Africa’s top lender by assets has been expanding in sub-Saharan countries such as Nigeria
South Africa’s Standard Bank Group Ltd reported a 21% rise in full-year profit on Thursday, helped by a drop in bad debts and its refocus on fast-growing African markets.
Africa’s top lender by assets has been expanding in sub-Saharan countries such as Nigeria, as part of a retooled strategy that led it to exit Russia and Argentina over the last year.
Johannesburg-based Standard Bank has operations in at least 17 sub-Saharan markets including a new licence in South Sudan.
It has said it no longer has ambitions to buy or build commercial banking operations outside of Africa.
“The one thing we were keeping a close eye on ... was the rest of Africa operation,” said Imara analyst Darren Coulter, referring to a rise in earnings from the continent outside South Africa to 1,03 billion rand.
“They are focusing on the rest of Africa and they are realigning their African bank. The fact that ... headline earnings for the rest of Africa are up above 38%, that is a very good result.”
But Standard Bank, which is 20% owned by Industrial and Commercial Bank of China, also cautioned it expected subdued revenue growth this year and would need to continue keeping costs down.
South African banks are rebounding as the credit outlook begins to pick up after a recession in 2009, which squelched demand for loans and borrowers’ ability to repay existing debt.
As corporate demand for credit remains muted, Standard Bank and its rivals are concentrating on expanding elsewhere in Africa and boosting higher-margin personal loans at home.
The last of South Africa’s “big four” banks to report results, Standard followed rivals FirstRand, Absa
and Nedbank in announcing double-digit earnings growth.
Standard Bank’s headline earnings per share totaled 860,4 cents in the 12 months to end-December, up from 708,6 cents a year earlier. The lender had previously indicated earnings likely rose as much as 22%.
Headline earnings are the main gauge of profit in South Africa and exclude certain one-time items.
Net interest income, a measure of earnings from lending, rose 7% to 28,83 billion rand ($3,76 billion), compared with 26,84 billion a year earlier.
Credit impairment charges, or bad debts costs, fell by nearly 13%.
The bank said in January it lent 75 billion rand to its South African personal and business customers in 2011, nearly 50% more than the previous year.
Shares of Standard Bank, up more than 9% this year, were up 0,4% at 0900 GMT, roughly in line with Johannesburg’s benchmark Top-40 index.
Standard Bank earnings up 21% as Africa pays off
Africa’s top lender by assets has been expanding in sub-Saharan countries such as Nigeria
South Africa’s Standard Bank Group Ltd reported a 21% rise in full-year profit on Thursday, helped by a drop in bad debts and its refocus on fast-growing African markets.
Africa’s top lender by assets has been expanding in sub-Saharan countries such as Nigeria, as part of a retooled strategy that led it to exit Russia and Argentina over the last year.
Johannesburg-based Standard Bank has operations in at least 17 sub-Saharan markets including a new licence in South Sudan.
It has said it no longer has ambitions to buy or build commercial banking operations outside of Africa.
“The one thing we were keeping a close eye on ... was the rest of Africa operation,” said Imara analyst Darren Coulter, referring to a rise in earnings from the continent outside South Africa to 1,03 billion rand.
“They are focusing on the rest of Africa and they are realigning their African bank. The fact that ... headline earnings for the rest of Africa are up above 38%, that is a very good result.”
But Standard Bank, which is 20% owned by Industrial and Commercial Bank of China, also cautioned it expected subdued revenue growth this year and would need to continue keeping costs down.
South African banks are rebounding as the credit outlook begins to pick up after a recession in 2009, which squelched demand for loans and borrowers’ ability to repay existing debt.
As corporate demand for credit remains muted, Standard Bank and its rivals are concentrating on expanding elsewhere in Africa and boosting higher-margin personal loans at home.
The last of South Africa’s “big four” banks to report results, Standard followed rivals FirstRand, Absa
and Nedbank in announcing double-digit earnings growth.
Standard Bank’s headline earnings per share totaled 860,4 cents in the 12 months to end-December, up from 708,6 cents a year earlier. The lender had previously indicated earnings likely rose as much as 22%.
Headline earnings are the main gauge of profit in South Africa and exclude certain one-time items.
Net interest income, a measure of earnings from lending, rose 7% to 28,83 billion rand ($3,76 billion), compared with 26,84 billion a year earlier.
Credit impairment charges, or bad debts costs, fell by nearly 13%.
The bank said in January it lent 75 billion rand to its South African personal and business customers in 2011, nearly 50% more than the previous year.
Shares of Standard Bank, up more than 9% this year, were up 0,4% at 0900 GMT, roughly in line with Johannesburg’s benchmark Top-40 index.
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