Standard Bank Group records 52% rise in H1 earnings

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Key Highlights

  • Headline earnings rose to R11.5 billion
  • Total income up 5%
  • Earnings supported by recovery in transactional activity
  • Upbeat on FY21 outlook

Johannesburg – Standard Bank Group, parent to Stanbic Bank Zimbabwe said it generated headline earnings of R11.5 billion in the first half of 2021, an increase of 52% from R7.5 billion booked in the same period last year.

Total income for the period was R64.8 billion, up 5% compared with R61.5 billion recorded in the January to June period of 2020, despite a 5% decline in net interest income to R29.97 billion from R31.20 billion.

Credit impairment charges halved to R5.8 billion from elevated levels in 1H20 but remained above 1H19 levels.

The improvement was driven by improved collections (aided by less restrictive lockdowns), improved customer risk profiles and forward-looking assumptions, lower charges associated with the client relief portfolio in the Consumer and High Net Worth (CHNW), and a net release in the Wholesale client portfolio.

Commenting on the performance, Group Chief Executive Officer, Sim Tshabalala said earnings were supported by growth in the client franchise, a recovery in client transactional activity, and fees and significantly lower credit charges.

The group’s South African business rebounded strongly, recording earnings of almost three times that of 1H20. Africa Regions’ contribution to 1H21 group headline earnings was 35%.

The top six contributors to Africa Regions’ headline earnings remained Angola, Ghana, Kenya, Mozambique, Nigeria and Uganda.

“The global backdrop is expected to remain favourable, supported by sustained low interest rates, continued fiscal stimulus and consumer demand,” said Tshabalala.

“CHNW balance sheet growth is expected to moderate from recent elevated levels, but 1H21 balance sheet growth should support average balances and net interest income growth in 2H21.”

Going forward, Tshabalala said that the group’s performance trends in the second six months of the year (2H21), and for the twelve months to 31 December 2021 (FY21) overall, will continue to be impacted by the base effects of 2020.

“Most of the interest rate cuts occurred in 1H20 and therefore, FY21 net interest margin is expected to be similar to the 1H21 level,” he said.

FY21 headline earnings per ordinary share (HEPS) and basic earnings per ordinary share (EPS) are expected to increase by more than 20% when compared with those in the 12-month period ended 31 December 2020 (HEPS: 1 002.6 cents, basic EPS: 777.0 cents).

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