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Feb 10 2012 18:19
The rand tumbled against the dollar in late afternoon trade as the local currency tracked a jittery euro.
Feb 10 2012 17:28
President Jacob Zuma will make an announcement "of national importance" on Saturday, says a central bank statement.
Feb 10 2012 16:39
Stock markets fell after Greece's crucial international bailout was put on hold by its partners in the 17-nation eurozone.
Johannesburg - Standard Bank would offset the effects of lower-than-expected economic growth rate in South Africa with profits from its offshore businesses in Nigeria and China.
Government has targeted growth of 6% in gross domestic product, a goal damaged by power shortages and inflation. Interest rates have subsequently been hiked which is starting to show in consumer spending.
"We simply did not anticipate the velocity of change and the speed and magnitude of the deterioration of customer disposable income," said Peter Wharton-Hood, CEO of the bank's personal and business banking.
Wharton-Hood was speaking at the presentation of the Standard Bank interim results on Wednesday in Johannesburg in which it posted headline share earnings of 481.8c, a 7% increase year-on-year.
Jacko Maree, CEO of Standard Bank Group, said its diversification strategy had paid off "quite well" and the group was seeing the benefits of establishing businesses in Argentina, Nigeria and China.
"The non-South African businesses are performing better than the South African businesses," he said.
Following the sale of a stake to Chinese bank, ICBC, Standard had begun to establish a presence in the Chinese market. It had already secured around 80 major Chinese clients. "The strategy (of diversification) is showing value," said Maree.
The performance of Standard's investment banking and foreign operations had offset a weaker showing from its retail operations in South Africa as well as in its investment in Liberty Life, held through its 60% stake in Liberty Holdings.
As was the case with South African rivals, Nedbank and Absa, Standard Bank's investment banking division performed well in the first half of its financial year helping to grow group headline earnings a fifth.
Ben Kruger, CEO of investment banking, said Standard Bank had a full-year $100m profit target. About $74m had been generated at the halfway mark. "Nigeria is an exciting country with great prospects," he said.
Tough second half
One worrying sign for Standard Bank was the increasing problems the company was facing in its card division. The credit loss ratio in card debtors increased from 6.34% to 9.44% indicating that the consumer was becoming increasingly stretched.
The credit loss ratio is the percentage of credit issued by the bank that had been written off.
New business associated with asset financing activities had also slowed with new vehicle loans down a third while home loans were 28% lower compared to the corresponding period in the previous year.
Standard Bank closed less than 1% lower at R90 per share on the JSE which was roughly in line with the financial index.
- Fin24.com