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.
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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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