SA’s largest lender by assets, Standard Bank, expects full-year headline earnings per share to as much as halve as the sector grapples with pressure on consumers and businesses as a result of Covid-19.
Headline earnings per share (HEPS) are expected to fall by between 40% and 50% in the year to end-December, the group said in a trading update, having reported HEPS of 1,766.7c in 2019, off headline earnings of R28.2bn.
Headline earnings is a widely used profit measure in SA that excludes certain items to better reflect performance; in the bank’s half year to end-June, it reported a 44% decline to R7.54bn.
Standard Bank did not go into details in its update on Wednesday, but said in November that HEPS should fall more than 20%, and the economic outlook remained highly uncertain.
“In addition, a continued increase in retrenchments has triggered additional stage-three provisions,” the group said at the time.
Stage-three provisions refer to bad debt provisions for loans that have exceeded the 90-day non-payment threshold.
All the major banks have announced payment holidays and other relief measures for distressed customers.
The group’s results are expected to be released on March 11.
With Garth Theunissen
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