Railway sleepers for Beira-Zimbabwe line to be manufactured at Dondo - Mozambique
Standard Bank CEO Sim Tshabalala. Picture: Martin Rhodes
Standard Bank Group said on Thursday a better contribution from banking in the rest of Africa helped the lender grow profits in the first half of 2019, even as loan write-offs climbed.
“Standard Bank Group’s African-focused strategy has delivered continued headline earnings growth, driven by the strong underlying momentum in our core operations,” the continent’s biggest lender said.
The rest of Africa contributed 34% of banking headline earnings, from 32% in the first half of 2018. The main contributors were Angola, Ghana, Kenya, Mozambique, Nigeria and Uganda.
Standard Bank Group said total profit attributable to ordinary shareholders grew 3.8% to R13.2bn in the six months to end-June.
The group, led by CEO Sim Tshabalala, raised its interim dividend 6% to 454c a share.
Profits grew even as total credit impairment charges rose by as much as a fifth, albeit off a low base, with write-offs against loans and advances surging 44.4% to R5.2bn.
The group’s credit-loss ratio lifted to 76 basis points from 62 basis points a year before.
However, the group said its credit-loss ratio was expected to remain at the lower end of its target range of 70-100 basis points.
Standard Bank said “strong balance sheet growth” in the period supported net interest income, which rose from R28.7bn to R31.3bn.
On the other hand, pressure on fees and “continued customer migration to digital channels” slowed non-interest revenue growth.
The lender said while flagging global growth and the US-China trade war remained key risks to the global macroeconomic outlook, sub-Saharan Africa was expected to “remain on its recovery path” in 2019 and into 2020.
“East Africa should continue to see robust growth. West Africa is expected to experience a sustained pick-up, driven by a recovery in Angola and Nigeria and continued strong growth in Ghana,” the bank said.
But given SA’s fiscal constraints and weak consumer and business confidence, domestic consumption and investment “are likely to remain subdued”.
“Whilst there may be headwinds in certain markets, the diversity of our businesses and breadth of our footprint provide us with some shelter.”
By Nick HedleySource: Herald Live
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