Standard Bank has reported a 4% increase in headline earnings at the halfway stage of the financial year, and has reaffirmed its 2024 guidance for its three core metrics.
Headline earnings for the six months ended June rose to R22bn from R21.23bn a year ago, while headline earnings per share increased to 1,328.7c from 1,280.6c before.
An interim dividend of 744c per share was declared, up 8% from the previous year.
Return on equity at 18.5% was within the group’s target range of 17%-20%.
“This result is underpinned by strong organic growth driven by our growing client franchises, our increasingly digital clients, and our continued diligent allocation of capital,” said CEO Sim Tshabalala.
The results were also boosted by continued franchise growth in the banking businesses and robust earnings growth in its insurance and asset management business.
Active clients grew by 5% to 19.5-million, with growth recorded in both SA and Africa regions. Digitally active retail clients in SA grew by 7% as more clients transitioned to convenient digital channels.
In the banking unit, headline earnings grew by 6% period on period in rand, and a robust 19% in constant currency.
Gross loans and advances grew 3% period on period to R1.7-trillion.
Deposits increased 2% to R2-trillion, and 6% in constant currency. In SA, deposits grew 4%, supported by growth in term deposits. In Africa Regions, deposits increased 17% in constant currency and by more than 20% in the East and West Regions.
Net interest income grew 7% driven by average balance sheet growth, higher margins and the inclusion of income on liquid assets recorded at amortised cost.
Net fee and commission revenue increased by 4% to R 15.1bn due to growth in the active client base, card-based commissions, electronic banking fees, and documentation and administration fees.
The Insurance & Asset Management franchise headline earnings grew 19% to R1.6bn and ROE improved to 15.5%. Insurance operations earnings rose 15% to R2.1bn supported by an improved retail persistency experience, lower new business strain, as well as a risk claims experience that remained in line with expectations.
Insurance operations’ new business value of R1.6bn was 13% higher than the prior period mainly due to increased sales and improved margins.
Asset management operating earnings decreased 19% to R472m, driven primarily by the effect of the devaluation of the Nigerian naira on translated first-half earnings.
The group said inflation was expected to continue to moderate providing scope for interest rate cuts. That, together with ongoing policy reform and improved business and consumer confidence, would support economic growth.
The group reaffirmed its 2024 financial year guidance for its three core metrics. It expects banking revenue growth of low-single digits in rand terms and low-double digits in constant currency and banking revenue growth at or above operating expenses growth, resulting in a flat to lower cost-to-income ratio year on year. It also expects ROE to remain well anchored in the group’s target range.
Standard Bank Research expects a 25-basis point rates cut in September and in November, and a further 50 basis points of cuts in the first half of 2025.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.