Standard Bank CEO explains the drivers behind record half-year earnings
Africa's biggest lender by assets Standard Bank reported record earnings for the six month reporting period. Improvements were backed by a strong rebound in post-pandemic banking activities. Headline earnings per share were up almost 40 per cent and the bank's Africa Regions’ franchise grew revenue by 26 per cent. CNBC Africa’s Godfrey Mutizwa spoke to Sim Tshabalala, Group CEO, Standard Bank. He asked why the groups performance was this exceptional, for more.
Fri, 19 Aug 2022 15:45:28 GMT
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AI Generated Summary
- The significant increase in headline earnings per share and revenue growth in the Africa Regions franchise underscore the success of Standard Bank's strategic focus on client expansion and digital product promotion.
- The company's resilient risk management practices, judicious cost control measures, and effective lending strategies were instrumental in driving the exceptional financial results.
- Standard Bank's commitment to regulatory compliance, stability, and sustainable energy initiatives reflects its strategic positioning in navigating challenging market conditions and promoting long-term growth.
Standard Bank, Africa's largest lender by assets, has reported record earnings for the six-month reporting period, driven by a strong rebound in post-pandemic banking activities. Headline earnings per share saw a significant increase of nearly 40 percent, and the bank's Africa Regions franchise experienced a 26 percent growth in revenue. Group CEO at Standard Bank, Sim Tshabalala, attributes the exceptional performance to the execution of a well-established strategy. Tshabalala highlighted the focus on expanding the client base, promoting digital products, and providing unwavering support to clients during the pandemic. This approach led to an increase in loans, a flight to quality, and a growth in the asset base. As the economy recovered from the effects of COVID-19, transaction activities surged, resulting in improved non-interest revenues. Additionally, the bank's effective risk management practices and judicious cost control measures played a crucial role in driving the impressive financial results. Tshabalala emphasized the importance of maintaining consistent strategies and operational excellence across the organization to achieve such outstanding outcomes. The CEO also discussed the company's performance in various regions across Africa, with revenue and earnings showing significant growth percentages in East, South, Central, and West Africa. Tshabalala believes that the success Standard Bank achieved in this reporting period was a result of pulling all necessary levers and implementing sound financial strategies. Looking ahead, Tshabalala addressed the challenges posed by rising interest rates and inflation, particularly in the African market. He expressed confidence in the bank's ability to navigate these conditions while maintaining a credit loss ratio within the targeted range. Moreover, the integration of Liberty, a subsidiary of Standard Bank, contributed positively to the overall performance, with significant growth in revenue and profitability. Tshabalala also discussed the bank's involvement in renewable energy projects and its commitment to supporting sustainable energy initiatives in Africa. Addressing concerns about South Africa's inclusion in the gray list, Tshabalala stressed the importance of compliance and regulatory adherence to avoid adverse impacts on the economy. He underscored the need for swift legislative actions and stringent enforcement to safeguard against potential challenges associated with gray listing. Tshabalala emphasized the essential role of stability and regulatory compliance in ensuring South Africa remains an attractive investment destination. When questioned about potential implications of allegations against the finance minister, Tshabalala maintained that the country operates based on laws and regulations, emphasizing the importance of upholding legal standards and allowing due process to unfold.