Customers queue to draw money from an ATM outside a branch of South Africa's Standard Bank in Cape Town. REUTERS, Mike Hutchings.
Standard Bank Group delivered record headline earnings of R15.3 billion for the six months to June 30, up 33 percent on the prior period.
This was underpinned by balance sheet and franchise growth.
Headline earnings per share increased 37 percent to 936 cents.
Return on equity (ROE) came to 15.3 percent, up from 12.9 percent at the same time a year before. The cost-to-income ratio fell slightly to 56 percent from 58.3 percent.
An interim of 515 cents per share equated to a dividend payout ratio of 55 percent.
Management said the bank had exceeded internal revenue growth expectations, the credit loss ratio was retained within their through-the-cycle range, and ROE moved closer to the 2025 target of 17 percent to 20 percent, the banks management said in a statement Friday.
Pre-provision operating profit grew 20 percent driven by strong revenue growth. Net interest income growth was driven by strong average balance sheet growth and margin expansion.
Net fees grew 10 percent supported by a larger client base and increased activity.
Trading revenue growth was robust, driven by client trades on the back of market volatility. Revenue growth exceeded cost growth.
Credit impairment charges were broadly flat leading to an 82 basis point credit loss ratio, down from 88 basis points in the six months to June 30, 2021.
Standard Bank Activities (group excluding ICBC Standard Bank plc (ICBCS) and Liberty Holdings (Liberty)) lifted headline earnings 25 percent to R13.6bn and ROE improved to 15 percent from 13.3 percent.
Liberty’s performance improved as the pandemic impact waned.
The integration of Liberty into the group was underway. ICBCS managed risk associated with emerging market volatility well.
The South African banking business recorded a rebound.
Headline earnings increased 30 percent and ROE improved to 14.2 percent. Revenue grew by double digits. Credit impairment charges fell but remained above pre-pandemic levels.
Standard Bank’s Africa Regions’ franchise grew revenue 26 percent driven by a larger balance sheet, higher interest rates, higher transactional volumes, a recovery in international trade as lockdowns eased, and double-digit growth in trading revenue. Africa Regions’ contribution to group headline earnings was 37 percent.
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