Standard Bank sees H1 HEPS down 43% in tough market conditions
As we know, banks have been operating in a very uncertain and difficult environment. Adding pressure to the sector have been consumer financial constraints and cuts on interest rates. Standard Bank has reported a 43 per cent fall in headline earnings per share in the interim. However, the bank has left the door open for a final dividend. Standard Bank South Africa CEO, Sim Tshabalala joins CNBC Africa for more.
Thu, 20 Aug 2020 15:52:28 GMT
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AI Generated Summary
- Standard Bank reports a 43% decline in headline earnings per share, reflecting tough market conditions and the impact of the COVID-19 pandemic on the banking sector.
- The bank reassures clients about data security measures following a data breach at Experian and highlights significant investments in IT security and collaboration with law enforcement agencies.
- Standard Bank discusses efforts to support clients through payment relief measures and participation in the loan guarantee scheme, while acknowledging lower uptake of loans due to factors like low demand and cautious business investment.
Standard Bank, one of the largest financial institutions in South Africa, is navigating through challenging times as the global economy grapples with the effects of the COVID-19 pandemic. The bank has reported a 43% decline in headline earnings per share in the interim, reflecting the tough market conditions that have put pressure on the banking sector. CNBC Africa recently sat down with Standard Bank South Africa CEO, Sim Tshabalala, to discuss the bank's performance and outlook in light of the current economic climate.
The interview covered various topics, including the recent data breach at Experian, the bank's financial results, loan relief measures, and the impact of global geopolitical events on the banking industry.
Tshabalala started by addressing the Experian data breach, expressing empathy for those affected and assuring clients that the bank is taking necessary steps to protect their data. He highlighted the bank's substantial investment in IT security and collaboration with law enforcement agencies to address the breach and safeguard client information.
When questioned about the bank's earnings and the potential impact of the ongoing pandemic on its financial performance, Tshabalala emphasized the unprecedented nature of the current situation. He acknowledged that the economic uncertainty could lead to further challenges, including a second wave of infections and increased financial strain on clients. While the bank's earnings had declined, Tshabalala pointed out positive aspects of the financial results, such as stable net interest income and pre-provision profits.
The discussion also touched on the bank's efforts to support clients facing financial difficulties, including offering payment holidays and participating in the loan guarantee scheme. Tshabalala revealed that a significant number of clients had taken advantage of payment relief measures, and the bank had provided billions in loans to businesses through the scheme. However, he noted that the uptake of the loans was lower than expected, citing factors like low demand and cautious business investment.
In response to a question about the impact of global events, such as the national security law in Hong Kong, on the banking industry, Tshabalala emphasized the importance of adhering to laws and regulations while maintaining a long-term perspective on globalization. He acknowledged the challenges posed by geopolitical tensions but expressed confidence in the bank's ability to navigate through uncertain times by staying compliant and focused on serving its clients.
Overall, the interview highlighted the complexities and uncertainties facing Standard Bank in the current economic environment. Despite the challenges, Tshabalala's reassurance about the bank's commitment to client security and financial stability underscores the institution's resilience in turbulent times.