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Johannesburg - The rapid deterioration of the global economy made it impossible to call future prospects until October, said Standard Bank, South Africa's largest bank by value of assets.
Commenting in the group's interim results ended June, CEO Jacko Maree said: "The global economy has experienced a period of rapid deterioration and the outlook remains uncertain."
As a result, Standard Bank said it would only provide an updated trading statement toward the end of October when the economic picture became clearer.
Standard Bank, which has a market value of R139bn, is the third of the big four banks to report financial results following Nedbank and Absa which both reported last week.
Standard Bank posted headline share earnings of 481.8c, representing a 7% increase over the results in the corresponding period last year. Standard Bank declared an interim dividend of 193 cents per share (cps), up 7% on the 2007 interim distribution of 181cps.
Standard Bank said its financial performance was affected by growing pressure on consumers.
In line with trends
Reduced disposable income, a weaker residential property market, and low recovery values of vehicles were compounding the strain on households' ability to service debt, it said. This was likely to increase defaulting in South Africa, it added.
In line with the trends reported by Nedbank and Absa, Standard Bank also reported a 20% increase in corporate and investment banking activities while personal banking and vehicle and asset finance had slowed.
Net income from banking activities rose 33%, while net income from interest rose 41%.
With its performance closely linked to equity markets in South Africa, income from Liberty Life fell 46%.
It confirmed R4.3bn of capital raised from the recent sale of a stake in the bank to the Industrial and Commercial Bank of China Limited (ICBC) has been used to buy minority interests in Liberty Holdings during July.
This was part of a restructuring that is expected to boost earnings for both Standard Bank and Liberty Group.
- Fin24.com will be updating this story with management and analyst commentary.
- Fin24.com