Clients withdraw money from the ATM machines at Standard Bank Library Gardens branch, in the Johannesburg CBD.

Johannesburg – South African big four bank Standard Bank says it has managed to keep costs down in a benign credit environment.

This, it says, has resulted in low double digit earnings growth in the three months to March.

The group on Tuesday alerted shareholders to the fact that it has provided financial information to The Industrial and Commercial Bank of China, with which it has a relationship.

Standard Bank says its  earnings attributable to ordinary shareholders grew 16 percent period-on-period.

Although robust, this growth was dampened by the strength of the rand relative to other currencies, it says.

During the quarter, the headline adjustable items were negligible and as a result the group’s headline earnings growth for the period was in line with growth in earnings attributable to Standard Bank Group ordinary shareholders, it says.

The bank adds subdued credit demand in South Africa combined with tighter risk appetite across the Africa Regions translated into muted year to date growth in gross loans and advances across all categories.

Retail priced deposits were broadly flat on levels recorded at the end of December, it says.

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Its net interest margin (NIM) widened slightly in the first quarter relative to the 3.83 percent recorded in the 2016 year, assisted by positive endowment in South Africa and certain African markets most notably Nigeria, Angola and Mozambique, it says.

NIM expansion and muted loan growth supported the low single digit increase in net interest income period-on-period.

Non-interest revenue declined year-on-year off a high base in the first quarter of 2016. That quarter’s performance was buoyed by strong trading revenues on the back of exceptional market volatility and currency dislocation in certain African markets.

In the first quarter of 2017, lower volatility impacted trading revenues.

Impairment charges declined year-on-year, supported by ongoing strong performance of the mortgage book as

well as a decline in Corporate and Investment Banking provisions from a high base in the first quarter of the year, in particular in the Africa Regions. Continued focus on costs, in particular discretionary spend, delivered positive jaws and a moderate decline in the cost-to-income ratio relative to the 56.3 percent reported for the 2016 year, it says.

The group’s common equity tier 1 capital ratio remained in excess of our internal target range of 11 to 12.5 percent, it says.

In late March 2017 the group successfully executed its inaugural additional tier 1 capital issuance, raising R1.7 billion.

Standard Bank adds it remains very liquid, appropriately funded and well capitalised.

BUSINESS REPORT ONLINE