South Africa’s two largest banking groups by assets have moved decisively to raise their minimum monthly pay thresholds, signalling an intensifying battle for skilled talent in a sector that emerged from 2025 with record earnings. Standard Bank, the continent’s biggest lender by assets, and its rival Absa have both lifted their entry-level remuneration to more than R21,000 a month, significantly outstripping the national statutory minimum wage.
According to the groups’ respective annual reports for the 2025 financial year, Absa increased its minimum pay to R263,750 per annum, equating to just under R22,000 a month, while Standard Bank raised its floor to R22,700 monthly. The adjustments come as South Africa’s banking majors reported a blockbuster year, with combined headline earnings exceeding R135bn across FirstRand, Standard Bank, Absa and Nedbank, which together control about 83% of the industry’s assets.
The timing is notable given the broader labour market context. South Africa’s National Minimum Wage increased on 1 March 2026 from R28.79 to R30.23 per ordinary hour worked, a rise of R1.44 or approximately 5%, as announced by Employment and Labour Minister Nomakhosazana Meth. This adjustment benefits most workers nationwide, including farm and domestic employees, but explicitly excludes Expanded Public Works Programme participants who remain on a lower rate of R16.62 per hour . The banking sector’s new minima are roughly 18 times higher than the statutory floor for a standard 45-hour working week, underscoring the widening gap between financial services remuneration and the rest of the economy.
Standard Bank’s decision to raise its minimum pay follows a year of exceptional financial performance. The lender, which employs about 50,000 people across 21 African countries, reported headline earnings of R49.2bn for 2025, an 11% increase from the prior year. The group’s return on equity improved from 18.5% to 19.3%, while its cost-to-income ratio edged lower to 50.2%. In its annual report, the remuneration committee noted that headline earnings growth, a 31% rise in the share price and total shareholder return of 41% justified a 9.1% increase in the short-term incentive pool to R13.2bn – an amount nearly equivalent to Capitec’s full-year profit.
Sim Tshabalala, the group chief executive, saw his total remuneration for 2025 reach R106m, including a R67m vesting under the performance reward plan. Group chief financial officer Arno Daehnke’s total compensation came in at R79m, with a vested long-term incentive of R45.2m. The remuneration committee chair, Lwazi Bam, was quoted in the annual report as saying that while there is broad alignment between the incentive pool growth and headline earnings, shareholders have historically benefited more than executives.
Absa, meanwhile, reported headline earnings of R24.8bn for 2025, a 12% increase driven by lower credit impairments, disciplined cost management and strong momentum in corporate and investment banking as well as its rest-of-Africa operations. The group’s remuneration committee approved a short-term incentive pool of just over R4bn. In its annual report, Absa disclosed that the pool grew slightly ahead of headline earnings, reflecting improved performance and a historical payout ratio that had lagged peers. The group noted that after several years of its short-term incentive payout ratio to headline earnings (after taxation and before incentives) being lower than competitors, the committee judged it appropriate to review market relativity as performance improves.
Absa’s new chief executive, Kenny Fihla, who joined the group in June 2025 after 18 years at Standard Bank, received total awarded remuneration of just over R148m for the 2025 financial year. This figure includes R98.4m in buyout awards compensating him for forfeited bonuses and unvested shares at his previous employer, R23.3m in short-term incentives and R20m in long-term incentive awards. His fixed remuneration was R6.2m, pro-rated for the period he was employed by Absa.
The broader banking sector’s strong performance in 2025 was supported by lower interest rates, which improved impairments and encouraged corporate borrowing. Lenders with geographically diversified earnings across East and West Africa, where economic growth outpaces South Africa, reported superior results . Standard Bank’s rest-of-Africa portfolio contributed R19.7bn to its R49.2bn profit, and the lender expects this region to account for 45% of group earnings by 2028. Absa reported that its Africa Regions business now contributes about a third of group earnings and grew faster than its South African operations, with particular momentum in Uganda, Tanzania, Zambia, Kenya and Ghana.
Industry analysts note that the aggressive minimum pay increases reflect a structural shift in banking sector recruitment. Larger investment managers and global competitors increasingly target South Africa’s talent pool, forcing local lenders to offer premiums not just for executive roles but across pay grades. The strategy carries risks, however, as labour costs already represent a significant portion of operating expenses in a sector where cost-to-income ratios are under constant scrutiny.
The national minimum wage increase to R30.23 per hour took effect on 1 March 2026, applying to most workers nationwide with the exception of EPWP participants and learners in learnerships, who are covered by separate schedules. The Department of Employment and Labour has indicated that enforcement will be carried out by labour inspectors and the Commission for Conciliation, Mediation and Arbitration, with violations potentially resulting in fines and compliance orders.
For the banking sector, the decision by Absa and Standard Bank to set minimum pay at more than R22,000 a month represents a calculated investment in talent retention and attraction. Whether the strategy delivers the expected returns in productivity and innovation will depend on how successfully these lenders translate higher payroll costs into sustainable earnings growth in the years ahead.