Standard Bank’s profits dip on bad loans

Africa’s biggest bank by assets Standard Bank reported a 1,9% dip in annual normalised headline earnings per share in line with its own forecast and declined to give a firm 2009 outlook, saying flat results would be ”acceptable”.

Standard Bank, the third of South Africa’s big four banks to report earnings, said normalised headline earnings per share for the year to end December fell to 942,6 cents. On an IFRS accounting basis, the drop was 3% to 1 002 cents. That was in line with its own forecast for a 0% to 5% fall.

The firm, 20% owned by Industrial and Commercial Bank of China, said its credit loss ratio — bad loans as a percentage of total credit — rose to 1,55% from 0,8%. Credit impairments shot up 147%.

Headline earnings per share is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items. Standard Bank also provides normalised headline earnings per share.

Earnings were diluted by the financial effects of the ICBC transaction.

Credit impairments increased 117% at Standard Bank’s personal and business banking unit as consumers and businesses struggle to pay back debts, and 559% at its corporate and investment banking division.

Rival Absa Group, which owns the country’s largest retail bank, lifted annual profit last month and said it would maintain profit levels despite the global crisis, while Nedbank forecast lower 2009 earnings as defaults on home and car loans rise. — Reuters

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