Renee Bonorchis

Standard Bank, Africa’s largest lender, may pay a special dividend of as much as R7 billion after selling many of its overseas assets, according to RMB Morgan Stanley.

“Standard Bank is finally in a position to release excess capital post the major restructuring of its international business,” RMB banking analyst Greg Saffy wrote in a note to clients yesterday. The payout could be as much as R4.40 a share, he said.

The comment on a special dividend was “rather speculative”, Standard Bank spokesman Ross Linstrom said in response to questions.

The sale of the lender’s London-based global markets business by the fourth quarter would boost capital-adequacy ratios by 50 to 70 basis points, allowing the bank to consider “opportunities” for deploying capital, he said. Expanding its African business would be one focus, he said.

Mexico’s Grupo Financiero Inbursa said on Friday that it was buying Standard Bank’s Brazilian unit for about $45 million (R480m), six weeks after Standard Bank announced it would sell control of its global markets business to Industrial & Commercial Bank of China for about $765m. The bank is renewing its focus on Africa after selling more than $1.5bn of assets over the past three years.

Saffy said: “Africa now contributes about 15 percent to 20 percent of overall group earnings and is expected to grow by 20 percent to 25 percent over the next three years.” He added that Standard Bank had the highest-rated African franchise among South African lenders.

Saffy expected the company’s return on equity, a measure of profitability, to recover to 16 percent over the next three years, from 14.1 percent reported last year.

Standard Bank shares rose 3.95 percent to close at R129.20 on the JSE yesterday, paring almost all of this year’s decline. The JSE’s six-member banks index added 2.09 percent yesterday. – Bloomberg