Standard Bank, South Africa’s biggest bank by assets, has warned that profits for the six-months ended June are likely to decline substantially as a result of the impact of Covid-19.
“Despite considerable effort, the pandemic appears to be gaining momentum in certain of the markets in which the group operates on the continent, particularly in South Africa,” it said in an operational update.
“Elsewhere in the world, countries are battling with a second wave of infections. The path from here remains uncertain and this continues to weigh on sentiment and demand.”
Standard Bank warned that headline earnings per share is expected to be between 30% and 50% lower than the reported HEPS for the six-month period ended 30 June 2019, translating into a decrease from the comparative period’s HEPS of 837.4 cents per share to a range of between 586.2 and 418.7 cents per share.
The group’s earnings per share (EPS), is expected to be between 60% and 80% lower than the comparative period, translating into a decrease from the comparative period’s EPS of 827.0 cents per share to a range of between 330.8 and 165.4 cents per share.
The bank said that disbursements and transaction activity levels were negatively impacted by the lockdowns, in particular in April 2020. Activity levels did improve in May and June as lockdowns were eased, but in most instances, remained below pre-lockdown levels.