Johannesburg - Standard Bank’s sale of a majority stake in its London-based global markets business to the Industrial and Commercial Bank of China (ICBC) in February boosted headline earnings by 27 percent to R10.5 billion for the six months to June, enabling it to focus on expansion in the rest of Africa.
Africa’s biggest lender by assets raised final cash proceeds of $675 million (about R8.1 billion) from the sale.
The group said first-half profit had increased 61 percent after it sold part of its London unit, as well as its Brazilian operations.
Net income climbed to R13.2bn from R8.24bn a year earlier, the lender said on Friday. Earnings per share excluding one-time items advanced 27 percent to R6.51, while the bank increased its dividend 17 percent to R3.03 a share. Operating expenses climbed 11 percent.
“The underlying banking operations are solid and the big positive is the dividend up 17 percent and it seems the tier 1 capital situation is solid now,” Patrice Rassou, the head of equities at Sanlam Investment Management, said.
“Cost growth looks quite hefty”, and the revenue increase seemed weaker than that of peers Nedbank and Barclays Africa Group, he said.
Standard Bank completed the sales of its London-based global markets business to the lender’s 20 percent shareholder, the ICBC, and sold its entire interest in Brazil’s Banco Standard de Investimentos during the six months.
The lender also benefited from an insurance claim on missing aluminium stockpiles in China.
Standard Bank slipped by 0.48 percent to close at R153.95 on the JSE on Friday.
Nigerian operations
But Nigeria stuck out like a sore thumb. Joint chief executive Ben Kruger said while client growth had increased and contributed 92 percent to profits for African business, removing Nigeria Bank would have improved headline earnings by 78 percent in cost and currency terms.
“We would expect Nigeria to remain in difficult territory for the second half of this year… We think growth will be down to 4.3 percent for the year, but expect next year to be normalised,” he said
* Additional reporting by Bloomberg
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