Standard Bank warned on Thursday it expects its full-year profit to drop as much as 12%, hit by lower revenue and costs from recent job cuts.
Standard Bank, Africa’s largest lender, said in a statement it expects headline earnings per share for the year to end-December to drop by 3% to 12% from the previous year.
The bank reported a normalised headline EPS of 757 cents in the year to end-December 2009. Headline EPS is the main gauge of profit in South Africa and strips out certain one-time and non-trading items.
“The pressures on banking revenues evident in the first six months of 2010 have intensified in the second half of 2010,” the bank said in a statement.
In addition, it said it would be hit by “substantial” costs related to job cuts.
Standard Bank, which is 20% owned by Industrial and Commercial Bank of China, has been bruised as demand for credit in Africa’s largest economy remains weak.
A decline in bad loans has not been enough to offset a drop in both net interest income and non-lending revenue, the two most important earnings measures for a commercial bank.
The bank said in October it would shed more than 2 000 jobs and slow its expansion drive to cut costs in the face of declining revenue. — Reuters