Johannesburg - Standard Bank shares responded positively to its half-year results on the JSE yesterday, gaining more than 7 percent in early trade to R151.06 per share, boosted by higher interest rates in South Africa and a fees increase in the rest of the continent.
The bank reported a 5 percent rise in headline earnings to R10.86 billion for the six months to June, from R10.37bn. As a result the group managed to declare an interim dividend of 340c per share, 12 percent higher than the same reporting period last year. Net interest income rose 18.8 percent to R27.8bn, from R23.4bn last year.
Joint chief executive Sim Tshabalala said: “We continue to monitor developments in the banking sector and financial markets to ensure that we remain appropriately equipped to deliver on our vision to be the leading financial services organisation in, for and across Africa.
“We are committed to delivering through-the-cycle earnings growth and a return on earnings within our target range of 15 percent to 18 percent over the medium term.”
Total income
The rest of Africa contributed 31 percent to the group’s total income, relative to 29 percent in the prior period and 25 percent to the group’s headline earnings, and this was consistent with the prior period.
The bank’s unit of Personal and Business Banking reported headline earnings up 14 percent to R5.50bn, while Corporate and Investment Banking’s headline earnings grew 13 percent to R4.99bn.
However, Liberty’s black economic empowerment normalised headline earnings decreased by 9 percent to R1.82bn of which the International Financial Reporting Standards heading earnings attributable to the group was R886 million.
Cannon Asset Managers’ chief investment officer, Andrew Dittberner, described the results as ahead of moderated market expectations as a result of the economic situation.
Dittberner said: “What was very pleasing from our perspective was the 12 percent increase in dividends paid out. The rising interest rate environment helped boost net interest income by 18 percent, but the flip side to this is that the credit loss ratio ticked up marginally.
“The return on equity of 14.4 percent was a little disappointing and it would be welcomed to see this number get closer to 16 percent in the near term.”
Mergence Investment manager’s Brad Preston said the results were broadly in line but slightly ahead of market expectations. Preston said the banking operations in the country and the rest of Africa helped to push the results.
Standard Bank shares rose 7.28 percent on the JSE yesterday to close at R153.
BUSINESS REPORT