Top South African bank turned R1 million into R29 million

Kokkie Kooyman, the co-founder of Denker Capital, said that a R1 million investment in Standard Bank in 2002 would be worth R29 million today.

Kooyman is a South African fund manager, executive, and financial analyst, and a leading global authority on investment in the financial sector.

He launched SIM Global in 2004, under Sanlam Investment Management, which later merged to form Denker Capital. He manages the flagship Denker Global Financial Fund.

He is an advocate of value-oriented, fundamental business analysis influenced by Warren Buffett and Charlie Munger.

He has received the prestigious UK-based Investment Week’s Fund Manager of the Year award four times in the financials category.

The funds managed by Kokkie over the years have received a range of industry awards, including a Morningstar award and Raging Bull awards.

He recently told Biznews that Standard Bank was a great company for investors over the last 24 years, partly due to its strong dividends.

He explained that a R1 million investment in Standard Bank in 2002 would be worth R9 million today.

“The share price appreciation alone would have turned that initial investment into R9 million,” he said.

However, this is only part of the story, as Standard Bank pays substantial dividends which could be reinvested.

“If the investor reinvested those dividends back into buying more Standard Bank shares, that initial R1 million would have grown to R29 million,” he said.

Kooyman said that investors often overlook the significant impact of compounding through dividend reinvestment when measuring long-term returns.

“Reinvesting the dividends delivered an annualised compound return of roughly 16.5% per year over those 24 years,” he said.

He pointed out that Standard Bank achieved this compounding performance despite everything South Africa and the world went through during that period.

These financial shocks included the 2008 global financial crisis, local political turmoil, recessions, and the COVID-19 pandemic.