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Standard Bank Group delivered sustainable earnings growth, improved returns, says CEO

Mar 07 2019 13:31

Standard Bank Group [JSE:SBK] delivered sustainable earnings growth and improved returns, underpinned by the strength and breadth of its client franchise, according to CEO Sim Tshabalala.

The bank released its results for the year ended 31 December 2018 on Thursday.

Headline earnings were up 6% to R27.865bn and headline earnings per share (Heps) were up 7% to R17.48.

A final dividend of R5.40 per share was declared, and a total dividend of R9.70 per share - an increase of 7% on the prior year.

Return on equity (ROE) improved to 18.0% from 17.1% in the prior year.

According to a statement issued by Standard Bank, the group's capital position remained robust, with a common equity tier 1 (CET1) ratio of 13.5%.

Non-interest revenue (NIR) continued to record strong growth, driven by retail banking. Net interest income (NII) growth was dampened, and credit impairment charges were lower, as a result of the adoption of a new accounting standard.
 
The 2018 group results were less impacted by currency movements than in prior years.

Africa Regions' contribution to banking headline earnings grew to 31% from 28% in 2017. The top five contributors to Africa Regions' headline earnings were Angola, Ghana, Mozambique, Nigeria and Uganda.

Liberty

Liberty's operating earnings were up 42% on the prior year, driven by strong performances in Individual Arrangements and STANLIB.

Liberty's headline earnings attributable to the Standard Bank Group, adjusted for the impact of deemed treasury shares, were R1.6bn, 11% higher than in the prior year.

Prospects

"Whilst not immune from global risks, prospects for sub-Saharan Africa overall are good with growth expected to accelerate from 2.9% in 2018 to 3.5% in 2019. Over a third of the countries in the region are expected to grow above 5%," commented Tshabalala.

"In South Africa, we expect an uptick in growth to 1.3% for the year, driven by a stronger second half of 2019."

He said the group is focused on transforming its customer and employee experience and improving its productivity to deliver a "future-ready" group.

"We remain committed to our medium-term targets of delivering sustainable earnings growth and an ROE in our 18% to 20% target range," he said.

"In delivering on our purpose of driving Africa's growth, we will continue to support faster, more inclusive and more sustainable growth and human development in South Africa and across the continent we are proud to call home."

By early afternoon on Thursday, Standard Bank shares were trading down 2.41% at R183.67 per share.

* Standard Bank also announced on Thursday that, as part of its commitment to gender equality, it will on International Women's Day, change the colour of its logos on the vast majority of its digital platforms from blue to magenta, the same colour as the UN Women HeForShe brand.

The bank has also set itself the goals of increasing the representation of women in executive positions to 40% by 2021 in its South African operations and by 2023 for the group as a whole.

Standard Bank also aims to enhance the representation of women on its board from 22% (2018) to 33% by 2021 while doubling the number of female chief executives in its Rest of Africa operations from 10% (2018) to 20% by 2021.

As part of Standard Bank's HeForShe commitment the group will be supporting targeted UN Women social initiatives in Nigeria, Uganda, Malawi and South Africa, focused on the economic empowerment of women by increasing productivity and access to market of women through climate smart agriculture in Africa.

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