STANDARD Bank took an R854 million hit from its exposure to suspected metal financing fraud in China, wiping out first-half earnings growth.
Standard Bank, one of several lenders ensnared by the scandal at Qingdao port, said yesterday it was unclear if further write-downs would be needed.
Chinese authorities launched an investigation in May into whether metals trading firm Decheng Mining and related companies used fake warehouse receipts at Qingdao port to obtain multiple loans secured against a single cargo of metal.
“This is an unfortunate event and something we weren’t bargaining on,” co-chief executive Ben Kruger said.
He said the bank would have achieved a 12 percent increase in first-half headline earnings a share without the write-down.
First-half diluted headline earnings a share rose 0.6 percent to R5.077. The bank took an R854m “valuation adjustment” against financing agreements related to aluminium held in warehouses in China. On the risk of a further impact, Kruger said: “It’s too early, we have no information, really. We are not allowed into the ports.”
The shares fell 3.43 percent to R140.85 yesterday. – Reuters