Standard Bank Group, Africa’s largest lender, reported first-half profit that missed analyst estimates as bad debts climbed.
Net income rose to R8.07 billion from R7.1-billion a year earlier, the bank said in a statement. Earnings per share excluding some items rose 10% to R5.06, missing the R5.22 median estimate of four analysts in a Bloomberg survey. The lender’s loss on bad debts climbed 29% to R4.36-billion.
Standard Bank appointed Sim Tshabalala and Ben Kruger as joint chief executive officers in March after Jacko Maree stepped down after 13 years. The bank is seeking to attract more low-income earners in South Africa while trying to boost returns at its operations in 17 other African nations.
“South African households continue to struggle with high overall debt burdens, coupled with sluggish income growth and rising inflation,” the lender said in the statement.
Standard Bank is the second-worst performing stock on the six-member FTSE/JSE Africa Banks Index this year after Barclays Africa Group, having dropped 3.3% compared with the average decline of 3.1%. The stock fell 1% to R114.6 in early morning trading. Standard Bank said the first half dividend increased 10% to R2.33
South Africa’s gross domestic product expanded 0.9% in the first quarter, the slowest pace since a 2009 recession, while unemployment climbed to 25.2%, up from 24.9% in the previous three months. The price of gasoline in the country has gained about 22% from July last year.
"Cost pressures will continue in the second half of the year given the weaker rand,” Standard Bank said in the statement, referring to a 15% decline in the South African currency against the dollar this year. “We remain confident in our ability to grow revenues." – Bloomberg