Strong rebound for South Africa’s largest bank

 ·19 Aug 2021

Standard Bank says its South African business rebounded strongly in the six months ended June 2021, with earnings almost triple that of the first half of 2020.

Client demand and activity improved, disbursements and fees recovered, and credit charges declined from very elevated levels in 1H20, the lender said.

Headline earnings improved by 52% toR11.5 billion, with headline earnings per share (HEPS) up by the same margin to 721.4 cents per share.

Standard Bank said its Africa regions’ contribution to 1H21 group headline earnings was 35%. The top six contributors to Africa Regions’ headline earnings remained Angola, Ghana, Kenya, Mozambique, Nigeria and Uganda.

Return on equity (ROE) was 12.9% (1H20: 8.5%), and taking into account the momentum in the underlying business and the group’s strong capital position, the SBG Board has declared an interim dividend of 360 cents per share, representing a 50% dividend payout ratio.

The number of employees at the bank declined to 49,662, from 50,707 a year ago –  a loss of 1,045 employees.

Sim Tshabalala, Standard Bank Group chief executive officer, said: “The first six months of 2021 were another exceptionally difficult period for many of our clients, staff and stakeholders but we are now hopeful that the worst phase of the pandemic is behind us.

“Notwithstanding these continuing strains, some early signs of recovery are evident in the Standard Bank Group’s (SBG or the group) financial results for the first half of 2021 (1H21). Our underlying business has strong momentum and, relative to this time last year, we have seen a recovery in client activity, an improved outlook and lower impairment charges.”

For South Africa, Tshabalala said that underlying revenue growth was supportive although negatively impacted by lower interest rates period on period and an outsized performance in trading revenue in the prior period.

“Despite tight cost management, the decline in revenues drove negative jaws. Credit impairment charges halved but remained above 1H19 levels. Consequently, Standard Bank Activities’ reported headline earnings of R10.9 billion, up 41% on 1H20, and a return on equity of 13.3%.”

Liberty returned to profitability and ICBCS continued to perform well, he said.

Consumer & High Net Worth clients (CHNW) in South Africa climbed 4% over the period, to 9.72 million, while in the rest of Africa regions, customers in this segment grew 6% to 5.26 million.


“The global backdrop is expected to remain favourable, supported by sustained low interest rates, continued fiscal stimulus and consumer demand,” said Tshabalala.

“In South Africa, while the recent unrest has dented consumer, business and investor confidence, we do not believe it will meaningfully derail the nascent economic recovery in the near term.” He said that the country’s GDP is expected to grow 4% in 2021 and interest rates are expected to remain unchanged for the remainder of the year.

“Unforeseen spending pressures are a risk to the fiscal outlook. Structural reform implementation remains key to sustainable growth and job creation,” the chief executive said.

The group said its performance trends in the second six months of the year (2H21), and for the twelve months to 31 December 2021 (FY21) overall, will continue to be impacted by the base effects of 2020.

The bank said that FY21 headline earnings per ordinary share and basic earnings per ordinary share are expected to increase by more than 20% when compared with those in the 12-month period ended December 2020.

Read: Standard Bank to open branches inside Pick n Pay stores in South Africa

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