Credit environment benign - Standard Bank

Clients withdraw money from the ATM machines at Standard Bank Library Gardens branch, in the Johannesburg CBD.

Clients withdraw money from the ATM machines at Standard Bank Library Gardens branch, in the Johannesburg CBD.

Published Apr 25, 2017

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Johannesburg – South African big four bank Standard Bank

says it has managed to keep costs down in a benign credit environment.

This, it says, has resulted in low double digit earnings

growth in the three months to March.

The group on Tuesday alerted shareholders to the fact

that it has provided financial information to The Industrial and Commercial

Bank of China, with which it has a relationship.

Standard Bank says its  earnings attributable to ordinary shareholders

grew 16 percent period-on-period.

Although robust, this growth was dampened by the strength

of the rand relative to other currencies, it says.

During the quarter, the headline adjustable items were

negligible and as a result the group’s headline earnings growth for the period

was in line with growth in earnings attributable to Standard Bank Group

ordinary shareholders, it says.

The bank adds subdued credit demand in South Africa

combined with tighter risk appetite across the Africa Regions translated into

muted year to date growth in gross loans and advances across all categories.

Retail priced deposits were broadly flat on levels

recorded at the end of December, it says.

Read also:  Standard Bank executives get paid R209m

Its net interest margin (NIM) widened slightly in the

first quarter relative to the 3.83 percent recorded in the 2016 year, assisted

by positive endowment in South Africa and certain African markets most notably

Nigeria, Angola and Mozambique, it says.

NIM expansion and muted loan growth supported

the low single digit increase in net interest income period-on-period.

Non-interest revenue declined year-on-year off a high

base in the first quarter of 2016. That quarter’s performance was buoyed by

strong trading revenues on the back of exceptional market volatility and

currency dislocation in certain African markets.

In the first quarter of 2017, lower volatility impacted

trading revenues.

Impairment charges declined year-on-year, supported by

ongoing strong performance of the mortgage book as

well as a decline in Corporate and Investment Banking

provisions from a high base in the first quarter of the year, in particular in

the Africa Regions. Continued focus on costs, in particular discretionary

spend, delivered positive jaws and a moderate decline in the cost-to-income ratio

relative to the 56.3 percent reported for the 2016 year, it says.

The group’s common equity tier 1 capital ratio remained

in excess of our internal target range of 11 to 12.5 percent, it says.

In late March 2017 the group successfully executed its

inaugural additional tier 1 capital issuance, raising R1.7 billion.

Standard Bank adds it remains very liquid, appropriately

funded and well capitalised.

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