Standard Bank’s credit losses remain elevated, even if the group has seen an increase in headline earnings.<\/p>\n\n\n\n
For the five months ended 31 May 2024 (5M24), the group\u2019s headline earnings grew by low-to-mid
single digits from 5M23.<\/p>\n\n\n\n
The group said that ZAR growth was hurt by movements in average currencies relative to the ZAR period on period, especially in Angola, Malawi, Nigeria, and Zambia. On a constant currency basis, the group\u2019s headline earnings increased by the mid-teens period on period.<\/p>\n\n\n\n
Headline earnings for banking activities grew by mid-single digits period on period. <\/p>\n\n\n\n
With the group changing its methodology for recognising interest on Stage 3 loans, net interest income has increased, as have credit impairment charges. The group\u2019s net interest margin and credit loss ratio have also increased.<\/p>\n\n\n\n
Higher average interest rates and increased client transactional volumes supported income growth over the period, but lower trading revenues lessened it.<\/p>\n\n\n\n
Although balance sheet growth has slowed, operating expense growth was contained amid cost-containment initiatives and lower performance-linked incentives.<\/p>\n\n\n\n
Growth in income and operating expenses were also lessened due to currency movements over the period, and total income growth exceeded operating expenses growth, resulting in positive jaws.<\/p>\n\n\n\n
However, as the group expected, credit impairment charges were marginally higher period on period.<\/p>\n\n\n\n
“Higher charges in Business & Commercial Banking and Personal & Private Banking (PPB)<\/strong> were partially offset by lower charges in Corporate & Investment Banking (CIB).<\/p>\n\n\n\n “In the current period, growth in PPB early arrears and nonperforming loan (NPL) has slowed.“<\/strong><\/p>\n\n\n\n “Sovereign debt provisions in Africa Regions, specifically Ghana and Malawi, were the key driver of higher CIB credit charges in the prior period.” <\/p>\n\n\n\n “The elevated credit charges resulted in the 5M24 credit loss ratio for banking being above the top of the group\u2019s through-the-cycle credit loss ratio target range of 100 basis points<\/strong>.”<\/p>\n\n\n\n