Standard Bank boosts profits despite South Africa’s economic woes

Standard Bank Group has released its interim results for the first half of 2017, with the company boasting strong profits, despite tough economic conditions.

It reported headline earnings up 12% to R12.111 million, from the R10.861 million recorded in the same time in 2016.

HEPS were up 11% to 756 cents per share (from 680 cents prior), and an interim dividend of 400 cents was declared (up 18% from 340 cents last year).

Group return on equity (ROE) also improved from 14.4% to 16.1% while a management of credit impairment resulted in an overall decline in the credit loss
ratio from 105bps to 96bps.

Total income declined by 1% period on period to R49.336 million – driven primarily by weaker non-interest revenue (NIR) which decreased 7%, the company said.

South Africa performance

The group credited its robust results on its universal client offering, geographic diversity and increasingly digital capabilities, though it noted that currency movements adversely impacted the group’s reported results.

“Against a backdrop of adverse macro-economic developments, policy uncertainty and rating agency downgrades The Standard Bank of South Africa’s (SBSA) asset and income growth were constrained,” the company said in its shareholder statement.

“Despite these headwinds, SBSA demonstrated its resilience and grew its headline earnings 18% on the back of good cost management and muted credit impairment charges.”

The group warned that South Africa still faces many challenges, namely low growth, high unemployment and high levels of inequality – though these are ‘well ventilated’, and there is some positive spin.

During the period, despite business confidence levels remaining low overall, certain parts of the economy did grow, it said – there was a recovery of commodity prices, which helped the mining sector, and the drought abated, giving relief to certain parts of the country.

Further, consumers had an opportunity to catch their breath as rates remained flat and inflation trended downwards, and inflation re-entered the South African Reserve Bank’s (SARB) 3% – 6% target range in April, and remained in the range for the rest of the period, it said.

“Despite entering a technical recession in 1Q17 and being downgraded by three rating agencies during the period, SA funding costs remained broadly flat and the ZAR strengthened on average against the major currencies period on period,” the bank said.

Read: Absa rebrands Platinum accounts as Premium Banking

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Standard Bank boosts profits despite South Africa’s economic woes