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Johannesburg - Despite turbulence in financial markets worldwide and cyclically higher inflation and interest rates in South Africa, the country's biggest banking group by assets, Standard Bank, posted a 10% increase in headline earnings per share to 529.2c on an IFRS basis for the six months ended June.
On a normalised basis, HEPS increased 7%to 481.8c.
The dividend per share for the half-year also increased 7% from 181c to 193c.
"Standard Bank achieved satisfactory results in the first half of 2008, reflecting the diversification and resilience of our businesses amidst continued global financial market turmoil. Our strongly capitalised group and healthy liquidity profile has put us in a position to take advantage of business opportunities that are unfolding in our chosen growth markets," the group said on Wednesday.
It added that on a normalised basis net asset value per share
increased 40% and a return on equity of 19.8% was achieved.
"Our strategy to grow businesses in other emerging markets continued to deliver value in the period. Including Liberty Life, headline earnings from South Africa grew 1%. Our businesses in the rest of Africa lifted their contribution by 55% and those outside of Africa by 11%.
"This meant that our operations outside South Africa grew headline earnings by 30% which enabled the group to achieve growth in headline earnings of 15% in very difficult trading conditions."
Strong market performance
"Our breadth of business by product line also showed results. While Personal & Business Banking was not able to grow headline earnings and Liberty Life's contribution fell 46%, Corporate & Investment Banking grew headline earnings by a commendable 20%.
"Liberty Life's earnings are strongly correlated to South African investment market performance and the first half of 2008 saw markets significantly underperform. This compares to the strong market performance in the first half of 2007," Standard Bank said.
The group reported a 40% growth in net interest income, while non-interest revenue grew 25%.
The group improved the cost-to-income ratio to 48.7% from 51.7% for the previous comparative period.
Gross loans and advances increased by 25% from June 2007 with a marked slowdown in new business in personal banking.
Looking ahead, Standard Bank said that while the current environment presents challenging trading conditions, its capital position and growing franchise remain healthy and it will maintain its focus on risk mitigation and cost-saving strategies to protect and grow shareholder wealth.
"We continually identify and pursue growth opportunities in
our chosen markets to enhance the group's long-term growth prospects," it added.
- I-Net Bridge