Standard Bank profit drops on weak demand

Standard Bank, Africa’s biggest bank, reported its third straight decline in annual profit on slack demand for loans and said it would continue to keep a lid on costs.

Standard Bank is struggling to rein in expenses after an aggressive expansion push to become a top emerging-markets lender. The bank said on Thursday it would scale back its ambitions and no longer had plans to buy or build any more businesses in markets beyond Africa.

The bank, which is 20% owned by the Industrial and Commercial Bank of China, said last year it would cut more than 2 000 jobs, a move analysts said was long overdue after the years of rapid expansion.

Media have speculated the Johannesburg-based bank will eventually sell its 36% stake in Russian bank Troika Dialog to rein in costs. Standard has been silent on the Russian stake.

Other South African banks may eventually need to shift out of growth mode and begin to cut costs as Standard has, said Reuben Beelders, a portfolio manager at Gryphon Asset Management in Cape Town.

“On a relative basis, I’m less concerned about Standard Bank than a lot of people are. I think a lot of the bad news is in the price already.”

Shares of the lender, which have been the worst performer on Johannesburg’s bank index this year, were down 0,4% at 7.31am GMT, slightly underperforming the banking index. — Reuters

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