South Africa’s Standard Bank posts 34% jump in interim profit

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South Africa’s Standard Bank posts 34% jump in interim profit

8:17 CAT | 17 Aug 2023

File photo: Reuters

Africa’s biggest lender by assets Standard Bank said on Thursday its interim profit jumped by more than a third as high interest rates helped offset rising bad loans.

The lender posted a headline earnings per share of 12.8 rand for the six months ended June 30, up from 9.55 rand a year earlier.

South African banks are amongst the largest on the continent and are known for their well-capitalised balance sheets, conservative lending practices and strong retail customer base.

But local daily power blackouts and a rapid rise in interest rates – by 350 basis points in the last 12 months – have put retail and small business customers of banks under extreme pressure, leading to a spike in bad loans.

Standard Bank said its credit loss ratio, a measure of bad loans as a percentage of total loans, stood at 97 basis points (bps), close to the upper range of its target of 100 bps or 1.0%.

The lender said it would hover at this level for the rest of the year.

Source: Reuters