Standard Bank reports stable performance in latest trading update

Standard Bank Group's financial performance for the 10 months to the end of October was broadly in line with that of the first half.

This was according to a trading update released by Africa's biggest bank by assets on Monday, which said its guidance for the full financial year to end December 31, 2023, remained unchanged. The share price was trading flat at R263.61 on the JSE Monday morning, a price that was 12.56% higher over 12 months.

Commenting on the operating environment, the bank's directors said on average, across the countries in which the group operates in sub-Saharan Africa, inflation has eased, and interest rates have declined.

"While macroeconomic reforms and stabilisation efforts have brought relative stability, particularly in Nigeria, Angola and Ghana, sovereign stress has remained elevated in Malawi and increased in Mozambique," they said. Globally, growth was resilient, with lower inflation and interest rates.

In South Africa, inflation and interest rates had also declined. Real GDP growth was subdued, "but confidence appears to be improving". Cumulative interest rate cuts for the year came to 100 bps.

Banking revenue grew by mid-to-high single digits in the 10 months over the same period in 2024. Net interest income growth was driven by book growth, supported by strong origination in Investment banking.

This was partly offset by the negative endowment impact from lower average interest rates. Non-interest revenue growth was robust. A larger client base, with increased client activity, led to strong net fee and commission revenue growth.

Continued uncertainty and market volatility supported strong trading revenue momentum. Cost growth was contained. Banking revenue growth was slightly ahead of cost growth.

The credit loss ratio was around the middle of the group through-the-cycle range of 70 to 100 basis points. Corporate & Investment Banking credit impairment charges were higher off a low base.

Personal and Private Banking credit impairment charges were lower due to a slowdown in early arrears formation and lower inflows into non-performing loans. Business & Commercial Banking credit impairment charges were lower, driven by improvements in South Africa and Africa Regions.

The Insurance and Asset Management franchise continued to deliver a robust performance. Higher earnings were driven by an improved performance in the South African Retail life insurance business and an improved claims ratio in the South African short-term insurance. business.

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