South Africa’s biggest bank delivers record earnings

 ·19 Aug 2022

Standard Bank Group, South Africa’s biggest bank when measuring capital, said Friday that it delivered record headline earnings of R15.3 billion for the six months to 30 June 2022, up 33% from the prior period, spurred by franchise growth.

The group said it made good progress on its 2025 commitments, both strategically and financially.

Standard Bank said its South African banking business recorded a strong rebound. Headline earnings increased by 30% and ROE improved to 14.2%. Revenue grew by double digits, boosted by a strong trading performance and an ongoing recovery in activity-related fees, up 41% and 10% respectively.

The board approved an interim dividend of 515 cents per share. This equates to a dividend payout ratio of 55% for the current period, it said.

Financial highlights:

  • Headline earnings per share (HEPS): 936 cents, up 37%
  • Common equity tier (CET) 1 ratio: 13.7% (1H21: 13.5%)
  • Net asset value (NAV) per share: 12 721 cents up 11%
  • Return on equity (ROE): 15.3% up from 12.9%
  • Cost-to-income ratio: 56.0% (1H21: 58.3%)
  • Credit loss ratio: 82 bps (1H21: 88 bps)

The group said that it grew active clients by 8% over the period, to 16 million, while business and commercial clients rose 4% to 785,000 active clients.

Half of Standard Bank’s business and commercial clients are now accessing the group’s digital channels. Consumer High Net Worth has seen an 18% growth in platform customers and a 25% increase in digital transactions to over 240 million, it said.

Looking ahead, Standard Bank said that in 2H22, global growth is expected to slow as tighter financing conditions take effect. Inflationary pressures are, however, expected to fade. The International Monetary Fund is forecasting global real GDP growth of 3.2% and 3.8% in sub-Saharan Africa for 2022.

Further monetary tightening in South Africa is expected to negatively impact confidence and demand and constrain real GDP growth to 2.3% in 2022. Electricity supply issues may constrain growth further. Inflation is expected to peak in 2H22, averaging 6.5% in 2022, it said.

“We are focused on delivering continued revenue growth through our client-centric strategy, and our ability to deliver new and relevant solutions to our clients through their channel of choice, as and when they need them,” said Sim Tshabalala, group chief executive officer.

“While the environment remains volatile and uncertain, we are well positioned with strong capital ratios, an unprecedented stock of balance sheet credit provisions and a committed team ready to drive our business forward. We will continue to leverage our significant scale, unrivalled geographic footprint, and leading market positions to differentiate ourselves.

Read: Absa delivers strong interims – doubles dividend

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