Standard Bank Group expects June earnings to decline by more than 20%
DURBAN - The Standard Bank Group today warned the market that it expects its earnings for the six months to end June to decline by more than 20 percent and is expecting to withhold paying an interim dividend as the Covid-19 pandemic continues to cause havoc in global markets.
The bank expects its headline earnings per share (Heps) and earnings per share (Eps) for the first half of the year to be more than 20 percent lower than the reported Heps of 837.4 cents a share and Eps of 827c reported last year.
However, the group said a high degree of uncertainty remains regarding the impact that the Covid-19 pandemic and the associated governmental responses will have on the economies in the markets in which the group operates, and in turn, on the group.
While we remain unable to provide guidance with regards to thegroup’s performance for the year to end December 2020, we wish to provide some high-level commentary on the factors influencing the financial year 2020 outlook. We will issue a further trading statement with more specific guidance ranges once there is reasonable certainty regarding the extent of the decline relative to the comparable period,” the group said.
Last week, Standard Bank’s industry peer, Absa Group also released a trading statement in which it also expected its earnings to decline by more than 20 percent during the period.
Standard Bank said its current scenario analysis indicates that the group’s credit loss ratio for financial year 2020 will be above the group’s through-the-cycle range of 70 basis points (bps) to 100 bps and may exceed the peak recorded in the global financial crisis of 160 bps.
By the end of March, the group’s common equity tier one ratio was 12.9 percent and liquidity coverage ratio was 141.9 percent. The group is well capitalised and liquid at the end of April.
“Based on our scenario analysis, the group’s capital ratios are expected to remain strong and above required minimums. In line with the Prudential Authority’s guidance on dividends, the group is not planning to declare an interim ordinary dividend,” the group said.
The share price was down by 2.18 percent in the morning to R99.39 a share.
BUSINESS REPORT ONLINE