Standard Bank, Africa’s largest lender by assets, reported a 9% rise in first-half profit on Thursday, helped by a decline in bad debts, but remained cautious due to the slow recovery in South Africa.
Standard Bank, which is 20% owned by Industrial and Commercial Bank of China, said headline earnings per share for the six months to end-June totalled 381,9 cents, versus 351,3 cents a year earlier.
The bank said this month it expected profits to rise by 6% to 12%.
Banks in Africa’s biggest economy are mounting a slow recovery after being whiplashed by bad debts last year.
Yet analysts say it is too soon to declare a full recovery, as personal debt levels and unemployment remain high following a recession that ended last year.
The bank said in a statement it expected revenue growth to remain challenging in the second half of the year.
Standard Bank said bad debts almost halved to R3,8-billion
Net interest income, the measure of a bank’s earnings from lending, fell by 12,5%, hit by lower margins and a flat loan book.
Rival Absa Group, the South African bank majority owned by Britian’s Barclays, last week reported flat earnings, hit by slack demand for loans and said its outlook remained tough.
Nedbank, South Africa’s fourth-largest bank, has cautioned that bad debts at its money-losing retail unit are improving at a slower-than-expected rate.
Headline EPS, the main gauge of earnings in South Africa, exclude certain one-time items. Standard Bank adjusts its headline EPS to account for black ownership deals.
Shares of the bank are up 3,4% so far this year, compared with a 2,3% rise in Johannesburg’s banking index. — Reuters