Our Group CEO, Sim Tshabalala, will start by sharing his overall strategic reflections. He will be followed by our four chief executives of our business units. They will present their view on their competitive landscape, their strategic focus areas, the intervention they plan, and the corresponding financial outcome that we can expect. We'll then have a break and at 3:15 P.M., our Chief Operating Officer, Margaret Nienaber, will take us through some of the most important enablers that we need in order to realize our BU strategies. She will focus on technology, AI, and payments. After Margaret, our Group CFO, Arno Daehnke, will outline how this all flows together into a cohesive and hopefully credible plan towards 2028. In the interest of time, all of these presentations will flow directly after each other.
We've carved out 60 minutes' Q&A following Arno, where we will take all of your questions, both here in the room, on the Chorus Call, and also on the webcast. For those of you in the auditorium, the full management team will also be available outside after the presentations for any additional questions that you might have. All materials today will be available for you and including a recording of the presentation on our IR website following the session. Those in the room, you can also download the presentation using the QR code just in front of you. Okay, let's get started and first off, Sim, over to you.
On behalf of the Standard Bank Group board, and the executive, and indeed all of us at Standard Bank, welcome and good afternoon. It's my pleasure to welcome you to the Standard Bank's Capital Markets Day. Thank you very much for your time and for your interest in our business. Having announced our new medium-term targets in March last year, and having now completed the period that ran from 2020 - 2025, we want to provide more detail on how we will achieve our next set of medium-term plans and targets. These extend from this year to the end of the 2028 financial year. We are and will remain a purpose-led organization. As we put it, "Africa is our home. We drive her growth." We exist to harness the immense power of finance to support and accelerate the economy of our home continent.
We take that word "home" very, very seriously. We are proudly African, and we treat the people of our home continent with the care and respect that they deserve. We have been in business for 163 years. Our brand has long since been a byword for trustworthiness throughout our beloved continent. As it happens, we've just been named as the most valuable banking brand in Africa and in South Africa for the fifth consecutive year. It has taken several decades to build our Africa-wide network of businesses, almost all with their own balance sheets and with deep local expertise, and connected and integrated into the entire group. The last five-year period has been one of steady and systematic success, earning us the right to present our future plans with confidence and credibility as we do here today. We are the leading African banker, insurer, and asset manager.
Starting with the graph over there on the left, in an industry where scale is decisive, we are by far the largest African universal bank. Turning to the middle panel over there, with businesses in 21 African countries, with market-leading positions in many national and continent-wide markets, and with offices in the major global financial centers, we have an unmatched footprint and reach. We have 20 million active customers, many with multiple accounts with us. On the right over there, over the last five years, we have delivered peer-beating total shareholder return. We deliver these returns by having a large and diversified portfolio. We have four business units, each of which is a very large and successful financial services business in its own right. Corporate and Investment Banking, for instance, is Africa's leading bank for institutions and large corporates.
Business and Commercial Banking is the number one commercial bank in South Africa. Personal and Private Banking is South Africa's top mortgage leader, lender, and is rated as Africa's best private bank. Insurance and Asset Management is the leading embedded short-term insurer and best fixed income and money market manager in South Africa. Each of our four business units, therefore, serves different client segments. These segments respond in different ways and at different speeds to the macroeconomic cycle and to market developments. Our business units combine to form an integrated and highly resilient portfolio. A further source of resilience is that our Africa regions businesses are split into east, west, and south and central regions, each of which has its own distinctive economic dynamics. In 2021, at our previous Investor Day, we made the commitments listed on this slide.
We met or exceeded these targets thanks to the diligent execution of our strategy. Our revenue grew strongly, and our return on equity more than doubled. We do what we say we're going to do. We keep our promises, and we meet our commitments. We see our portfolio and the opportunities as shaped by four structural themes, Africa's rapid and steady economic growth and highly favorable demographics. Africa is a young, increasingly well-educated, rapidly urbanizing, and importantly, online population. Africa's large infrastructure needs. The continent's growing and diversified trade and capital flows, and global developments in financial services markets, largely driven by rapid technological change. Africa's economies are growing fast and steadily, and Africa will be the fastest-growing major region by 2030. There's a lot of evidence that Africa's growth has become endogenous and self-sustaining.
For example, the major changes in U.S. trade policy last year barely dented Africa's growth rate. On the left of that slide, we show the weighted average real GDP growth forecast for our Africa regions portfolio. We expect average growth to exceed 4% a year over the next three years, with some countries and urban areas growing even faster. Rapid and sustained growth implies more demand for both Wholesale and Retail financial services, on the Wholesale side larger and more sophisticated firms, on the retail side rapidly growing numbers of middle class and affluent people in the markets for private banking and a large mass market in need of simple and cost-effective banking and insurance. Adding inflation to real GDP, the weighted average nominal GDP across our footprint is expected to grow faster than 7% from 2026 - 2028.
Why are we showing you nominal GDP as well as real GDP? Because nominal GDP sets the floor on the rate at which we expect our revenues to grow. Over many years, we have built a business that is ideally placed to benefit from this ongoing growth. We are present in all the right places with all the right capacities and all the right offerings. These offerings include an integrated and well-priced insurance and savings proposition attractive to Africa's rapid growing mass market, the services of Africa's top-rated private bank appealing to the continent's growing affluent population, and trade and currency solutions for Africa's businesses of all sizes. The next opportunity associated with Africa's growth is that the continent needs a lot more economic infrastructure, particularly in transport and in energy. Contrary to old-fashioned perceptions, Africa can afford to fund half, 50%, of this from our own resources.
Like most places, it also requires a substantial amount of international funding. Standard Bank contains Africa's most capable and experienced project finance teams able to draw on our large balance sheet and bring together partnerships with commercial funders and DFIs across Africa and worldwide. Similarly, we are uniquely well-positioned to capitalize on Africa's growing and diversifying global and internal flows of capital and trade. As can be seen by comparing Africa's major trading partners in 1990 and 2025, Africa's global links have become much more diverse. A more diverse trading and investment pattern requires a financial partner with deep expertise and a wide network of relationships right across the globe. Our expert trade, foreign exchange, and payments teams link Africa internally and all the major global trading centers and capital markets, including the United States, China, the Gulf, and Europe.
Our new presence in Egypt further reinforces our ability to link the Gulf to Africa. Over the medium term, at the period to 2028, we expect to see a significant set of changes to the global and African payment system, largely caused by the adoption of cloud, artificial intelligence, and distributed ledger technologies. Over the same period, we expect both demand for and supply of hyper-personalized financial services to increase rapidly, accelerated by generative and agentic AI. We equally expect rising competition from fintechs and neobanks and advanced technology to serve Africa's mass markets at low unit cost. These trends are already leading to regulatory change, to new and intensified forms of competition, and to the restructuring and convergence of how financial services are packaged.
We are ready for these changes, and we have the scale, resources, and expertise to stay ahead of the pack at every point along the competitive spectrum from the most complex of international payments to the most basic of retail payments. Here is our strategy on a page. You're familiar with it. As you can see, it all flows from our purpose, which has not changed. Next, it offers a crisp statement of our strategy, quite simply to compete and win in our chosen markets and segments. Below that, we emphasize that we are led by four business units enabled by strong brands, excellent people, modern and secure technology, and a wide range of partnerships, all focused by accurate capital allocation and effective risk management. Executing this strategy will maximize the value of our portfolio and deliver our growth and return targets.
Each business unit will explain how they will grow their revenue by, firstly, focusing on the transactions that will lie at the heart of every financial relationship. Next, deepening these relationships beyond transactions, including by offering an increasing number of adjacent value-added services to our clients. Next, working more closely with each other and with partners. The principle of collaboration. Next, leading to clients and lending to them in support of their plans. As always, in the period to 2028, we will manage our costs judiciously. We are investing in our people, in systems and artificial intelligence which improve client experience or that allow us to increase sales and engagement. We are optimizing our processes through modernizing our infrastructure. Our primary axis of execution is our four business units. The center guides and supports.
The countries and regions provide essential local knowledge and nuance, but the business units execute. This slide shows you a summary of the BU strategic focus areas and financial targets to 2028. Together, the business units deliver the group's overall strategy. As well as making sure that our client interfaces are world-class, we are placing particular emphasis on modernizing payments and extracting tangible value from artificial intelligence. I want to emphasize here that the most difficult and expensive parts of our tech investments have already been completed. Our investments over the years in modern core banking infrastructure means that our systems are now very resilient and highly agile. We are well on our way on our cloud journey, having moved 71% of our migratable processing into the cloud.
We are into our third year without a major stability incidence, and we update our systems literally tens of thousands of times a year, as Margaret will tell you about a little bit later. In other words, we are highly credible in this area too. We are rigorous about maximizing the long run value of our portfolio and therefore about deploying capital to where it will find the best opportunities to grow. We are always led by our clients' needs, and we always aim to grow organically by building market share in our chosen markets and our segments. As the record shows, we also invest inorganically in high growth markets and in businesses that provide new capabilities. Depending on what our clients want, we may start with a small rep office, as we did in Egypt last year.
We may partner, as we did in Mozambique with Banco Totta in the 1990s, Clem. We may merge, as we did in Nigeria with IBTC in 2007. We may start a fully-fledged new bank with all the necessary business and IT and licenses, as we did in Côte d'Ivoire in 2016. Our client-led approach applies just as much to our partnerships with international banks, with telcos, with tech firms, and with retailers. All such partnerships have to solve real client problems and create opportunities. One important example is our partnership with the Industrial and Commercial Bank of China, dating from 2007 to serve the China-Africa Trade and Investment Corridor. Another is our partnership with Shoprite, which we announced last year. In all such situations, we think like investors.
We look very carefully at the cost of the asset which we might be acquiring, at the return on equity, and above all, at the growth prospects that will follow from the acquisition or merger. Last, but very importantly, we place a great deal of weight on people, culture, and values. A conducive environment, a clear strategy, and adequate resources are all necessary preconditions for success. They are not sufficient, however. It is also necessary to have skilled, committed, and honorable people at every level of the organization, and above all, in its most senior leadership. In our case, the Group Leadership Council. I'm privileged to lead this GLC team. These are very experienced and highly qualified people with a combined tenure of 225 years and 80 years on the GLC.
Many of the GLC have been together on our leadership committee for a decade. Even more importantly, this is a tightly-knit team which has managed cycles and crises as a team. We are all deeply committed to the group's purpose and values, and we drive a culture of collaboration right across the group. We have deep pools of talent and a strong bench. We have approximately 170 experienced senior leaders who support the GLC and who steer our business units, corporate functions, and geographies. Standard Bank has a highly systematic approach to attracting, retaining, and developing the best people in the business. We invest a lot of time and resources in growing our own timber at every level of the group. We spend ZAR 1 billion a year on staff training. 64% of our vacancies last year were filled internally.
We invest consistently in reinforcing our culture. Our aim is to ensure that every Standard Bank employee understands our purpose and values, including our insistence on stewardship, empathy, integrity, urgency, and service excellence. Our goal, quite simply, is to be Africa's employer of choice, and we believe that we are achieving that goal. Our employee net promoter score is 54, more than double the average of African financial services. According to the 2025 Forbes ranking of the world's best employers, we are 28th best in the world. We are third in the global banking and financial services sector, and we are the best employer on the African continent. To give a concrete example of what all of this means, consider our global markets business. The human capital and networks in that business have been built over many decades, including by paying some very expensive school fees.
We are now unique in Africa in our combination of deep experience in structuring and trading and in our wide networks in the front office sales and asset distribution. No other bank in our market can match the ability of our in-country and group market and credit risk teams to manage Africa risk. Our board is also exceptionally well qualified to govern these kinds of risks. Our financial targets to 2028, as announced last year, are our most important goals. There they are. These targets are ambitious and credible, and we are committed to achieving them. By growing our businesses across Africa, it is our intention to increase our headline earnings per share by 8%-12% on average from 2025 - 2028. We will continue to focus on generating operational leverage to ensure that our cost-to-income ratio trends down from 50%.
We are targeting an ROE target range of between 18% and 22%. We are, of course, very concerned by the conflict in the Middle East. As I said at our results, we have taken the necessary immediate actions to manage our risks, and we will continue to monitor the situation very closely. We understand the possible medium-term impacts on our business and stand ready using our formidable balance sheet and unparalleled risk management capabilities to support our clients in, for, and across Africa. Standard Bank Group is particularly expert and experienced in managing volatility and in creating superior shareholder returns in turbulent times. Therefore, as things stand, we see no reason to modify our commitments and our targets. Finally, these are the five key points that we would ask you to take away from today's presentations.
As our record-breaking 2025 results demonstrated, we are starting this new medium-term period from a position of financial and strategic strength. Just as important, we are endowed with the strength of a unique network and a powerful brand, both of which have been built over many, many decades. Next, the opportunities arising from Africa's rapid and sustained economic growth are large, and Standard Bank is exceptionally well-placed both to accelerate this growth and to benefit from it. We have a very clear strategy, well-defined, practical, and achievable steps that we are going to take to turn these opportunities into profits. Fourth, we have an unmatched depth and breadth of talent. Last, our medium-term targets are both ambitious and credible. In summary, we're feeling confident and energized. We will meet our targets, delivering excellent returns over the next three years.
Our task today is to show you precisely how we plan to do this. I will now hand you over to Luvuyo to present CIB.
Good day, everyone. On behalf of the entire team at CIB, thank you for taking the time to join us today and for taking interest in our business. I'm honored to lead this great franchise, and I'm equally excited to share with you our medium-term plans and the future of CIB. The presentation today will be structured in four areas. The first is where we believe the strength of the franchise is today, the progress that we've made, how we are positioned, as well as some of the key Africa markets and what are the key attributes underpinning our strong and differentiated competitive advantage. I will then share our strategic focus areas, starting with opportunities for growth, some of which Sim has highlighted, that we see across the markets and why we are confident of the growth prospects of this business.
I'll take you through our financial targets, giving you a transparent view of the outcomes we are aiming to deliver over the medium term. Finally, I'll close off with some of the key takeaways, reinforcing the core messages we want to leave with you, our momentum, our ambition, and the path ahead for CIB. Jumping straight into it, our franchise is the leading corporate and investment bank business in Africa with an unmatched footprint fundamentally built around our clients. Our key differentiator lies in our diversification across geographies, the sectors driving Africa's growth, and our client segments. Today, we operate across 21 African markets, seamlessly connected to our four major financial centers of Beijing, London, New York, as well as Dubai. It's important to note that the geographic presence is the entry ticket, but it's not the moat.
The moat is what happens inside the footprint. Across our footprint, we have built deep sector expertise across supply, demand, financial, and government sectors, providing both diversification and resilience through different market cycles. At the same time, we have invested in scale advantages that strengthen our risk management capabilities, supported by highly experienced teams who combine local insight with global perspectives. Our franchise today is well diversified across key client segments of global multinationals, African multinationals, and the fast-emerging opportunity across large domestic champions, as well as sovereigns. Together, these elements of scale, diversification, sector expertise, and disciplined risk management have enabled us to build trusted, long-standing client partnerships and helped us to deliver consistent growth across varied operating environments. Moving on to how we deliver to our clients. The starting point for our business is always the client.
This is enabled through our coverage-led model with best-in-class sector insights and teams. These teams coordinate how we serve our clients and the delivery of innovative solutions executed through our products embedded in the business units. We have a well-balanced portfolio, with each business unit contributing meaningfully to a diversified and resilient revenue base. Starting with Global Markets, which contributes 43% of CIB's revenues. Some of the key points I really want to highlight on Global Markets have to do with the sustainability of its revenues, its scale, and the strength of its structuring and risk management capabilities, as Sim highlighted earlier. Approximately 80% of the revenues are client-driven, highlighting a strong track record of sustainability and a consistent growth trajectory. Our Global Markets business is the number one franchise across multiple African markets, supported by our strong leadership in foreign exchange.
Our structuring capability as well as the depth of our balance sheet means we are able to support large and complex transactions, while our proven risk management capabilities allows us to navigate market volatility and protect returns through the cycle. Transactional banking accounts for 35% of our revenues and is underpinned by our capabilities across payments, trade finance, and the custody business. Strong deposit and payment flows provide stable recurring revenue streams, which also are capital light. Our technology-enabled platforms allow clients to transact seamlessly, further strengthening our client engagement in improving operational efficiencies. Our custody capabilities also continue to differentiate us. We are the number one custody provider in South Africa and across several sub-Saharan markets, reinforcing our relationships with institutional investors.
Lastly, Investment Banking contributes the remaining 22%, supported by capabilities across debt capital markets, equity capital markets, lending, M&A advisory, with a focus on integrated financing solutions and structuring. We also maintain a leading position in debt capital markets while continuing to expand our sustainable finance activities. Together, these three businesses form a proposition deliberately designed to generate recurring revenue streams and deliver sustainable value creation for our shareholders over the medium term. Since 2020, we've built a leading CIB franchise that continued to deliver strong and sustained progress, as depicted in this graph. By the end of 2025, our revenue reached ZAR 74.4 billion, supported by a robust 5-year compound annual growth rate of 14%, demonstrating both resilience and momentum in our business. Our focus on client-led innovation has strengthened our relationships, demonstrated by our client satisfaction score improving to 8.5 in 2025.
Over the same period, we have continued to enhance our operating efficiencies with our cost-to-income ratio improving to 42.6%, supported by disciplined cost management whilst continuing to invest in the future of the business. Our risk performance remains well managed, with the customer credit loss ratio improving to 14 basis points, reflecting the strength of our risk frameworks and the depth of the talent across our franchise. Headline earnings increased to ZAR 24.1 billion, enabling us to deliver a return on equity which has improved over the same period to 22.4%, which highlights the strength and sustainability of our earnings. When we compare revenue performance with the peers, the strength of our franchise becomes even more clearer.
Our CIB revenues show a 2x advantage compared with our South African competitors and has grown relatively faster over the same period, demonstrating both market leadership and sustained earnings growth over time. The progress we've made since 2020 has strengthened every dimension of our franchise from client experience, digital capability, to operational efficiencies, as well as financial performance, positioning us strongly for the continued growth. As you've seen from the previous slides, our CIB franchise is characterized by our ability to deliver innovative solutions as well as industry-shaping insights that address our client needs. A core drive of our progress has been our capability to structure and execute complex transactions that advance our clients' strategic objectives. Let me illustrate this with a few examples, starting with Barloworld, a client relationship which dates back over 100 years.
We have a longstanding corporate relationships and have built on this relationship. We acted as joint lead financial advisor, sole mandated lead arranger, underwriter, bookrunner, and sole guarantor on the largest private sector cross-border acquisition ever undertaken by a Saudi Arabian entity in South Africa. We bought the full [Mitofile] CIB franchise. This transaction signals renewed international confidence in both South Africa and the broader continent. In Optasia, we served as joint global coordinators, joint bookrunner, and transaction sponsor on the first-ever fintech listing on the Johannesburg Stock Exchange. This milestone offering enables a provision of microfinancing solutions to underbanked consumers across 38 countries, including 21 markets across Africa, highlighting the continental reach and relevance of our capital markets platform.
Our digital strategy continues to accelerate both the pace and quality of client engagement with 29 available APIs, and as Margaret will elaborate, we have already deployed 18 AI use cases across the business. This reflects a deliberate focus on anticipating emerging market themes and responding with solutions that advance our client ambitions. This is how we believe we will continue to differentiate our CIB franchise, by delivering innovation and insights that create value for our clients while also contributing meaningfully to the broader economy. As we move forward and think about the medium term, our strategy is centered on four clear priorities. Our ambition is clear: to position CIB as Africa's leading integrated corporate and investment bank, delivering seamless execution, deep liquidity, sector expertise, and best-in-class capital solutions for clients operating across Africa.
First, we aim to capture some of the structural opportunities that are emerging from Africa's next growth cycle, driven by rising investment, regional integration, sector transformation across the continent. Secondly, we will deliver accelerated growth in high-growth markets where we see significant opportunity and defend our leadership in our core markets. Third, we will continue to build on our proven and disciplined risk management foundation. This has been central to our resilience and will remain core and a competitive strength as we grow. Finally, we are committed to delivering market-leading financial performance, ensuring that our growth translates into stronger returns and long-term value for our shareholders. It is our belief that Africa is entering its most consequential decade of capital formation, and we are confident we are built and well-poised to intermediate it at scale. For us, the next four years is about disciplined execution of our strategy.
As Sim has pointed out earlier, for our franchise, one of the most significant opportunities lies in Africa's structural transition, particularly in energy, infrastructure, fast-growing trade corridors, and the critical minerals that will power the global shift to the new energy systems. Our first strategic focus area is therefore to capture opportunities presented by these structural shift. This includes positioning ourselves at the center of the energy and infrastructure super cycle, strengthening our ability to serve the fastest-growing trade corridors, and unlocking the value, the critical minerals value chain that it provides. The scale of these opportunities as depicted in this presentation are substantial. As an example, energy and investment needs in Africa are estimated at between $130 billion-$170 billion annually. While infrastructure represents close to $170 billion in addressable investment.
Major trade corridors, Africa-EU, China-Africa, the GCC-Africa together represent more than $1 trillion in flows growing at between 4% and 10% per annum. Within the critical minerals, copper belt, copper and cobalt alone present significant financing and advisory opportunities. To capture this potential, we will expand our offering through integrated multi-product solutions. We will deepen our transactional capabilities to increase our share of wallet and leverage the combined expertise of our local, regional, and international teams. We will leverage our global reach through our offshore financial centers to mobilize capital from global investors, development finance institution, multilaterals, development banks, export credit agencies, as well as pension funds to deliver innovative and scalable solutions for clients operating across these sectors. Our second strategic priority is focused on unlocking opportunities in what we refer to scale and grow markets across the African footprint.
These markets represent a banking revenue pool of approximately ZAR 300 billion for Corporate and Investment Banking, where the combination of market size and growth dynamics presents a clear opportunity to increase our share of wallet. In our scale and grow markets, we are targeting to grow at a minimum of low double-digit revenue growth over this medium term. We will achieve this by securing more primary banking mandates with the large local corporates, building deposits through payments and trade flows, scaling local currency lending and advisory capabilities, and capturing a greater share of FX inflows, particularly through remittances. In our core market, the market where our business is fairly mature and is already at scale, our ambition is to deliver high single-digit revenue growth over this planning period.
This will be driven by deepening primary relationships with our top clients, growing our share of payments and collections, and increasing cross-sell of structured global markets and investment banking solutions through deeper collaboration with Bill Blackie and the Business and Commercial Banking team. What gives us the right to win is the strength of our franchise, a trusted platform for multinationals and large local corporates, a scaled payments and transaction banking infrastructure, and an integrated CIB product offering that we can deliver consistently across the continent. As we continue to grow our franchise, one of the greatest strengths remains our disciplined approach to risk management. It is a core differentiator for CIB and has consistently protected the quality of our book through multiple market cycles. On the credit side, our performance has remained resilient even through the COVID period. This resilience is driven by three core factors.
One, our deep sector expertise. Two, strong early warning capabilities embedded across both our front office and middle office teams. Thirdly, a highly diversified corporate portfolio. As a result, our credit loss ratio has consistently remained within our through-the-cycle range of 40-60 basis points, demonstrating both strength of our underwriting discipline and the quality of our client franchise. On the market risk side, mainly through our global markets division, our model is deliberately client flow led, which allows us to maintain relatively low market risk even as trading revenues continue to grow. We actively hedge our positions, take on limited proprietary risk, and have reduced our SVaR intensity by 19%, further reinforcing the robustness of our risk framework.
Taken together, our disciplined risk appetite, which is vast for this continent, across both credit and market risk, provides a strong foundation for us to scale responsibly, support our clients with confidence, and deliver sustainable returns for our shareholders. We are confident in our ability to defend and grow our franchise over the medium term with a clear ambition to deliver ZAR 100 billion revenue business by 2028. I wish. This implies a sustainable growth trajectory of 8%-12% per annum, trending toward the upper end of that range. To support our growth ambitions, we will invest in key platforms, including our transaction banking, our foreign exchange platforms, and operational infrastructure alongside the continued rollout of OneHub API solutions, which are so critical in our payments business.
We also remain committed to sustaining positive jaws with a cost income ratio approaching 40% by 2028, while maintaining a discipline through the cycle credit loss ratio of 40-60 basis points in the medium term, likely to remain below this range. We plan to do all of this and deliver an improved ROE of between a range of 22%-24%. Finally, we remain firmly committed to our sustainability ambitions, including delivering on our ZAR 450 billion sustainable finance target by 2028. In closing, our strategic ambition is clear to position CIB as Africa's leading integrated corporate and investment bank, delivering seamless execution, providing deep liquidity and sector expertise, as well as best-in-class capital solutions for our clients operating across the continent. What truly differentiates us, however, is our team and our people.
The strength of our teams, the deep local knowledge, and the way we collaborate across CIB, BCB enable us to show up as one bank. We are confident that we have identified the right opportunities. We are partnering with the right clients to support Africa's next phase of growth. Our track record reflects a consistent discipline, strong execution and delivery. With the scale, the expertise, the capital, the strength of our franchise, and the passion and commitment of our people for this continent, we are well-positioned to capture these opportunities and continue on delivering for our clients and our shareholders. Thank you for your time and for your continued support for our franchise. I will now hand over to Bill.
Right. Thank you, Luvuyo, and good afternoon, ladies and gentlemen. In 2021, we made a deliberate decision to separate Business and Commercial Banking from Personal and Private Banking. The intention was simple. It was really just to unlock and demonstrate the true value of this franchise for the benefit of our clients. What we built is a structurally transaction-led and deposit-funded business that delivers recurring revenue and strong operating leverage. Interestingly, we hold the number one position in the SA mid-tier banking, ranked number one by operating income, and maintain a top three position in our African markets presence countries. Our Africa regions franchise continues to scale, while South Africa remains the fortress balance sheet underpinning the stability. Over the past five years, South Africa has consistently increased its share in the headline earnings profit pools.
Today, as can be seen from the right-hand side of the slide, BCB contributes approximately 20% to Group revenue. Significantly, 71% of that income is driven by transact and save rather than balance sheet risk. What you see is the building of scale. More importantly, what you see is a high-quality franchise. This is a diversified transaction-anchored franchise generating durable returns. Let me turn to some outcomes. As per the right-hand side of the slide, since 2020, we've doubled headline earnings in this business to ZAR 9.2 billion, while doubling return on capital to 38%. Importantly, this performance was not accidental. It was very intentional and repositioning the business over the long run. First, we strengthened our deposit base to more than ZAR 500 billion, a very powerful funding engine.
Secondly, we simplified and automated our credit processes, resulting in a 3.1 x increase in business lending disbursements. Third, we deliberately refined our risk appetite, remediated parts of the portfolio and tightened governance, resulting in the halving of our credit loss ratio to 108 basis points. Finally, we've invested in digital capability, lowering the cost to serve and enhancing our client experience. We believe that we've proven our ability to grow the earnings while reducing risk. That combination is actually what underpins our confidence going forward. In BCB, we have this privilege of serving clients growing from small startups, initiating banking through personal accounts, into growing themselves into full-service business banking customers, and ultimately maturing and migrating them into CIB. As a result, we serve two structurally very attractive segments.
Firstly, the Small Enterprise segment, which is digital first transaction and transactional and funding rich. In South Africa, this is a fast-growing segment, experiencing at least 11% turnover growth in recent years. They are entrepreneurial, resilient and flexible. I recognize that interest in this segment has heated up recently, but it's important to flag that we are invested in this opportunity and we have a comprehensive suite of products to meet these customers' unique needs. Today, we serve 760,000 customers in this segment. However, we do recognize that there's more to be done to truly compete and win in the lower segment. These clients, interestingly, contribute ZAR 190 billion to our deposit base with relatively modest lending deployment. This portfolio return is driven by scale and funding strength.
By contrast, the mid-tier segment is much more complex and advisory-led. They require more personalized relationships. They benefit from sectoral expertise and structured debt and advisory services. Interestingly, at a 14% compound annual growth in turnover, this segment has experienced much stronger turnover growth than enterprise in the recent past. These customers contribute ZAR 330 billion to our deposit base, with higher lending intensity and approximately 11 x the revenue contribution compared to enterprise. Our growth thus far reflects the strength of a full-service bank, the value of personal relationships, and importantly, the impact of local presence. Today, BCB acquires roughly 10,000 new customers a month. We drive this acquisition through PPB upward migrations, through frontline active engagements, through digital capabilities, and very importantly, leveraging of the CIB ecosystem for both upstream and downstream opportunities.
Ladies and gentlemen, this segmentation is very deliberate because it allows us to defend the leadership where we're strong, but also accelerate growth where we see opportunity. The market backdrop in business banking is changing fast, and this inevitably represents opportunity. With respect to trade corridors, we see them shifting dramatically to intra-African, the Middle East, and Asia, with this recent geopolitical activity actually accelerating this migration. Today, with ZAR 170 billion of intra-African trade flows, we now support more intra-African trade than with any other single bloc. Just giving you a sense of how much this landscape has changed. Payments are digitizing at pace with an emphasis on low-cost transactability. The technology landscape is extremely fluid and rapidly changing, and there's substantial client value to be realized through the effective use of artificial intelligence and big data.
That said, we recognize that the competitive activity has intensified, both from traditional players and from fintech bodies. This is likely to remain a feature for the foreseeable future. We intend to harness this growth and these themes for future growth. Shifting gears a bit, as you'll see on the right-hand side of the slide, we believe that the revenue pools for this segment are roughly ZAR 250 billion. In this market, we split that between ZAR 100 billion in enterprise and ZAR 150 billion in the mid-tier. Now we acknowledge that given data limitations, we may not have fully captured the enterprise market, but this is still a very significant market. Importantly, 85% of these pools sit within six markets in which we already operate.
In addition, while observing that South Africa is a very significant part of this, it only represents roughly 1/3 of this collective revenue pool. In South Africa, our market share exceeds 20%, while in East and West Africa, our market share remains below 10%, providing meaningful runway for this business as we grow. Importantly, this is not speculative. It's disciplined expansion into markets where we have infrastructure, brand presence, and embedded frameworks. Against this backdrop of strategic and structural opportunity, in South Africa, we continue to defend our strong position in the mid-tier segment. Consequently, we see in South Africa that our growth opportunity resides within the hotly contested enterprise segment and it, strengthening our existing product offerings.
In Africa, while we're targeting a broad base, source of growth, our step change really relates to the accelerated growth plan for East and West Africa, with specific emphasis placed in the mid-tier segment. To capture this opportunity, we're focused on four key levers. The first is that we enhance and monetize our competitive positioning, particularly with respect to transactional capability with a lens on client-specific demands and local dynamics. The second is to leverage our differentiation, which lies within trade, our offshore offerings, and the connections that we can provide to our customers. Thirdly, we'll actively and responsibly leverage the balance sheet to fuel client growth. Fourth, we'll embed structural efficiencies through the digitization and simplification of our franchise. Importantly, we see each lever reinforcing the other. Transactional strength generates funding enables disciplined lending growth, and digitization reduces cost and improves return density.
These levers will be unpacked in the coming slides. The strength of this franchise, as I touched on earlier, is really lies in the transactional relationships. Transactional primacy is earned through client experience, capability and simplicity. Over the past five years, we've invested deliberately in digitizing and simplifying and enhancing how our clients access the bank. I'd like to touch on a few of these proof points. Firstly, with respect to digitization. A small business in South Africa can now open an account in approximately 15 minutes. That reduces friction, improves acquisition conversion, and lowers the cost to serve. Through our AI-driven capabilities, personalization solutions enabled over 600,000 conversations with clients last year. This strengthens relevance and improves share of wallet.
Interestingly, digital transaction volumes have grown 66% in this business since 2020, with a structural shift from cash towards electronic and real-time payments, but of course, reducing servicing intensity. Secondly, collection capability. What we recognize is that merchant acquiring anchors transactional flows, and that transactional flows underpin the deposit growth while creating insights into client behaviors and needs. So we responded to all the competition in the market and upgraded our merchant capability, becoming progressively easier to use, more competitively priced, mobile money enabled, and increasingly rich with respect to value-added services such as stock management and additional revenue streams. Thirdly, with respect to digital channels, our new online banking for business channel strengthens the digital banking experience. This channel supports business banking anytime, anywhere, and across any device. It enables companies of all sizes to manage transactions, payroll, and working capital with greater control and real-time visibility.
Importantly, while digital capability is foundational, our model remains human-led and digitally enabled. Technology enhances productivity while we see relationship management provides judgment and advisory depth. BCB's differentiation lies in this client connectivity. We are increasingly operating as an integrated African franchise rather than a collection of local businesses. Clients expanding or trading across borders require execution capability, hard currency access, and trusted advisory support. We provide all three of these. Our leading global markets franchise, our Africa trade expertise, and our payment simplicity makes us the perfect partner for our clients' trading needs. Added to this, our offshore presence in Isle of Man, Jersey, and Mauritius provides a differentiated proposition that supports our clients in managing both their onshore and offshore requirements. We have a truly unique proposition in facilitating structured connectivity, opening doors, and delivering growth to our clients.
Through our connections, we're well-positioned to invite our clients to participate in globally recognized trade and agricultural events. This typically translates into export contracts and long-term cross-border mandates. Conferences like our Africa Unlocked conference similarly creates connections between like-minded entrepreneurs looking to expand across the continent. Lastly, we're invested in helping small businesses grow. They are, after all, our pipeline and the belly of the African continent. Our targeted outcomes are as follows. A 10% growth in international payments, deposits exceeding ZAR 725 billion, 8%-10% CAGR in non-interest revenue, and meaningful participation in Africa-China revenue pools. This growth is largely driven by connectivity and relationship depth, and not exclusively capital intensity. Connecting our clients is not simply an aspiration, it produces real commercial outcomes.
In 2025, we created substantive opportunities for more than 500 clients, enabling them to explore new markets and environments. The highlights at the bottom of the page show some of the cases. It's just a selection of tangible contractual outcomes that we've made come possible through our network. For instance, we facilitated a Ugandan cocoa aggregator's export of 10,000 metric tons of cocoa to China. We connected a South African client with a plantain supplier from Angola, allowing them to replace overseas providers and reduce cost and supply chain complexity. These examples demonstrate how our network translates into measurable economic value. Ultimately, we don't simply bank clients, we connect them to markets, partners, and contracts that directly unlock growth. Having strengthened our transactional franchise, the next lever is disciplined balance sheet optimization.
Over the past five years, we've reduced portfolio risk through refining risk appetite and tightening governance. With this solid foundation, we have a clear understanding of the risk across all of our markets, enabling us to pursue responsible and confident growth. Our priorities are grounded in the following elements. Geographic diversification with a deliberate growth in East and West Africa, where quality will be controlled with clear risk frameworks, managed sector and name diversification. Data-driven credit selection, where we'll leverage transactional and third-party data to improve underwriting accuracy, speed of decision-making, and portfolio risk-adjusted returns. We expect to be able to achieve 10% lending growth anchored within a through-the-cycle range of 120 - 165 basis points. Importantly, ladies and gentlemen, we're not chasing volume.
What we're doing here, our objective is to optimize risk-adjusted returns for the benefit of our clients. Our financial focus is related to structural efficiencies. In a transaction-led business, operating leverage really matters. We're building a unified digital architecture, a single front door for our business clients, simplifying journeys and reducing duplication. This will ensure an experience that is seamless, intelligent, and expandable. It's not all about technology. We will continuously evolve and enhance our product capabilities, including expansion into value-added services and ensuring insurance offerings. At the same time, we're gonna remain agile, navigating the dynamic payments landscape, integrating with relevant partners as needed. We're also investing in our coverage and sector domains. These expertise are for the benefit of our clients, bringing relevant insights, informed advisory services, and driving client value propositions.
In addition, AI is going to be leveraged to enhance our client experience through personalization levers, automation of administrative tasks, and supporting our banker productivity. Ultimately, all of these initiatives will support the ambition of enhancing client experience, leading to first call resolution, 90% digitally active client base, real-time settlement capability. While this is expected to support the cost-to-income ratio of approximately 55%, it's important this is not about cost-cutting. It's about finding operational leverage through intelligent investment. I often get challenged on the returns in business banking because BCB carries a remarkably high return on equity. In terms of our forecasts, they indicate that levels of an excess of 35% are sustainable. Our forecast returns are enabled by a solid transactional franchise and intentional cost efficiency.
This outcome is partially softened by near-term endowment, which moderates revenue CAGR by roughly 1%-1.5%, and of course, increased balance sheet leverage to support lending demand. Earnings expectations driven by 7%-9% revenue growth reflect anticipated competitor activity and the evolving payments landscape. Achievability stems from client acquisition, solution expansion, and growing international payment space, supporting our FX flows. Africa forecasts will, as you can expect, outpace South Africa, but this remains a very high quality and durable earnings model. To close, let me leave you with four key takeaways. First, BCB is a strong and defensible position in South Africa's mid-tier market, supported by a deep deposit base and recurring transactional franchise that underpins the quality of our earnings.
At the same time, we are deliberately expanding our presence in the enterprise segment, where scale and digital capability allow us to compete effectively. Second, the market opportunity across the footprint remains significant. Large revenue pools exist in our presence markets, particularly in East and West Africa, where penetration remains relatively low. In the near term, the mid-term segment will provide meaningful runway for disciplined growth. Third, our strategy is centered on delivering superior client outcomes through digitization, responsible lending, personal relationships, and our unique African network. We're building a franchise that is both scalable and deeply connected to our customers' growth aspirations. Finally, our targets are credible and deliverable, so we are confident that we can compete and win in our chosen segment. Our outlook is supported by strong client activity, disciplined risk management, and continued investment in efficiency and capability. Thank you.
With that, let me hand over to Funeka.
Thank you, Bill. Good afternoon, everyone. Thank you again for your interest in our business. The journey of Personal and Private Banking over the past five years has been one of deliberate choices, disciplined execution, and improved returns. Today, I'll walk you through the business that we've built, the drivers of our performance, and how we will continue to create value for our clients and shareholders while at the same time continuing to protect the interest of Africans who have trusted us with their growth journeys. In Personal and Private Banking, we serve 16.6 million clients in 15 countries across and also two offshore hubs. PPB has diversified income streams across transactional banking, lending, insurance, investments, and increasingly value-added services. Now, we deliver these solutions through our highly rated app, supported by a strong distribution network of bankers and financial advisors.
These teams work in an integrated way focused on building long-term and meaningful relationships with our clients. We use our data to create seamless experiences for our clients, and we deliver solutions that meet their needs at every cycle. We have a best-in-class personalization engine. It is machine learning, predominantly deep learning and increasingly generative AI using hyperscalers large language models. We use this personalization engine to drive cross-sell to deepen engagement as well as to improve retention. In 2025 alone, this engine delivered over 40 million personalized conversation delivered by bankers and another 680 million conversations that are delivered otherwise. We will see even a bigger opportunity to do this with AI. We are a well-positioned lender with scale and reach.
Specifically in South Africa, one out of every three families have chosen us to finance their homes, and more importantly, they trust us to support them through various economic cycles. Our Africa regions business is growing. We rank in the top three in five of 14 countries. Moving to the right-hand side of the slide, you will see that PPB contributes 31% to group revenues and 71% of them comes from South Africa. PPB has made significant progress since the last Investor Day in 2021. In South Africa, the last five years have really been about building a much stronger core transacting franchise while at the same time maintaining our strength in home services. Since 2020, 3 million more clients have chosen to bank with us.
This was really achieved by, firstly, really compelling new solutions, increasing our sales force, and building much stronger e-commerce capability. Furthermore, our UCount Rewards programs, recently, rated as in the top three of can't- live- without UCount Loyalty Program, continues to support a higher retention rate. We are particularly proud of the solutions that we have built that have, for example, MyMo, student loans, Flexi Funeral. These three were voted Product of the Year in 2025 in South Africa. Recently we received another accolade in our new solution called Money Reels, which is a money manager story. Hopefully, all of you have seen it. It's very illuminating in terms of how you're managing your money on a day-to-day basis. It won an award called Best Digital Insights in South Africa.
We are very much pleased that our new clients are really starting to use our bank on a day-to-day basis. These clients are also using their credit cards more with the latest credit card turnover growth of over 16%. 67% of our clients in South Africa are digitally active, and this has enabled us to increase our value-added services by 33%, resulting in a double-digit fee and revenue line. Furthermore, our collaboration with our colleagues in IAM has actually enabled us to build a strong insurance business with a ZAR 10 billion gross written premium. All of the above have resulted in a non-interest revenue growing faster than net interest revenue. Looking at how we manage costs, we have adopted a very strong save to invest philosophy.
We have delivered two structures, structural cost-saving programs, one in technology and one in distribution. These two have generated over ZAR 2 billion in cost savings since 2020. We've done this while at the same time reshaping our distribution network and investing in key capabilities such as personalization and technology. This has also created a foundation that enables us to innovate faster and, more importantly, put us in a position to be able to take advantage of AI sooner. Moving over to African regions, we are now pleased that all our countries are profitable, and that has resulted in a step change in ROE from -1% to 21%.
Furthermore, we've got 1 million new customers in Africa region, and this was really done through a lot of investments in people and building key capabilities such as personalization, basically reusing the personalization engine we've built in South Africa, reusing the app that we've used in mobile app in South Africa, and also building strong digital lending capabilities. In Africa regions, our lending today is 67% digital because of all the capabilities, particularly around automated credit decisioning, and that is now completely digital across all 14 markets. The bar chart shows how disciplined execution strategy has translated into improved returns. Overall, we have shown a 30% compound annual growth rates in headline earnings since 2010.
More importantly, the ROE of PPB has increased from 5% to 23% in the same period. Shifting our focus to our client franchise, we're a broad church. Our clients span from early entrants to high-net-worth individuals. We run a private bank and a personal bank, but they work in an integrated way. Personal banking plays a super critical role in creating a pipeline for private banking, where the value per client is 10 times higher. Now, looking ahead, our opportunity in PPB remains substantial. As we say to Sim, "The best is yet to come." Our strategy is grounded on the three mega trends that Sim referred to earlier. Firstly, Africa is set to be a leading region for wealth creation, with growth rates rivaling those of Latin America and Asia-Pacific.
Secondly, I mean, that opportunity creates opportunities for not only asset management with Yuresh, but the rising middle income, middle class, and high-net-worth clients also increase the size of the pool. Secondly, the favorable demographics, particularly a large digitally connected youth population, creates massive increase in profit pool and also interest in this market. AI creates an opportunity to reinvent our business, to increase productivity, to improve hyper-personalization at scale, and lastly, over time, agentic e-commerce. It's a game changer for our business. Because of these large opportunities that we've sketched, we've also seen increased competition. This competition comes from incumbents, but also new entrants, new entrants from other industries, and also new entrants from other markets. From these mega trends and the significant opportunities, we are well-positioned to remain the best private bank in Africa.
In South Africa, our market position is underpinned by a deep-rooted client base. Specifically, we have relationships with one out of every two clients in private banking in South Africa. The core way in which we engage our clients on a day-to-day basis will remain the banking app. What really sets us apart is having the largest distribution force of financial advisors that are banked with that are paired with bankers and work in an integrated way. What that does is it changes our business from being a banking-focused business to being a long-term financial advice-led business. That then, over time, gives us a differentiated opportunity to drive cross-sell in invest and insurance. This is beyond just for high net worth clients. In fact, my colleague, Margaret Nienaber, probably built that model about 20 years ago.
What the opportunity is now is to extend financial planning, not only to our private banking clients, those clients that are starting to pay off debt and are now investing, but to also go to high potential mass affluent clients as well. Furthermore, we see an opportunity to increase the size of our core transacting base. We will do this by upgrading quite a large number of clients that we've acquired in the last four years. We have seen them grow, and we will grow with them. We have a unique opportunity to upgrade clients from personal banking into private banking, as well as encouraging clients like Sim to stop using their debit card, but to use their credit cards more. We see equally strong opportunities across Africa regions.
We are a top three private bank in seven markets, and clients rank us amongst the top three for brand consideration in eight markets. The journey I'm particularly proud of is our private bank in Kenya. When we started the journey, this bank was number seven in terms of ranking of main bank used in private bank in Kenya. Today, we are number four. I'm hoping that in the next couple of months, I will be ranking them as one of those markets that are in the top three. It is an important, critical, and large market. Over the past few years, we have built strong capabilities in digital lending, complex lending, wealth management, both on and offshore, as well as hyper-personalization. Personal banking is very important. We have a substantial market share of consistent earners in two countries, South Africa and Uganda.
We aim to increase our penetration of insurance and unsecured lending in those markets. Over time, we'll aim to increase our market share of clients who are inconsistent earners. It is very clear that our starting point from a route of delivery, we will start with Private Banking in most markets. We are confident that these priorities and these choices of where to play will deliver sustainable growth and improve returns through the cycle. We will now unpack the strategic focus areas on the right in the slides to follow. Starting with the very important job of building the core transacting franchise. Since 2022, we have delivered a double-digit fee and commission income growth, and it is sustainable. This was achieved by the work of building a core transacting franchise.
The starting point was, in fact, to build a system of innovation at speed that consistently give our clients reasons to join and reasons to stay. This was done by setting up multidisciplinary teams across product, technology, data, and risk. These teams work on a daily basis in an integrated way to solve our clients' daily problems and enable their growth journey. This system of rapid innovation results in improved client experience, higher retention and higher digital adoption, and it has also supported our structural reduction in costs. In South Africa, 50% of our clients make use of value-added services, and we see a much bigger opportunity to increase not only the number of clients who are using value-added services, but to enable a lot more solutions. Our personalization engine is at the core of what we do.
It enables us to do client relationship management with millions of clients, and that starts from the moment a client joins, and that helps us to drive a much higher level of retention. The above will result in a much more transacting client base, higher engagement, and stronger fee growth. We are aware of the changes in the payment landscape that are being driven by the South African Reserve Bank. We are, in fact, supportive of the outcomes, and we've taken into account the impact of those changes in the plan that we are presenting today. Now turning over to cross-sell and engagement with our clients. In South Africa, Personal Banking clients that are transacting hold on average three products. Private Banking, eight. How did we do that? Really two big investments.
As we spoke earlier, personalization, right solution, right time, right channel, and secondly, digitization. This personalization engine that we've got, it was originally built in South Africa, but it has been scaled in all 14 markets at incredibly low costs and is starting to bear fruit. In the last year alone, for example, in South Africa, bankers did 10 million conversations at a conversion rate of about 38%. When you add real-time nudges, the conversion rates increase to 70% and the digital conversations start to go into the millions. We see further opportunities to scale this using AI. Currently, 40% of all our sales are done digitally. We find digital channel being the most potent channel to drive cross-sell.
Going forward, we will increase digital penetration from 67%, and we will continue to increase, more importantly, daily and weekly active clients. The partnership that we have with IAM and Yuresh's team is critical. Insurance is a key enabler for our clients in terms of protecting the assets that they are growing. We offer individual and property insurance solutions ranging from limited underwriting and full underwriting. While we have a high penetration of Credit Life as well as homeowners cover, only 21% of our clients have a funeral plan. This highlights an opportunity to grow, not only in funeral, simple life, but also comprehensive life solution. We already have momentum. The report NMG has rated us the second-largest originator of funeral policies in the banking industry in South Africa, and more importantly, with the highest persistency rate in the market.
This performance has supported a 17% compound annual growth in gross written premiums since 2020. Together with IAM, we are targeting a 10% growth in gross written premiums to ZAR 13.5 billion by 2028. This ambition is anchored in our current business momentum, our unique banker financial advisor integrated model, as well as our ability to continue to innovate as an integrated team between PPB and IAM. Yuresh will provide further details on our IAM collaboration journey when he presents shortly. We will now move on to our lending and deposit business. We've established ourselves as a reliable and consistent lender through the cycle, not a fair-weather bank. We will maintain our number one market share in home services, where we hold nearly half the profit pool in South Africa despite intensified competition.
We see opportunities to unlock new value in the home services ecosystem. Firstly, through broader insurance offerings, but also into broader participation in the home ownership ecosystem, such as through our business that we call LookSee. Our vehicle asset finance business is important. It will remain an offering to our clients, but not an industry-wide play. Our main priority is to break even by the end of 2026. In unsecured lending, which is overdraft and personal unsecured loan, we hold over 21% market share in South Africa. We will improve this through increasing our cross-sell into our existing client base. Overall, our risk will remain well managed with credit loss ratios remaining within through-the-cycle range. Deposits matter to fund all of this asset growth.
The work of growing the core transacting client base is important because it also translates into faster deposit growth. This will help us to improve our market share of current and savings accounts in South Africa. These steps, we see them giving us two outcomes, a high single-digit growth in deposits and a low single-digit growth in assets. This slide brings together how we are improving efficiencies while maintaining our business growth. Firstly, we are reshaping our distribution model by increasing the number of bankers, supported by smaller, more flexible points of representation in high-density areas. Furthermore, we will benefit from a reduced core banking amortization. The technology foundation layer that Margaret will talk about that we've been building has positioned us to seize the AI opportunity earlier.
Specifically, this foundation includes simplified cloud-based technology, scaled enterprise data and personalization platform, working together with our risk colleagues on AI governance as well as risk guardrails. We will use AI to change our business by increasing productivity, more hyper-personalization to everyone, and creating new clients' experiences. Finally, payments remain critical. We will continue to deliver seamless payment experiences for our clients while providing low-cost payments at scale. This supports both growth and efficiency. The combined impact of these initiatives is clear. Lower costs per client, faster innovation cycles, and higher banker productivity. As a result, we are targeting a cost-to-income ratio that is below 55% by 2028. We will continue to drive our strategy with unwavering commitment and disciplined execution. This positions PPB to compete and win in its chosen markets and segments.
Our ROE trajectory is supported by a sustained shift in our revenue mix, where NIR is growing faster than NII, as well as the fact that our core banking amortization is going to reduce. Therefore, our new ROE target range will improve to between 26% and 30% by 2028. In conclusion, PPB has solid momentum in the key drivers of our plan. We see strong opportunities to continue to grow, rising from wealth, increasing wealth in our continent as well as demand for advanced banking solutions. We are ambitious, yet realistic in our targets. Ultimately, what sets this franchise apart is the relationships. It's in fact the quality of the relationships we have with our clients. We have consistently shown ourselves to our clients to be dependable and reliable.
We see our clients not only for what they are today, but for where they are becoming, for what they are becoming. Our people, our secret weapon. They are consistently finding ways, digital and otherwise, solutions that solve real human problems and give families across the continent confidence that they can grow. Thank you. I now hand you over to my colleague, Yuresh, and will take you through our IAM business.
Thanks, Funeka, and good day, everyone, and thank you for joining us. For those of you who have not had the pleasure of meeting me previously, my name is Yuresh Maharaj, the Chief Executive of the Insurance and Asset Management business unit, commonly referred to as IAM. Today, I will take you through how our insurance investments and asset management businesses contributes to the group's growth strategy, and importantly, how we intend to scale this franchise to deliver continued attractive returns to our shareholders. I will cover four areas today. I will highlight where the Insurance and Asset Management business stands today. I'll then move on to expand on our growth opportunities in South Africa, as well as within selected African markets. I will then outline our strategic focus for the medium term, and finally close with our financial targets to 2028.
Let me begin with where IAM as a business stands today. IAM was established in 2022 as the fourth business unit of the group and is now a scaled and established franchise, serving clients across retail, corporate, and institutional clients, principally in South Africa, as well as in selected African markets. At the core, the business performs two critical roles. IAM acts as the manufacturing engine of insurance, investments, and asset management products for the group's banking clients. Now, alongside this group role, we operate a large and established distribution capability consisting of over 3,500 tied financial advisors that serve not just banking, but also non-banking clients. In addition to our tied force, we also have the support of the independent broker market, which equally gives us the opportunity to further distribute our products to additional clients in the open market.
These dual capabilities, manufacturing, together with multi-channel distribution, is a key competitive advantage for our business. The pie chart on the top right shows that our open market distribution today produces over half of our new business premium flows, and with our banking distribution channels contributing the remaining flows. This demonstrates that both channels are equally valuable sources of new business. As Funeka referenced earlier, the scale of our banking channel generated ZAR 10 billion in premium income in 2025. As can be seen on the next chart, this is well diversified across three main product lines. This channel has shown good growth over the last three years, with funeral premiums in particular showing the strongest growth, increasing by 18% per annum.
The final chart at the bottom, at the bottom right illustrates the scale we have in our investments as well as our asset management businesses, which I will cover later in the presentation. Today, our franchise operates at significant scale, which is supported by strong market-leading positions in our Nigerian pensions, administration, and asset management businesses, as well as a material comprehensive insurance, as well as investment market positions in the South African retail space. We have made significant progress in strengthening the business unit since it was formed. Headline earnings have grown to just over ZAR 4 billion, representing a 21% compound annual growth rate. Over the same period, our return on equity has more than doubled to 22.1%, which is now at the top end of our traditional insurance peer group in South Africa.
This strong financial performance has been driven by deliberate actions to drive improved performance. Let me expand on two of these. There was a multi-year investment into our single asset manager as well as our discretionary fund management capabilities. STANLIB, our single manager brand, has shown credible investment performance over the three and five-year time horizons, with material improvements in the performance of its high margin investment portfolios. Our discretionary fund manager in South Africa has also outperformed its peers over the three and five-year timeframe, with more than two-thirds of its funds at top quartile performance. Next, our consistent improvement in risk selection as well as claims management capabilities within our short-term insurer, South African short-term insurer, has contributed to an underwriting margin growing to a healthy 18% in 2025.
We are confident that we will be able to maintain our underwriting margin sustainably above 10% into the future. We previously shared with the market the significant benefits realized with the integration of Liberty into the Standard Bank Group, which included close to ZAR 16 billion in dividends paid to the group since the conclusion of the Liberty minority buyout in 2022. Together, these actions have generated a ROE for the business that is now at the top end of the group's revised target range of 18%-22%. As Sim mentioned earlier, our strategy is influenced by key market shifts. Highlighted on the slide are those that are more relevant to IAM. These structural trends underpin our business growth outlook.
Firstly, the convergence of banking, insurance as well as asset management creates the opportunity to embed insurance products as well as savings products into the everyday banking client journeys. Clients want a single trusted financial partner who can support them through their financial journey, from borrowing and transacting through to protection and savings, as well as helping clients with their estate planning needs when these do arise. As a group, we are positioned to deliver this, or we are well positioned to deliver this as we combine our banking capabilities together with our insurance, investments and savings products, coupled with our strong asset management expertise. We are also making good progress in enabling our digital as well as our direct distribution through the banking channels with almost 10 insurance and investment products already embedded in the banking app, and we have plans to increase this over time.
We also have a large client base across Africa that is increasingly becoming more digitally enabled. This integrated model allows us to deepen our client relationships. It confirms why we believe that we will win in our chosen markets as a comprehensive financial services player, which will outperform more traditional standalone product providers. Now, another key structural trend is Africa's demographic and economic growth, which will drive rising wealth creation and increasing demand for financial protection and investment products. From a market perspective, South Africa remains the anchor profit pool, accounting for more than 70% of Africa's insurance market. However, we also see attractive long term growth in six African markets, particularly Nigeria, Angola, Ghana, Kenya and Uganda, as well as Namibia.
As can be seen on the slide, the medium-term growth expectations for these countries exceed that of South Africa, and the market position for IAM in most of these priority countries is outside of top three, creating an opportunity for us for long term growth. Our most significant insurance presence outside South Africa is in Kenya, where we operate a life business under the Liberty brand and a short-term insurer trading as Heritage Insurance. I already mentioned our strong position in Nigeria. Our Africa insurance strategy is focused on simple products delivered through a digitally enabled technology platform. Now, this deployment has already started in Southern Africa, and we have a detailed roadmap of full deployment across our footprint. Investments as well as savings products are equally relevant to capture Africa's growth dividend and rising wealth creation.
Our approach will remain focused with South Africa as our core earnings contributor in the medium term, while Africa regions represents a long term growth opportunity. To capture these opportunities, we have defined three growth priorities that will allow us to compete and win in our chosen markets. Deepening our collaboration within our group, growing our share of the open market, and scaling our asset management as well as our investment capabilities. Through this approach, we aim to defend our leadership positions while growing in key client segments in South Africa and growing into top-tier market positions in the selected Africa countries that are already mentioned. Let me start with the collaboration within the group. As you've heard from Funeka, our retail banking business provides us with a large and attractive client base across multiple client segments.
The opportunity now is to deepen penetration across the existing client base through cross-selling activities. We have strong penetration of our Credit Life products, but lower levels of penetration in our funeral, as well as our Simple Life offerings, where we see the opportunity to grow. We also see the opportunity of expanding our offering into the Personal and Private Banking client base segments of PPB by expanding our reach of Simple Life and funeral products, increasing our penetration of our short-term insurance products linked to Home Services as well as Vehicle and Asset Finance. Finally, expanding our investments in savings products for affluent as well as high net worth individuals, including our offshore solutions. With these initiatives, we expect the South African bank distribution insurance premiums to grow at more than 10% annually over the next three years to 2028.
In addition to this, together with our banking business, as well as our Corporate and Investment Banking partners, we are uniquely positioned to introduce insurance products for business insurance as well as loan cover, including employee group risk solutions to meet the needs of our clients within BCB as well as within CIB. This is work in progress and presents another growth opportunity for us as we pursue this. In addition, together with CIB, we also see the opportunity in attracting funding for specialized funds, the recent launch of the Khanyisa Energy Fund being a good example of this. Now let me unpack how all of this can be achieved. I'll equally elaborate where Funeka has stopped off on some of the points that she alluded to with regards to the collaboration.
This slide illustrates how we expect bank distributed premiums to grow to over ZAR 13.5 billion by 2028. I'll distill this by product type. Funeral policy penetration is currently below 25% of our transactional client base, and now this presents a clear opportunity for growth. We have a very strong pricing advantage over traditional insurance, market-leading persistency, as we heard earlier, and a market-recognized product, including features which includes unique benefits like the Cover Extender. Now, this feature alone has resulted in additional premiums collected of over ZAR 1 billion to date, compared to traditional products where the policy lapses after more than one missed premium. This feature clearly resonates with our client base. The short-term insurance opportunity lies in introducing a wider product set, improving risk selection through better data, as well as embedding these products more seamlessly within our banking app.
I will expand more on the Simple Life opportunity on the next slide. Although penetration levels are already high in the Credit Life book, we still see opportunity through further digital enablement. These initiatives allow us to be more relevant to our clients, thereby enabling us to grow our premiums by more than 10% by 2028. Now, let me spend a moment on what we see as a particularly compelling growth opportunity in the Simple Life insurance product. South Africa has a large unmet need for life insurance in the middle market segment. The CSIR insurance gap estimates that life insurance penetration is particularly low in this segment, and when we look at this through household incomes between ZAR 8,000 and ZAR 40,000 rand per month.
Now, we believe this gap exists for several reasons, and all of which we believe we're best positioned to solve and meet the client need. Consumer awareness, firstly, of the need for life cover remains relatively low, and many households are uncertain about how to solve for this need. Designing products for this client segment requires carefully balancing several factors, including simplicity for the client, appropriate pricing, as well as ensuring overall affordability. We believe with the right product design and distribution capabilities that we have, we estimate that the segment could grow to approximately ZAR 15 billion of gross written premiums over the longer term. We also believe that we are strongly positioned to capture this opportunity over the next five years. This is through a trusted brand, extensive distribution reach, strong advice capabilities, complimentary data sets, transactional banking, credit data, as well as demographic experience.
Finally, deep insurance intellectual property across both Simple as well as comprehensive life products. Now, taken together, these capabilities provide a distinct competitive advantage, positioning the group to capture a meaningful share of this growing market. If I now move on to the second pillar of our strategy, which results in scaling our presence in the open market through our advice-led distribution capability. As can be seen on the bottom right of the slide, we highlight the strength of our tied distribution. We have built a diverse and experienced tied advisor force over the last three decades, of which close to 70% are Liberty Tied Advisors in South Africa. Diversity for us is key in order to enable for us to relate to our clients, and we are pleased to share that one-third of our Liberty Advisory Force are female, and this number continues to increase.
Over 90% of advisors are also well represented across the main South African financial hubs of Gauteng, Western Cape, and KwaZulu-Natal. The depth of our experience and tenure of our advisor force is an important competitive advantage, particularly in advice-led financial services, where trust as well as long-term client relationships are key ingredients for success. As part of repositioning our advisor value proposition, advisors can now offer a complete suite of solutions. Now, one such example is banking solutions, such as home services already integrated within our advice, proposition to our advisors. This has shown early positive outcomes with over ZAR 270 million of home loans originated since launched a few months ago. Looking ahead, our focus is on expanding advisor capacity, improving productivity, and further enhancing the advisor value proposition.
Together, these initiatives position us to grow index premiums as well as investment flows into the open market at more than double the growth rate of what we experienced over the last three years while strengthening our position across the financial advice landscape. Now turning to our third priority of asset management. Today, we manage and administer ZAR 1.75 trillion of assets under management across South Africa and Africa regions, anchored by STANLIB in South Africa, as well as Stanbic IBTC Pension Managers in Nigeria, and supported by our wealth management and platform businesses. This slide shows us the makeup of assets under management by brand, by capability, as well as by geography. Asset management businesses are, by their nature, capital light and highly scalable, making it an attractive driver of long-term shareholder value. Our focus here for these businesses is twofold.
Firstly, converting our consistent investment performance into sustainable client cash inflows. Secondly, shifting our investment flows towards higher margin asset classes, particularly multi-asset as well as alternative solutions. Our growth opportunity in South Africa, being the largest asset management value pool measured by asset size, centers around delivering more relevant investment solutions into the banking client base, where there's an opportunity for more appropriate higher margin product sales. Secondly, maintaining the credible investment performance in STANLIB that has resulted in more than ZAR 20 billion in positive client cash inflows just in the last two years. This includes significant institutional mandates won in the higher margin, more differentiated and specialized portfolios. Finally, attracting flows onto our investment platform. Another key differentiator and competitive advantage for IAM is the strength and integration of the investment value chain.
Our model is designed to deliver client value by connecting distribution, advice, platforms, investment manufacturing into one integrated market offering. Now, across this value chain, we operate market-leading businesses in assets as well as discretionary fund management, together with a modernized investment platform supported by both local as well as offshore capabilities. We own these capabilities and have invested significantly to create a simplified client experience. These capabilities are equally relevant in our banking as well as our open market channels. The investments made are critical to driving growth while also delivering ROE-accretive capital light benefits. This technology importantly allows us to deliver scalable infrastructure and creates operational leverage as we grow investment flows onto the platform. We estimate that the total savings and investment pool in South Africa to be valued at over ZAR 3 trillion measured by asset balances.
Independent brokers administer roughly 70% of this asset pool and attracts the same proportion of flows into this pool annually. Now, with over 80% of new investment flows in the industry captured onto platforms just in 2025, the case for a competitive platform is clear. We believe there is significant opportunity in the PPB retail affluent and high net worth client base, where penetration levels are approximately 25%-30%. Given that our current market share in the independent broker market is mid-single digits, this represents a further opportunity for us to grow and to scale the platform.
Ultimately, our ability to combine these capabilities with a trusted brand as well as specialized investment teams positions us well to attract cumulative flows of between ZAR 80 billion-ZAR 100 billion by 2028, which actually represents more than doubling our current market flows over the last three years. All these initiatives support our financial ambitions for the business. By 2028, we aim to deliver an improved ROE in the range of 24%-27% and an earnings growth of more than 10% per year. Insurance growth will be more evident in the short term and will make a meaningful contribution to the non-interest revenue for the group. Investment as well as asset management growth will be more visible over the medium term, and that is due to asset balances accumulate through time.
However, we are very mindful that our businesses are highly geared to investment markets, yield curve movements, catastrophic weather-related claims which could impact our growth ambitions. These will need to be managed as and when they arise over the medium term, and we've demonstrated a posture over the last 5-7 years which we could manage and have agility in managing these volatile times. Together, these businesses provide diversified capital-efficient earnings for the group and is a valuable contributor to the group's non-interest revenue ambitions. Let me close with a few key messages. IM is a scaled and established franchise with strong market positions across insurance, investments, and asset management. We have already delivered a strong financial performance, doubling ROE and growing earnings over the past three years. Our growth strategy is clear.
We will deepen collaboration within the group, scale our open market distribution, and grow our asset management and investment capabilities. Finally, with these initiatives, we are confident in delivering double-digit earnings growth as well as top quartile shareholder returns while continuing to strengthen the group's integrated financial services offering. Thank you for your time. Now hand back to Adam Ikdal.
Thank you, Yuresh. Thank you to the BU chief executives. It's time for our break. We'll see you back at 3:15 P.M. in South Africa time. For those of you online, the stream will pause and will restart when we come back. There are refreshments outside for the people in the room, so please be back. We'll start promptly at 3:15 P.M. Thank you.
The show will continue in five minutes. Ladies and gentlemen, we are about to begin. If we could ask you to please take your seats.
Ladies and gentlemen, we are about to begin. If we could ask you to please take your seats.
Okay, welcome back, everyone. I hope all of you had a good stretch and got some refreshments, well fueled for the last half of the program. Thank you again to the presenters. I might be biased, but I'm very convinced of the strength of the franchise. The BUs have now set a strong stage and a strong foundation for their strategies. We will now move to the critical enablers group wide that are needed to deliver on these strategies. That presentation will be done by our COO, Margaret Nienaber, who will elaborate on some of the critical ones: technology, AI, and payments. Directly after, Margaret, our Group CFO, Arno Daehnke, will put everything together in a cohesive plan towards 2028. Let's start with our COO, Margaret Nienaber. Floor is yours, Margaret. Thanks.
Thank you, Adam. Good day, and thank you for joining us. Today I will share with you how we are pioneering the next phase of growth through our leading technology platform, AI evolution at scale, and payments value creation. Importantly, much of what you will discuss or hear from us today is not just aspirational. We are already delivering tangible outcomes across our businesses. Our four business units are integrated through common and aligned capabilities at scale. At the foundation, our single modern technology platform. This platform drives unified solutions around key capabilities like cloud, simplification, cyber, culture, and data platforms, while enabling automation and straight-through processing of our operations. Our unified brand strategy has already earned us the number one position on net reputation sentiment.
Trust is built over time, and for a group that is 163 years young, it remains a competitive advantage that we are known for and proud of. All of this drives simplicity, speed, and scale. As we look ahead, our next phase of growth is built on three pillars: a leading technology platform that underpins AI at scale and together powers the future of payments. These pillars reinforce each other and already delivering measurable impact. In the slides that follow, we outline the key strategic actions underway to scale each one. First, technology, the foundation of our focus on AI and payments. Over the past five years, we have step changed key measurables in technology execution, including cost, speed, and reliability. As can be seen in the top graph, revenue per unit of technology spend has improved materially, unlocking structural operating leverage above peer levels.
The bottom graph shows that our technology spend as a percentage of OpEx was historically above peers as we invested early in our core technology capabilities. Competitors have increased spend while we have unlocked efficiencies, and we are now in line with the peer average. This supported an improvement in our group cost-to-income ratio from 59.1% to 50.2%, helping drive our ROE of 19.3%. We achieved this by now having 71% of our migratable compute in the cloud. 88% of our legacy servers have been decommissioned. We have increased feature delivery by 35% since 2020, with more than 37,000 changes delivered last year alone. Despite this faster pace, we reduced outages by 98%. Our 5,000-strong technology team now comprises 73% technical specialists.
Our significant 2025 total technology spend of ZAR 23.5 billion reflects our ongoing commitment to building a strong technology platform. We will continue to apply our very well-established save to invest strategy as we did by absorbing cloud investment over the past five years. We have unlocked structural cost efficiencies and amortization has been trending down due to our disciplined approach. Our software capitalization rate has moved and improved from 13% in 2020 to only 3% in 2025. This has freed up capacity to continue investing in cloud and AI as well as current strategic initiatives like card modernization and client platforms across all of our business units, as also referenced by Yuresh. Total technology spend as a percentage of OpEx, currently at 27.7%, is expected to remain at this run rate.
Looking to 2028, we will continue to focus on modernizing our technology platform. Transformation is not just about systems, it is also about people. We are proud of our people, their strong integration with the business units, disciplined execution, collaboration with ICBC, consistently high employee satisfaction scores and several CIO awards, modern cloud-enabled systems and highly capable engineers. This takes us to the second pillar. Unlocking value through artificial intelligence and the business transformation it enables. Using the iceberg analogy that you can see on the screen, the visible 10% is what people see, chat interfaces, copilots and client facing tools. Below the surface is the technology foundation that we just discussed. The hardest part to get right is people. Driving a culture of adoption and shifting from AI tools to AI enabled work underpinned by strong governance and controls. AI is not optional.
It is going to touch every part of our business. In a rapidly changing world, our leadership approach and posture is evolving too, to drive purposeful innovation and enable decisive, deliberate action, building our long-term competitive advantage. Our AI strategy is built on scaled foundations, cloud infrastructure, modernized data platforms providing data ready to scale AI and a strengthened bench of engineers. We have been building traditional AI and machine learning capabilities for several years now, and that foundation is now enabling us to scale newer and evolving areas such as Gen AI and agentic AI. We are already seeing tangible outcomes using traditional AI across all of our business units, as evidenced in this block. In PPB, our mobile app conversational AI now handles 65% of digital queries, improving client experience while reducing operational demand.
In Gen AI and agentic AI, more than 20,000 of our employees use these tools actively every day. Employee enthusiasm has been strong with teams incorporating AI into how work gets done. This is supported by AI training and also gamification and a well-developed and used prompt library. Engineering productivity was already up more than 20% last year. Agentic AI with the human in the loop is forcing us to consider how we approach and manage risk, and it's starting to show early results. For example, in commercial and asset finance in BCB, reducing the loan documentation processing time from an hour to a minute. We have more than 50 Gen AI model approved use cases being scaled across the group. Our AI blueprint is deliberately simple and focuses on three areas.
Firstly, clients, where the focus is on more relevant and personalized client experiences with four priorities, relationship manager productivity, personalized offers and nudges, conversational servicing and contact center assist, and payment automation. Secondly, people and culture. Driving a culture of adoption is key to what we do and our competitive advantage. Just as important is allowing for experimentation within controlled guardrails. AI is a CEO agenda driven by Sim, also a very keen user himself. We have a Chief AI Officer supported by cross-functional specialists embedded within the business units. The real divide will not necessarily be between humans and AI, but between those who learn how to use AI and those who don't. Our responsibility is to make sure that we support our teams on this journey.
We will reinvest freed up capacity into higher value work, for example, enabling relationship managers to spend more time with clients on what matters to them. Lastly, our technology platform. As you've heard earlier, we are building a reusable cloud-enabled AI platform with responsible AI by design. Through our cloud journey, we have established deep relationships with our hyperscaler partners while standardizing data capabilities and improving access to quality data. AI is not a short-term lever. It is a long-term competitive capability and a necessity across each of our business units. Taking you back to the iceberg analogy, we are driving a culture of adoption, building the technology foundations, and focusing each of our business units on the use cases that matter most for them to remain competitive.
What we know today has been incorporated into our 2028 targets, and Sim is holding his leadership team accountable for delivery of those targets. Human-led and curious to learn, enabling AI evolution at scale. Let me now turn to the breadth of our payments landscape, spanning personal, business, commercial, and corporate clients with meaningful synergies across our footprint. Payments are at the heart of every banking relationship with strategic relevance across all four of our business units. They anchor client experience, are capital light and drive liquidity, therefore enhancing ROE, and very importantly, generate behavioral data to support deeper relationships and cross-sell, most notably value-added services and insurance. Competition is intensifying not only from banks, but also from fintechs, accelerated by the pace of technological advancement. Our payment strategy stretches across both traditional payment rails on the left of the slide and emerging modern rails on the right.
Digital asset-based payments are driving efficiencies on the new frontier, improving speed, reducing cost, and simplifying domestic and cross-border payments. Our response is an integrated payment strategy that runs across multiple rails supported by purposeful advocacy and importantly also considering regulatory and geopolitical shifts. We respond as one coordinated, resilient organization. Last year, we processed more than ZAR 164 trillion of payments across our 20 million clients and correspondent banking relationships. I asked Claude to give context to this number, and it said this means that every minute over ZAR 300 million move across our infrastructure. That is nearly $10 trillion a year, larger than the GDP of major European economies. At this scale, payments create access to data as a competitive advantage. Payments is expected to remain one of the fastest-growing domains in Africa, growing faster than GDP.
The value lies not in the transaction alone but in the flywheel that it creates. We think about this in three layers. First is the primary layer, core to our client engagement. In 2025, we processed 2.3 billion payments. Second is the ancillary layer, which evolves as we deepen our client relationships and enable cross-sell. Cross-border payments grew 12% last year with a 31% market share in South Africa and 17% across our footprint. Our transactional franchise remains the largest on the continent, driving liquidity. We hold over ZAR 2 trillion in deposits with current and savings accounts making up a third.
Third is the halo layer, long-term strategic value unlocked through client primacy and as pointed out by Funeka, adjacent solutions like VAS with PPB, SA VAS grew 33% last year measured by income. ZAR 28 billion was dispersed to clients in insurance claims in 2025. All of this facilitated through payments. The shift away from certain rails may put pressure on fees and commission, but our focus remains on the larger value pools above the rails and ensuring that we have an integrated client offering. We don't just look at product profitability, as pointed out by Luvuyo. Looking at our priorities for 2028, our payments capabilities are built on a solid foundation, scaling intra-Africa and Africa to the world connectivity. First, domestic payments. Winning the day-to-day transactional relationship remains critical.
We are scaling immediate payments, expanding merchant acquiring, and deepening wallet and agency banking to grow volumes, primacy, and also liquidity. We are also using AI to automate payment processes and improve the speed of payments. In Uganda, FlexiPay accelerated our mobile money footprint up 99% with ZAR 7 billion in transaction value, reinforcing our position as one of the region's fastest-growing digital financial service providers. As pointed out by Bill, merchant acquiring anchors client flows across our footprint and SimplyBlu grew 19% in new merchant sales. We will continue to focus on areas like PayShap, where our market share is improving, but where there still remains room to strengthen our proposition. Second, cross-border payments and diversification.
We are the first African bank to connect clients into the Africa-Asia payments corridor via the Cross-Border Interbank Payment System, also known as CIPS, processing ZAR 9.5 billion since its launch late last year. This is all about offering our clients choice without taking away from the importance of existing traditional rails. We also launched a global remittances platform in 2025, enabling our partners to seamlessly disperse funds into African markets, with Standard Bank providing trusted, secure, last-mile distribution across the continent. Blue2Blue, offering real-time cross-border B2B settlement within the Standard Bank network remains a focus area for 2026. Thirdly, digital assets. Our focus spans tokenized deposits, stablecoins, custody, and investment solutions within a controlled regulatory framework.
We are building secure on and off-ramps that act as the regulated gateway for these new rails, enabling our clients to access them safely while keeping flows anchored to the bank and protecting our deposit franchise. This has already resulted in multiple partnerships with more in the pipeline. We recently supported the launch of ZARP, a rand-denominated stablecoin. Over the past five years, we have strengthened our blockchain capabilities and cross-border flows through CIB's Aroko blockchain-enabled platform have surpassed ZAR 1 trillion since inception. Multiple rails, one orchestration layer. Let me close by reinforcing the integrated nature of this strategy. We have built a modern, simplified, resilient, and cloud-based leading technology platform. We are scaling AI deeply and responsibly, and we are advancing payments as a strategic enabler across the group.
Together, these three pillars drive structural operating leverage, driving capitalized revenue and growth and, of course, better client outcomes, underpinning the delivery of our 2028 revenue cost to income and ROE targets that you will hear about from Arno. From our humble beginnings financing the wool trade in the Eastern Cape to being ranked the most valuable and most admired banking brand in Africa, this is a story of trust, a story of resilience, a story of growth. Thank you. I will now hand over to Dr. Arno Daehnke.
Welcome, and thank you for joining. This afternoon, you've heard from Sim regarding our group strategy. You've heard from our business units regarding their strategies and targets, and just now we've had the great presentation from Margaret on our technology strategy. I will now pull this together to give you a view of where the group is trending to by 2028 from a financial perspective. I will thereafter hand over to Adam to facilitate the Q&A session. I will start with a quick anchor to our 2025 targets, transition to the 2028 financial outlook, and then cover core aspects of capital allocation and conclude with key takeaways.
As you know, we recently released our 2025 results, and we are very pleased to be able to report that our diverse and resilient footprint in Africa, combined with the disciplined execution Sim spoke about, allowed us to achieve all of our financial targets set in 2021. At the time of setting those targets, this management team aimed to accelerate growth in earnings and to drive ROE to levels structurally higher than those pre-COVID. You can see in these graphs from 2015 that we indeed succeeded, and the return on equity ended 2025 at the top end of our target range. Earnings growth in the post-COVID period since 2022 exceeded 13% on a compound annual growth basis. The market has recognized this excellent performance.
Taking into account our general shareholder distributions, our average total shareholder return amounts to 26% per annum since the end of 2020, and this is higher than the average of our local peers. The post-COVID earnings growth of 13% you saw on the previous slide was achieved through strong and diverse revenue growth, improved efficiency as well as disciplined risk management. In the years leading up to 2025, our banking revenue growth of 11% exceeded the 7%-9% target. The cost-to-income ratio trended towards 50%, and our credit loss ratio was managed within the target range. Let us now pivot to SBG 2028, where our growth ambitions are anchored in, number one, the strong base we have built. Number two, the excellent momentum we have.
Number three, the unique position to capture the trends driving Africa's growth you've heard about today. Our 2028 financial targets are set out on this slide. As you can see, we have two very clear core targets. Headline earnings per share growth on average 8%-12% over the period to 2028 and a return on equity between 18%-22%. Our aim is to focus on and prioritize earnings growth while further improving the ROE. We believe that it is our strong growth profile that will set us apart from competitors over the medium term. Within these two core targets, we are aiming for increased customer activity and quality of revenue growth, with growth anticipated to be on average between 7%-10% per annum. Continued positive operational leverage resulting in a declining cost-to-income ratio managed sustainably below 50%.
Disciplined management of credit risk and a group credit loss ratio of 70-100 basis points. A sound capital position with a common equity Tier 1 ratio above 12.5% and a dividend payout ratio 45%-60%. On the following slides, I will elaborate on each of these drivers. This slide highlights the supportive macroeconomic outlook. On average, for our network of financial service operations, we expect declining interest rates, lower inflation, and higher real GDP growth, and this is reinforcing Africa's resilient and strong growth outlook. Of course, geopolitical developments in the Middle East, particularly the conflict involving Iran, continue to introduce uncertainty. The forecasts on these slides include our latest best estimates and of course, further escalation in the conflict could impact these forecasts. We therefore acknowledge the uncertain geopolitical environment.
We use scenario analysis to plan and position the group to continue to succeed under a range of possible geopolitical and resulting macroeconomic outcomes. Sovereign risk is expected to recede across our African portfolio as debt to GDP ratios moderate, credit ratings improve, and bond yields settle after a strong decline. Based on the macros outlined in the previous two slides, we provide our assessment of our revenue growth profile to 2028. Total banking revenue is expected to grow between 7% and 10% a year. This growth is higher than average nominal GDP growth expectations of 7.5%.
Given the strong client momentum that you heard about from the business units, we have increased our revenue expectation range despite the negative endowment impact, which is still expected to materialize, and despite the relatively high base that that has been set for trading revenue over the last two years. Based on the revenue type shown on the left-hand graph, we expect non-interest revenue to grow faster than net interest income. Based on geography, you can see that on the right-hand side, we expect Africa regions to grow faster than South Africa. In fact, our expectation for Africa regions is to deliver double-digit revenue growth in rands. NII growth of between 6% and 8% per annum is anticipated to be driven by robust balance sheet expansion. On the left-hand side of the chart, you can see our expectation that customer deposits are anticipated to grow faster than customer loans.
Africa regions balance sheet growth is expected to continue to outpace that in South Africa. These mix changes, as you well know, are positive for our margins, which can be seen in the NII roll forward on the right-hand side of the slide. Lower average interest rates, particularly in Africa regions, however, will continue to be a drag on margins, as will be competitive pricing pressures. Of course, if interest rates do not drop to the extent we have modeled, in fact, we have just heard the MPC left rates on hold, as we all expected, I'm sure, we would anticipate a smaller endowment impact, but also slower asset growth. Also noteworthy here is that our fast-growing high margin business in Africa regions is expected to meaningfully contribute towards accelerating net interest income growth. Non-interest revenue growth of between 8%-12% per annum is expected.
This graph breaks NIR into its main component parts, and it shows firstly that the largest contributor to NIR, namely fees, continues an excellent growth trajectory supported by Funeka's discussion this afternoon, apologies. This reflects anticipated growth in our customer base, our access to transaction flows within countries and across the continent, as Margaret outlined to us, as well as our customers doing more with us. An increased contribution from fast-growing value-added services in our retail banking business also contributes towards this growth. Secondly, we show trading revenue sustaining momentum that our global markets client franchise has delivered over the last few reporting periods. With more than 80% of global markets revenues driven by recurring client activities. Thirdly, we expect a meaningful uplift from bank assurance income elaborated upon by Yuresh.
We clearly heard the benefits of a closer working relationship between PPB and IAM with this business and this cooperation delivering more than ZAR 13.5 billion of gross written premiums in 2028. On this slide, we outline our approach to managing operating expenditure. Investing where we are driving growth, of course, while optimizing costs through technology, scale and efficiency. Areas of investment will include client-facing specialist skills to increase customer acquisition, retention and cross-sell, as well as specialist technology-related skills. Investment into continuous improvements to features on our important digital channels. Investment into the continued shift from on-premise to cloud-based storage and processing. Also, as you heard just now, investments into artificial intelligence payment capability to make sure we remain competitive in the markets. Optimization efforts will concentrate on technology and our physical infrastructure.
Cost growth, therefore, is expected to be between 6% and 8% per annum. I'd like to emphasize that over each of the past five years, we have achieved positive operating leverage, and we've done this by actively managing our costs to be below revenue growth. We therefore have a proven track record of consistently achieving positive jaws driven by driving productivity and efficiency. We are therefore confident that our cost-to-income ratio will continue to trend lower and as I indicated, be managed sustainably below 50%. Moving now to expectations for credit impairments. The income statement charge for credit impairments is expected to increase by 5%-8% per annum, mostly driven by the growing loan book. The outlook for sovereign risk is expected to improve, as I discussed earlier.
At this point, we do not expect a repeat of the ZAR 1.5 billion sovereign impairment charge we had to raise in 2025. We are therefore confident that our credit loss ratio is expected to remain in the lower half of our target range. This completes the analysis of banking activities. I'm now moving to a brief outlook for our Insurance and Asset Management business, much of which has already been covered earlier by Yuresh. For those of you not familiar with our management reporting, we report a pure banking income statement and supplement it with earnings from our Insurance and Asset Management operations to then arrive at the Group earnings. The IAM numbers you see here are after accounting for an earnings attribution to PPB, thus recognizing the distribution role that the banking network provides for insurance products.
As you can see on this slide, we expect IAM earnings to grow in excess of 10% per annum. Post capital efficiencies extracted over the last two years, this business unit has been a strong contributor towards the group's expanding return on equity. I remind you that since 2022, when we bought the remaining stake from Liberty minority shareholders, we have upstreamed ZAR 16 billion of capital from Liberty to the group. This has resulted in a structurally higher return on equity for this important business unit. We have been through the drivers of the group's earnings to deliver headline earnings per share growth of 8%-12%. Here we highlight the drivers that will support an uplift in the group's return on equity to end 2028 firmly inside the new target range of 18%-22%.
We understand the levers we need to pull to drive our ROE, and we have set them out here. We first show the step-up by business unit, and you can see that PPB delivers most of the uplift in the group's ROE in the medium term. We need to bear in mind that we hold central capital buffers to ensure the resilience of the group for volatile market disruptions and also to always be in a position to support our clients. Capital buffers also help to enable us to capture organic and inorganic growth opportunities. These capital buffers will continue to dilute the group ROE to levels slightly lower than the business unit ROE contributions. CIB is expected to continue to be a small drag on the group's ROE. On the right-hand side of the chart, you can see the group's ROE expansion by regions.
Clearly, you can see Africa Regions has been and will remain central to our growth story. Strong economic and business momentum across the continent drives earnings growth from this diverse region of valuable companies. Africa Regions will continue to grow faster by around 2%-4% than South Africa. This faster growth at, as you know, structurally higher ROEs delivers the largest portion of the group's ROE expansion. Let us now shift our focus to capital allocation and discuss how we deploy capital to support growth while delivering returns to our shareholders. Our approach to exit portfolio management and disciplined capital allocation has seen us divest around $3 billion of capital from emerging markets and reinvest this capital into Africa since 2007.
These actions have changed the composition of the group's earnings, such that SBSA and Africa Regions are now roughly the same size in terms of their contribution to group earnings. A combined distribution strategy that balances growth with delivering increased returns for shareholders has seen the ZAR 170 billion in earnings generated since 2022 being retained for growth, which was roughly 40% of that earnings base, and distributed to shareholders in the form of dividends and share buybacks, and that was roughly 60%. The balance between funding growth and distributions is expected to continue to go forward. Capital will be retained for organic growth, particularly for products and geographies that are growing faster than others. We will also retain capital for inorganic growth, where we can buy scale in an existing market or indeed enter a new market.
Clearly, these considerations will always be subject to rigorous due diligence, price considerations, and also importantly, the ability to realize synergies. As can be seen through our recent history, we prefer to think of M&A as a continuous capability, executing a number of small to medium-sized deals. Empirically, we know that programmatic execution of M&A, rather than doing very large transformative deals, leads to stronger performance and reduced risk. We will therefore continue to return capital to shareholders in the form of ordinary dividends supplemented with share buybacks where it makes economic sense to do so when we have excess capital. Our approach to capital allocation is based on comprehensive client-led market analysis to identify growth investment opportunities delivering fast-growing, high-quality earnings. Our current assessment of market opportunities within our existing network shows many areas of potential growth.
The map shown here supports our current strategies to direct incremental capital towards East and West Africa, where large profit pools exist and fundamentals improving, and we do not yet have a top three market position. Egypt on this slide is notable for its market size, and we are looking forward to expanding here as well. Our Cairo representative office allows us to apply our CIB expertise in this important market. We showed this slide at our results two weeks ago and would like to reiterate this message again. We currently calculate the group's cost of equity to be 13.8% using the standard capital asset pricing model. This has been reducing over the last number of reporting periods, mainly due to a reduction in the risk-free benchmark interest rate used in this calculation.
In 2025, the risk-free rate in South Africa, as you well know, declined by 200 basis points to 8.3%. We also sense check this important metric using a weighted average calculation of each of our legal entities. Within Africa regions, country-specific risk factors and inflation drive a calculated weighted average cost of equity for the region of 22%. To reflect the diversification benefit and relative earnings stability that this portfolio has delivered to the group, we correlate the country earnings to South Africa's earnings over the last four years.
We thereby calculate an earnings diversification benefit of 5.5%, which reduces group earnings volatility and risk to arrive at a diversified cost of equity for our Africa regions network of 16.5%. Using a 10.1% cost of equity for our dollar-denominated offshore operations, the 16.5% we just calculated for Africa regions, and the 13.8% for South Africa, we can calculate a weighted average group cost of equity of 14%, which closely approximates that from the CAPM model. Looking to 2028, reducing interest rates and reducing inflation differentials, together with improved credit ratings I spoke about early on, should result in a stable cost of equity at around 14% or in fact slightly lower. This is calculated on a weighted average basis as well as on a CAPM basis.
Let me conclude with four slides. Our 2028 results are expected to be delivered through strong performance from all of our four business units. From a banking perspective, you heard earlier we have a differentiated CIB business which is well diversified and operates at tremendous scale and which has significant opportunity to grow. CIB is expecting strong revenue growth and a declining cost-to-income ratio to drive ROE higher to within a 22%-24% target range. Our BCB business has a strong deposit core with a recurring transaction franchise and a large opportunity to capture the accelerating economic growth in East and West Africa. BCB is anticipated to maintain a strong ROE of between 35% and 40% while focusing on much improved operating leverage.
Today, you also heard about our large and diverse and growing PPB franchise with a significant opportunity to grow our transactional account base as well as focusing on scaling our important retail banking franchises in Africa regions. PPB is expecting a strong uplift in ROE, as you heard from Funeka, to between 26% and 30% through strong growth, importantly in capital-light non-interest revenues. Turning to IAM, you heard from Yuresh Maharaj we have an established franchise with scale in South Africa and a very sizable opportunity to drive bank assurance growth through closer collaboration and integration across all of our business units. IAM will continue with strong earnings growth of greater than 10% per year and drive the ROE higher to between 24% and 27%. This slide summarizes the targets for the group to 2028.
We have a track record of delivery, and we are confident that we will deliver our core targets of HEPS growth between 8% and 12% a year and a return on equity in the 18%-22% range. We expect strong growth from all of our large markets and such that African regions is likely to be around 45%, 45% of the group's earnings by 2028. We clearly acknowledge we live in a volatile, uncertain, complex, and ambiguous world. Yet as an organization, we have consistently demonstrated our strength and importantly, our adaptability in the face of challenges. As you can see here, over a long period, our robust risk frameworks, diversified business units, geographical spread, and forward-thinking leadership enables us not only to withstand uncertainty but to thrive in uncertainty.
Our resilience is underpinned by a strong capital base, active capital management processes, and the proven ability of our fortress balance sheet to withstand shocks. We remain client-led and stand ready to support our clients through the cycle. This unwavering commitment ensures that we remain a trusted partner, providing stability, guidance, and tailored solutions to help our clients navigate complexity and for them to succeed. These strengths have enabled us to deliver steady growth and consistent performance. Other than during the COVID crisis when we did not pay an interim dividend due to regulatory requirements, Standard Bank Group has not missed a single dividend payment since our listing in 1970. Standard Bank has endured, flourished, and grown for 163 years. We look to the future with confidence, and we have substantial grounds for our optimism. We have a strong track record of delivery despite volatility.
We will continue to drive client-led growth, and this growth will be evident in our expanding footprint and the increasing number of clients we serve, leading to higher client activity levels, higher revenues, and higher earnings. We will continue to manage capital diligently and deliberately, balancing growth and distributions to shareholders. Finally, we will continue to deliver attractive returns and increasing shareholder value add. In summary, we have a strategy which is working. Supported by favorable macroeconomic conditions, we are confident in our strategic direction, our unique position to capture the trends driving Africa's growth, and our ability to deliver our 2028 financial targets. Today, you have heard how we have chosen to compete and win in our selected markets and segments to drive Africa's growth.
Our disciplined approach to capital management, combined with a relentless focus on value creation, ensures we remain well equipped to achieve attractive returns and continue increasing shareholder value.
It's clear to all of us from a position of undeniable strength. We look forward to the next chapter with optimism and determination. I will now hand back to Adam to facilitate the Q&A. Thank you.
Thank you very much, Arno. I will now slow down my speech significantly to give time for the Q&A to be set up. Thanks for your attention and your patience so far. We will move to the Q&A session. As we prepare for the Q&A, let me take you through some of the ground rules. We have around 50 minutes for the presentation. For those of you in the room, please raise your hand. We will have a microphone brought to you. For those on the Chorus Call, we will open a line, and you'll be able to ask questions. For those on the webcast, please submit your questions through the Q&A function.
When you ask a question, please state your name, the organization you represent, if any, and the person you direct the question to. We will start with persons from the room, we'll then move to Chorus Call, and then to the webcast. By now, I was hoping that this setup was finished. But we're almost there, but maybe the participants can make their way to the stage, please. Thank you very much. It's now 4:07 P.M. in Johannesburg. We will do this until around 4:55 P.M., and leave for some closing remarks to have you to finish by 5:00 P.M. as promised. Let us start with questions from the room. Do we have any takers in the room? Gentleman to the left.
Hi, good afternoon. It's Harry Botha from BofA Securities. Thanks very much for the disclosure and the detailed presentation. I'd like to get a sense around the non-interest revenue growth potential in corporate and investment banking. You know, it's continued momentum in global markets. Could you also maybe give us a sense of how the TXB and Investment B anking growth fits into that? In terms of BCB, it seems like there's a much better revenue growth outlook compared to what we've seen in the past while. Could you maybe help us in terms of how much of that is, let's say, macro-related versus reaping some of the investments that you've made?
Thank you, Harry. Let's go to Luvuyo first.
Yeah, thanks for the question, Harry. I mean, our NIR and specifically fees and commission would benefit from a couple of factors. The first is off the back of the loan origination. We generally generate fees up front for that business, and you'd have seen that in 2025. You know, subject to a constructive business environment with confidence, we think the momentum we've seen in ECM and M&A will continue. As we've shared a couple of weeks ago, we're still seeing a lot of momentum on that front. The last piece is our payments business, especially in transactional banking. We delivered over 10% growth in this prior year, 2025. We believe that it's a key part of our growth going forward.
When we think about our NIR, we believe that fees and commissions will grow actually slightly quicker than trading revenue going forward, just given the high base of trading revenue.
Thanks. Thanks, Luvuyo. Bill, the second question please.
Good. On revenue growth in BCB versus the last couple of years. Given the shape of the balance sheet with liabilities being more than twice assets, we've obviously had to digest a lot of endowment downdrafts over the last couple of years. Going forward, obviously, most of that will have come out of the system. What we expect as we go forward with a strong liability growth specifically, we expect South Africa to be growing in the sort of upper single digits with Africa regions growing faster than that. In addition to that, there's quite a lot of opportunity to improve the products that we are working with at the moment. Things like our structured solutions, et cetera.
If you overlay that with client growth, the potential of bringing new product in, so we'll be working with Yuresh to develop an insurance proposition, strengthening higher margin products like international payments versus domestic payments, and improving the penetration of individual higher margin products like fleet, BizFlex, value-added service, et cetera. We think that'll give us the revenue growth that we are anticipating.
Thank you, Bill. Any other questions from the floor? Gentleman to the left.
Hi, it's Ross Krige from Investec. Thanks very much for the detailed and thoughtful presentations. Just three questions from me, I think mostly for Luvuyo. Just on the CIB credit loss ratio range, obviously, as you alluded to, you've been below that for five years now.
Is that a signal in terms of the future, or do you think over the next three years it's likely you continue to land below that? Just on the energy and infrastructure opportunity, some very large numbers that you've shown. Just keen to understand Standard Bank's market share there currently and whether targets imply market share gains and then maybe briefly just who the I guess the market leaders are in those two industries. Finally, just on Egypt, which I think a few of you have mentioned in terms of expansion opportunities. Just keen to understand what in particular, other than I suppose the Gulf flows that you've talked to, are there any product segments or client segments that you find particularly interesting in Egypt or exciting?
When you think of expansion in Egypt, is it both organic and inorganic? Thank you.
Thank you. [audio distortion] .
Yeah. Thanks. I should have taken notes of that, but I'll see if I remember all of them. Look, I think, starting with Egypt, a couple of things are happening in Egypt. The thing most attractive to us is, as you point out, the trade flows between the Gulf States into Egypt. That is very interesting. The more we're spending time in Egypt, we are coming across many of its large, homegrown conglomerates or corporates looking for growth and coming further south into Sub-Saharan Africa. In fact, we're seeing that as a trend that has surprised us, even going in what we thought would be possible. That plays directly to our strengths.
Secondly, the trade flows from China to Egypt are also quite massive, and we trying to play, you know, our cross-border role in capturing those flows. In the short term, we'll see the trade finance with tier one banks as an example and some M&A and funding opportunities for Egyptian headquartered multinationals looking for opportunities down south. You asked two other questions.
Yeah, first question number one is the CLRs. I think-
CLR. Yeah. Look, I mean, I think our planning in this horizon assumes that we'll probably be below the bottom range of that. The reason for that is twofold. Even though it doesn't apply in our CLR, but sovereign risk tends to have obviously a wider impact into the corporate side. As Arno said, we think in the short to medium term that is constructive, although, you know, it's fragile. I mean, a deep economic shock like potentially what the conflict brings today could obviously undo that. That would be number one. Number two, our position tends to be quite lumpy. One name going really bad could, you know, pierce into that range. We unlikely, we.
Well, actually, we're not going to change the guidance. We've also tested ourselves whether we're being conservative. Is that a sign that we're being conservative and are leaving opportunities on the ground? When you consider the loan growth that we're achieving across the continent relative to our competitors, you know, that clearly shows that you know that we are not conservative and that low credit loss ratio is more effect on how we've managed and picked up early situations which could go bad and restructure and work with clients. On your question on infrastructure, it's. I'll split it into two. We still believe the large funding opportunity specifically around logistic infrastructure in South Africa is yet to come.
That will be less of an impact on our forecast that we show here. Africa regions has definitely been a big part and we think will continue to grow. We tend to actually compete there with the large internationals we compete with them on sovereign and infrastructure projects. In a lot of instances, we partner with them. We definitely are assuming that we'd be able to win market share in that opportunity.
Thank you. Any takers in the room? To the right. All right.
Thank you. James Starke from RMB Morgan Stanley. Two or three questions from me, please. First one is on share buybacks, so perhaps for you, Arno. If you could please just elaborate on some of the factors you consider when assessing buybacks and if you could particularly link that to any valuation multiples when you make that determination. Sort of, what levels do you consider buybacks acceptable? The second one is for Funeka regarding the ROE target for PPB and specifically the VAF unit. It's been a drag on performance for some time. You've guided to return to profitability in 2026. If you could just share with us some detail on how you see the VAF ROE contributing to the uplift in PPB's ROE. The last question, I think back to you, Arno, just regarding ICBC Standard Bank.
I see it is in your outlook to 2028. Just the position on the group. I know at one point trying to exit. Is that still the case? Or is it that it's quite likely to continue from here? Thank you.
Thank you, James. Maybe Arno take question one and three.
Sure. Thanks very much. Thank you, James. On share buybacks, our first priority for excess capital is to put it to use.
For shareholders in terms of organic growth, we wanna support our clients. We see lots of opportunities in our portfolios. Loans and advances growth will accelerate, so we are seeing an expansion in risk-weighted assets, and that will take some capital. We also continue to look at other opportunities, inorganic, and then we have a track record, like I showed on the stage just now, of thinking about small- and medium-sized acquisitions, the latest one being Liberty. James, you would know we're also looking to put capital behind our Ghana subsidiary. I also remind you we did a rights issue in Nigeria, not too long ago, about a year ago or so on. If there's capital left over after that, of course, ordinary dividends to our shareholders is very important, between 45% and 60% payout ratio.
Practically, it probably will be between 50%-60% payout ratio, and anything above that, we'll then consider share buybacks. To come to your question on what factors from a valuation point of view, yeah, we would look at the current share price, the current valuation of the group. We would look at our forward-looking plans. We certainly also think about what the analysts, like yourself, see for the group going forward and what valuation you're implying in your models. Considering all of that, we, together with the board, then make a decision on share buybacks if that offers value or not. At least on an ad hoc basis, we don't have a dedicated program. I think it has been quite successful. In 2024, we did ZAR 4 billion. In 2025, we did ZAR 3 billion.
At the results presentation, I mentioned that in 2026, we probably will use most of our capital, and there won't be much opportunity to do meaningful share buybacks. In 2027, 2028 and onwards, we probably, hopefully, will have opportunity to do more share buybacks and continue to add value in that way. On ICBC, yeah, I think it's correct. In the past, we've sort of indicated an exit, a near-term exit. I think it's quite clear now we are gonna be holding onto this asset for the medium term. In our planning horizon to 2028, we keep ICBC as part of our franchise, as part of our rather our group earnings makeup.
Thank you, Arno. Funeka, VAF?
Sure. Thank you. Thank you, James. Three points. The first one is that we have reviewed our ambitions in this business. We no longer have the same ambitions that we perhaps have in mortgages, where we are an industry-wide player. We have repositioned this as an offering that we will largely offer to our existing clients, and this is really because we can see there are better areas for us to deploy that capital where we have better execution capability. Its impact in our four-year plan, which is our three-year plan, which is our next point, is to reduce loss as well as economic loss. We do expect it to at least cover its cost of equity, even though it's an overall franchise offering.
Lastly, to say the meaningful drivers of ROE to 2028 are actually structural changes in the business. Structural change in our revenue mix, NII, NIR, structural change in our lending book, so more IR than SA, more unsecured than secured, of course, core banking and the work of scaling Africa regions. Thank you.
Thank you, Funeka. Any other questions in the room? Lady to the right.
Good afternoon, everyone, and thank you for such an insightful presentation. My name is Thembi Khumalo from Prudential, and my question is with regards to the digital assets opportunity that Margaret shared with us. I'd like to know, what role do you think Standard Bank would need to play in mainstreaming the adoption of digital assets across the various markets in which you operate?
Thank you. Margaret?
Thank you, Thembi. I think that digital assets do have a very important role to play going forward in terms of offering clients options and choice. I think as we said, with regards to speed and reduced cost, I think it's a very important part of the value proposition to clients. CIB is taking the lead in terms of making sure that we prepare the organization to be able to offer these solutions. As I said, I think our focus areas will be stablecoins, tokenized deposits, custody and investment solutions. At the moment, our approach in that regard is to look at partnerships, so providing the on and off ramps and making sure that we protect our deposit base in the process, and we're doing that through partnerships. I spoke about some of them.
We've got a partnership with a tier-one bank that's coming up in the near future. I think that we are really making sure that we get our architecture sorted, also our blockchain capability. I spoke about the fact that for the past five years already, we've been focusing on blockchain capabilities through CIB's Aroko platform. I think we've got a strong foundation that we're basing this on, and we're busy learning. I think ultimately from a client perspective, it's really making sure that we have a multi-rail strategy so that we can address our clients' needs. I think people often ask us about the spread of fees and commission or where these things will go across the multiple rails.
I think at the end of the day, the most important thing for us is to make sure that we offer our clients the best solutions and that we really look at the client value proposition as much as we look at the underlying products and what their contribution would be.
Thank you, Margaret. Any other questions? Yes, to the left, lady. The first here, and then go back, next after this. Thanks.
Thank you. Hi, my name is Mandisa Zavala. I am from Alexander Forbes. I'm just interested in your take, anyone can take the question, with regards to, I guess, the sovereign part of what is happening currently in the world. We're sort of moving from this unipolar world into more multipolar, and there seems to be less and less drive towards different countries working together. And we're seeing more and more of that coming from different sovereigns, and in particular, you know, the U.S. has been quite large in that. I recognize that a lot of your growth strategies talk about going into different markets, in particular, Africa markets. There's a slide where you talk about China.
Do you at all have conversations around what the future might look like if we perhaps see a lot more protectionism as opposed to a world that we've currently known, which is a lot more open?
Thank you for that. Thanks, Sim. Do you wanna-
Yeah, I'll take that. Mandisa, that's a great question, and it's at the heart of the job of the executive. We spend a great deal of time thinking about geopolitics in order to understand the forces in the environment that determine the basis on which we compete. We do so in order to understand what our clients will do and what they will need, and we do that in order to understand what regulators and politicians will do in the space of trade, for example. We don't take any political positions, just to emphasize that, but we figure out what our clients will likely do in the various scenarios.
One philosophical position we do take, and it's one which this institution has taken since 1862. It is to assume that the world will continue to move in the direction of a rules-based system where the WTO and trade is all based on rules. That the process towards protectionism is an aberration just because of what has happened in world history over the last several hundred years. That mercantilism is just an aberration as well. We understand the risks associated with it. Importantly, we look at what the countries we serve want, which is to trade with the whole world. That's the case in South Africa, that's the case in Kenya, that's the case in Nigeria, and we position this institution to serve our clients as they trade or as they make investments.
I'm happy to tell you that straight after this meeting, I'll be attending an event at one of the embassies of one of the major powers, and over the weekend, I'll be going in the opposite direction. To quote Kwame Nkrumah in that context, "We look neither east nor west. We look forward.
Thank you, Sim. Got a question in the back?
Good afternoon. Sihle Zulu here from Vunani Fund Managers. Following your FY 2025 results, which showed continued strong momentum in the energy and infrastructure space, I have two questions regarding your market focus, which I believe is directed to Luvuyo. The first question being, given the decrease in load shedding in SA, are you seeing signs of market saturation in domestic large-scale renewables, prompting a strategic pivot toward fast-growing opportunities ex-RSA? Second question is, are you witnessing an increased influx of distressed smaller scale energy providers seeking restructuring or funding to upgrade their technology to align with the shifting regulatory landscape?
Thank you very much. Luvuyo.
Yeah, thanks for the question. On your question around the shift between SA and ROA, we are definitely seeing an increase in projects coming up out of north of South Africa, but that is not because South Africa has slowed down. To the contrary, while the government programs, the REIPPPP has definitely slowed down on the energy generation, the battery storage has still been very active. One of the bigger trend, though, is the funding towards self-generation or decentralized energy, where either corporates or aggregators are, you know, starting the projects and running it. We think it's better risk. We are able to price for risk better in that space, and the margins are still attractive.
Of course, one of the next key investment projects around energy has to do with the transmission in South Africa, which we also think, you know, subject to one or two things between the government and Eskom, that there are appropriate funding structures that are being put in place to make that particular project also fundable, which would require quite a large funding ask. Yes, African regions is definitely growing in terms of energy, but South Africa is still, from just a sheer scale, will still remain very attractive. We are very focused. We don't chase market share when we look at this project. We've built very deep relationships with credible EPCs. We back the right clients.
Our portfolio, in the space, we haven't seen.
Any strain and any need for any restructures as yet?
Great. The second question was around smaller distressed.
Yeah, that's it.
Okay.
That's what I've just answered.
Okay. Okay, cool.
Yeah.
Any other quest-
I've answered it clearly.
Mm-hmm.
Yeah.
Any other questions? Yes.
Good afternoon, everyone. My name is Tinashe Kambadza from Krutham. Two questions from my side, the first one for Funeka and the second one for Margaret. Just on the home services, based on your market share, you do mention that you'd like to maintain the number one positioning in the market. But if you look at the market share, obviously it's declined slightly from 2019 - 2025. Just considering that, the competitive landscape is a bit more intense, given that some players in the market are a bit more, call it nimble or maybe more niched in that particular market. Just wondering what you guys are doing in terms of making sure that what you're differentiating yourselves with to make sure that you actually maintain that particular market share.
Just for Margaret on the second question on payments. I mean, the landscape based on regulations, right? Is changing. SARB is liberalizing the payments landscape and there's more competition from the fintechs. I'm just wondering, and maybe Sim you can also add to answer this as well. I'm just wondering, just from a group perspective, where you guys are positioning yourselves. I know you mentioned building, you know, partnering or maybe buying. But I'm just wondering in terms of where you're seeing opportunities to either, you know, I mean, to actually partner with the fintechs or maybe where you're saying that this is a space where it's better for you guys to actually maybe, you know, build your own kind of systems in terms of how the landscape is actually changing.
Thank you.
Thank you very much. I'm gonna go first to Funeka-
Sure.
the home services competition.
Thank you. Thank you, Tinashe. Absolutely right that you would've seen a decrease in our market share from an asset perspective on mortgages. We still originate the largest amount of new business, but not the 33% that we would've traditionally done, and simply because of pricing. What we've had to do is to pivot to instead of looking at the market share of the actual loan book, to really make sure that we are focused on the market share of the profit pools. As I said, they were trapping about half of the profit pools, and we did that because we were extremely disciplined on pricing and we were extremely disciplined on risk and also disciplined around costs, particularly acquisition costs. We won't change those. We're not gonna deviate on those foundations just to increase
Just to maintain the actual market share of the loan book. The market share of the profit pools, how we're going to do that. Firstly, just as we spoke earlier with Yuresh, a lot more insurance. We see a lot more opportunity to do more insurance lines. We currently do a lot on homeowners cover, the bricks-and-mortar insurance, but we see a lot of opportunity in particular on homeowners cover, contents cover, as well as in life of homeowners. Whenever things go wrong and Thabani has to deal the collection, we often see exactly what Yuresh says, people are under-insured. The solutions that Yuresh is building, we see a big opportunity of almost embedding it into our mortgage processes. Secondly, we want a greater participation, for lack of better word, in value-added services that are linked to housing.
For example, today we are doing a lot of solutions through our LookSee business to optimize the affordability of utilities, because that's what. It's one thing to afford the installment of the house, but you still have to deal with utilities. We are fully focused on those, and we see quite a large pipeline of things, of value-added services that we can do in the housing industry, just given our scale and entrenchment there. In summary, we want to protect the market share of our profit pool.
Thank you, Funeka. If you want, Margaret, you want to come in?
Yeah. Thank you very much. I mean, I think it's such an important question, and it's not something that's just relevant to South Africa and the SARB, but certainly something that's happening across the continent in terms of how regulators are evolving from a thinking perspective. I think that's kind of on the immediate payments, and if we look at the mass market as well as the digital payments, and I think both of those we track where the regulations are going to make sure that we adapt quickly. I think in terms of the SARB specifically and making sure that payments are more accessible, I think Funeka touched on it in her presentation to say that we welcome this because we feel that it's good for our clients and we also want to move away from cash.
I think the whole industry wants to move away from cash. I think those developments are important. With regards to partner or build, I think it's both. I think we want to do both. In fact, I think in terms of partnering with fintechs, over the last 10 years we've been doing that, and I think some of those have been really successful. I think it's something that's top of mind for us to say, how do we make sure that we get really good at partnering. Also in terms of corporate venturing and taking stakes in some of these because some of them have done really well for us. I think it's important to say, as we said in the presentation, that we don't just look at the transaction alone.
I spoke about that flywheel and the three circles in terms of upselling and cross-selling. It's making sure that the products are really good, but that the client experience is really tight and the relationship so that we can drive all of those.
Thanks, Margaret. Funeka, did you want to add?
Sure. Just to really add three points. The first one is that we are very much looking forward to the proposed cash utility, because for two reasons. In our world, we have significantly reduced our cash ecosystem, and we think that it is a good thing to run one cash utility where you can actually have cash devices everywhere, particularly in informal markets that will trap a lot more cash into the banking system, formal system. We are also believe that PayShap is a good way of enabling, then having trapped the cash into the system, enabling really cheap low-value payments. We think from an economic perspective, it works. While the gross amount might be low, the total amount that the client would pay is low, in reality, the cost would also be lower.
The margin would be pretty much similar to what we make on the EFT. More than anything, it would formalize our economy more to and a greater extent contribute to GDP and contribute to the tax base.
Thank you, Funeka. I wanna make sure we also involve the people online. Maybe we go to Chorus Call first. Before we do that, Clem, do you have a question?
Thank you. Can I go ahead? My compliments on the presentations. Thank you. As always, I'm a numbers person. Can we look at on slide 55 where you speak about being the Africa's best private bank? How would your friends at Investec and FirstRand agree with that statement?
Friends?
Yes, they are your friends, aren't they?
Mortal enemies.
Thank you. Okay. On slide 59 in a similar vein, what is your relationship with SA Home Loans? I know you were one of the founders, and it seems to be undergoing change. Margaret, you mentioned the connection with China, and I wondered whether the ICBC connection was of any value there. On slide 113, you confuse me with the numbers, and I'm easily confused. These numbers on these countries, what do they mean?
Okay.
Thank you.
Thank you, Clem.
Sure.
Okay. Maybe shall we start with the first one, Funeka?
Sure. I can't speak on behalf of our competitors, but what I can say, the reason why we are clear that we are Africa's best private bank is because of the scale we have. What we said earlier is that we are top ten in African regions, for example, in seven of the 14 countries, and that we are starting to make real progress in large markets such as Kenya. That in South Africa, we've got relationships with one out of every two clients in private banking. Lastly, that our offshore operations give us a real differentiated ability to help our clients to really diversify their income so that their growth journey is not three steps forward and 5 steps back.
When we put that together, plus the other accolades we receive, we think we have a very strong footing, and we believe that we will continue to build a much bigger, continental, very connected private bank going forward.
Thanks, Funeka. Do you wanna take home loans? Or Margaret, do you wanna take home loans?
SA Home Loans.
SA Home Loans.
SA Home Loans.
Yeah. SA Home Loans remains quite an important business to us, and in two ways. Firstly, we've got a shareholding there, but SA Home Loans has got other relationships with other banks, of course, and that is all right. I think that we make sure that the spoils that are generated out of that are equitable and therefore go to the existing shareholders. We continue to work very closely with other shareholders to make sure that that vehicle is used to get into pockets of homeownership that the traditional banks would not traditionally trap.
Thank you, Funeka. The third question, Margaret, I think was a reference therefore for you.
Yes. Thank you, Clem. I think that Africa-Asia corridor is an important one, for our clients to make sure that we offer that as an option. Globally, I mean, banks do this globally very well. I think we may be the first one in Africa to be introducing it, but it doesn't mean that banks all over the world aren't doing that already. We introduced CIPS, as I mentioned. We've introduced through CIB. We've been driving ZAR 9.5 billion since its launch, which only really happened late last year. I think it's done really well. Clem, most certainly ICBC played a role in assisting us in that regard. I think as I said in my presentation, you know, it's not just on payments.
It's also on areas like technology and making sure we understand the approaches that are being followed by everyone around the world and ensuring that we learn from them in that regard. What I do wanna say, what's important from a CIPS perspective, is that we may be putting that forward as a client option and a rail, but it's not necessarily at the expense of other rails because this is an area that's growing. It really is about offering our clients choice, and we make sure we stay marketable. Not at the expense of other rails, but certainly a very important rails, and it seems that our clients really are adopting it. I don't know, Luvuyo, if you wanna add to it.
No, I think it was very good.
No, good? Okay.
Thank you, Margaret. The last one, maybe Arno, clarify.
Yeah, sure.
-Arno.
Thanks, Clem. On page 113, those numbers indicate our market position relative to the other banks in that market calculated by net profit after tax. The point is here, for example, in Nigeria, it's a very large revenue pool, over $15 billion. That's why it's shown dark. We number six net market. That's why we're interested in growing more and faster in Nigeria, for example, to be able to access more of that market. Just an example. There's other markets as well, of course.
Thank you, Arno.
Mm-hmm.
Is there a follow-up question, Clem?
Yeah. That presumably focuses.
Just sort of the microphone, please. Thank you.
The high numbers in Nigeria and in Tanzania, is it? Or was it Kenya?
Kenya, yeah.
Which we've heard about before.
Yeah.
Obviously, it focuses a mind on what needs doing there.
On what, sorry?
On what needs doing there.
Yes. More growth.
Yeah
We are focusing on these markets, and we stand ready to put more capital behind them, either inorganic or organic growth. Absolutely. That's the opportunity for the group-
Mm-hmm
to access those revenue pools.
Thank you.
We're excited about those opportunities.
Thank you, Arno. Thank you, Clem. We should move to the online. Let's go to Chorus Call. Operator, any questions on the line?
At this stage, sir, there are no questions.
Thank you. We move to webcast. Sarah, any questions on webcast?
Thank you, Adam. The first two questions are for BCB. The questions come from Baron Nkomo. What is the bridge from the ZAR 514 billion worth of deposits in 2025 to your stated ambition of more than ZAR 725 billion by 2028? The second question is around NII and NIR. How much of the 2025- 2028 revenue CAGR is expected to come from non-interest revenue versus net interest income?
Brilliant. Baron, thank you. If we look at that sort of 5.14 that we're at now to bridge to 7.25. If you go back and look at between 2020 and our projected 2028, we'll grow liabilities at roughly 9% through that whole period. In that, we see South Africa growing at roughly upper single digits, where Africa regions we've consistently grown at low double digits. Of course, as Africa continues to grow and the opportunity there we continue to lean into and becomes a bigger portion of our our total liability portfolio, we expect it to disproportionately grow the liabilities as a whole. We see in this period, we can grow probably between just at the low single digit, those liabilities. When you then look at NII versus NIR, the...
We expect NIR to go slightly faster than NII. Of course, in the period that we were budgeting, although we have nice, strong, liability growth in that period and asset growth, we do expect some endowments still to be digested in this early period. NIR will be bolstered by the points I raised earlier to Harry's question, client growth, new product growth, stronger products where we get higher margins like international payments, structured lending, et cetera. Some of the other products which, although smaller, are higher, high NII generator like Fleet, BizFlex, VAS, et cetera. That'll give us the projections that we're planning for.
Thank you, Bill. Sarah, any more questions?
Thank you. I've got three questions from Charles Russell, kind of across the board. The first question is around oil prices. Which markets are most defensive in the face of higher oil prices? The second question is in relation to PPB and BCB and scale in Africa regions. What capabilities do you need to acquire to scale PPB and BCB in Africa regions specifically? The third question is in relation to the size of the different business units in Africa regions. Can PPB plus BCB become larger than CIB over time, and over what timeframe? In Africa regions, sorry.
Thank you, Sarah.
On the first question, is it?
Oil
oil?
Which markets are most defensive in the face?
Offensive?
Defensive.
Oh, defensive. Yeah.
In the face of higher oil prices.
Look, I mean, the obvious answer is to talk about the countries mostly on the west of Africa, being Nigeria, Angola, and Ghana, where there is some oil exportation that happens with those markets. We would be worried with elevated for longer oil prices as it would transmit as a transmission mechanism into higher inflation. Even for those markets over time, over an elongated period, a higher oil prices would actually be quite detrimental because they still import quite a bit. They would be reliant and would see a quite high inflation, which could be problematic. Lastly, the issues around FX liquidity could become more of a challenge.
Okay.
Thank you, Luvuyo. The second question, maybe Bill, you wanna give a shot to start with on BCB, PPB?
Perfect. Thanks. In BCB, what we've targeted, as we covered earlier, is to ultimately get to top three in each one of the markets. Charles, you know this, it takes time in the sense that if I think of my old world, it was 2009 that we split the South Africa and Africa regions investment banking businesses and took roughly 15 years for that Africa business to be bigger than the South Africa business. Likewise, in this business, although the pace of growth is fast, I mean, we've grown in a CAGR perspective, headline earnings in Africa regions from 2021 at 30% a year. It started from a very small base and has continued to grow.
When I think of the business, we're growing clients at roughly 7% a year at the moment and assets and liabilities in the low double digits. We can keep costs in the upper single digits, which we've been doing, and then your CTI at roughly 200 basis points. You're gonna see steady growth in that business. As I said in the presentation, we definitely see a bigger gap in East and West Africa. In SADC, it'll be more sort of steady growth over this next period. We've got reasonable market shares, and that may mean that we'll look at alternatives. We may look at partnerships. There may even be acquisitive opportunities that we look at over time.
The organic business itself is a very, very good business, which as I referenced my, you know, my previous world, you can actually just by steadily focusing on it and growing it over a period of time, you can get to where you need to get to. In terms of the specific opportunity is what's interesting is that as I spend time on the continent and spend time with clients, it's amazing how fast the family-owned businesses, which is really that mid-tier segment are growing. They continue to get stronger and stronger. They're continuing to become more diversified. That is a very significant growth opportunity for us. That's where we would focus most of our attention immediately. In due course, I definitely wanna focus on enterprise and how we tackle that.
That would probably require more of the partnership that we've, you know, we would look at. Charles, I hope that gives you a sense of how we look at it. Very multi-pronged.
Sure.
Thank you. Funeka?
Yes. Thank you. Sort of three things. The first one is that, the private bank, we believe we've landed and planted enough capabilities to really scale that largely organically. There are one or two capabilities that require augmenting, but it's gonna be largely in an organic play. For personal markets, two things. Firstly, outside of Uganda, we are a disruptor, which is quite an exciting opportunity. We're not going to do what we have done. The playbook of South Africa is not going to work there. That playbook is gonna be largely disruptive. It's gonna be mostly partnerships, and it's gonna be joint ventures and some opportunities of inorganic play. It will take time, and a lot of it is not embedded in this three-year plan, but we are already starting to plant that.
We are two things. Firstly, we are gonna have an organic playbook, and then we're gonna have a very disruptive playbook where we absolutely have nothing to lose in many of the markets that are outside Uganda in personal banking. We really are looking forward to doing that. Overall, Africa regions is expected to grow faster than South Africa. Thank you.
Thanks, Funeka. Arno, do you want to?
On the last point of PPB and CIB.
Yes.
Sorry. PPB and BCB can be greater than CIB. First of all, there's obviously tremendous growth opportunities for us in all of the three business units. For PPB and BCB to be greater than CIB would mean CIB would slow down quite a bit, and I don't think that's our expectation. For now, I would say no, that's not the case. We're seeing fast growth in all three business units and attractive returns and growth prospects there. Maybe some for CM, capital markets, say 2028 or 2029, we can think about that.
It'll be somebody else's problem. I think we can say with some confidence-
Yeah
... that we don't set those kinds of targets, Charles. What we do is we follow client needs, and to the extent that the retail bank or the retail part of the business is driven by financial deepening, that'll drive that growth. As Arno says, at the moment, the size of CIB and given client needs, it's going to be the case that CIB will be large.
Right.
Just a general point, if I may, on this one. Our group has traditionally been half wholesale and half retail. If you go back to when Koki had all his hair, I mean, that was the position in the group, and it'll remain the same for the next decade or so.
Yeah. One last thing Margaret just reminded me. Of course, Insurance and Asset Management, tremendous opportunities as well in very nascent markets in those products. In the very long term or in the longer term, those are tremendous opportunities there as well.
Thank you. Maybe one more question before we have to close.
Okay. I've got a couple more questions which we can run through maybe quickly in terms of responses. The next questions relate to remittances and AI. With regards to remittances, how do you monetize the remittance opportunity in your home country while remaining compliant with FICA and other requirements? The second one related to AI, what are the relative dynamics currently between cost savings and revenue enhancements due to AI?
Maybe Margaret, do you wanna take that?
Great. Yeah. Thank you very much. Thank you, Sarah. I think, let me start with remittances then. I think, you know, as we said, payments are at the heart of what we do. We know that domestic payments as well as cross-border payments are very important, and remittances play a very important role. I think at the moment, we've spoken about the fact that we've formed certain partnerships to make sure that we make remittances possible across the continent. All of those, I think, are aligned with local regulatory requirements. Certainly this is an area that's evolving very much top of mind for us to make sure that we remain competitive. I think that the approach per country is quite different.
Through, I think through all of our business units, it's something that we monitor and stay close to. From an AI perspective, I think it's important to start off by saying that AI is definitely a long-term play. However, having said that, in the short and medium term, we have very clear focus areas in terms of what we want to do. I spoke about the fact that the business units have their focus areas and AI use cases that they are driving. I think what's important there is to make sure that they address client needs and that they drive commercial outcomes, and both of those are important to us.
Making sure that they drive those commercial outcomes is something that we're actually quite deliberate about and Sim includes in our KPIs to make sure that we unlock that value as we learn, I mean, on the run. I mean, clearly it's about increasing revenue, bringing down costs, and addressing client experience. I spoke about the fact that we have more than 50 model use cases that we are driving in that space at the moment. We can already see the 20% uptick in engineering productivity. But I think as we do with all of our cost in technology, you know, we save to invest to make these things happen, so we do it within our overall cost structures. It's not additive or on top of what we do currently.
For all of those, we track our return on investment to make sure that we understand that value. I think, you know, in the long term, it'll become structural in terms of how we run our business. It's really making sure that we unlock that structural operating leverage and driving the ROE.
Thank you, Margaret. There's one more in the room. Just sort of final question back to the room.
Maybe just to end off with, Sim. I'm still upset that you and Arno are retiring at such an early age. I mean, I know in the U.S., they live to work, and Jamie Dimon is 70 already. Has the board maybe just taken note or considering to changing the retirement age that your successors can retire and exec can retire later should they so wish? Obviously, should the board wish them to stay on.
Clem, just to be clear, the retirement age is 63, and for Dr. Daehnke and me, it's 60. Frankly, the world is a stage. Each of us are a player, and there's a time to enter, and there's a time to exit. It's time for us to exit. There's a great bench strength in this organization, and you've seen part of it here. There are about 170 of them that support our executive. It's rich. That's the answer, that we will be exiting the stage.
We can't change that. For future generations, should that retirement age, I mean?
I think as the data gets better, as the board learns, and as the organization learns, they may apply their minds at that time.
Thank you. I think that concludes the Q&A session. Thank you very much for the great engagement. Sim, I'm gonna ask you to enter the podium to make the final reflections, please.
Excellent.
Should we stay or?
Thank you. No, you can stay. I'll be brief. Thank you very much, Adam. Folks, thank you very much for sticking with us all afternoon. It's been wonderful. We understand the opportunity cost of spending all of that time here, and we hope that the great interest and attention you have found useful as you listen to us. As I said in my presentation, we had really two tasks today. The first was to show that we are uniquely positioned to win in our markets, and the second one was to show you that we will reach our targets to 2028, and we tried to show you exactly how we're gonna get there.
I think that the chief executives of our business units have done a great job in giving you the detail and providing you with clear and systematic descriptions of their capabilities, of the markets in which they are competing, and how they intend to win in those markets. There's very little doubt but that they will win. Our Chief Operating Officer and our Chief Finance and Value Management Officer have been equally systematic in telling you their story. Our CFO, of course, has shown you that we have the resources that we need to compete and to win. Our financial plans track well against the expected macros and we will be resilient to all the shocks that he made reference to.
Our path over the next three years includes both making the necessary investments to grow, as well as making sure that we enjoy the returns, and deliver those returns to our investors. With that, I wanna thank you all for being here. All the materials will be available on our Investor Relations site. For those watching online, thank you so much for joining us. For those that have been here with us, there will be refreshments outside. Please join us and ask us questions, but be kind to us. Thank you very, very much.