Granted, the similarity to Absa’s results began and ended with the bigger contribution of greater African operations to the bottom line. Absa’s local headline earnings declined 17%, on the back of 60% higher credit impairments.

Standard Bank’s South African operations, on the other hand,  were not far behind the rest of Africa, with a 40% contribution to group headline earnings of R21.2-billion. Banking headline earnings were up 42% to R18.7-billion.  

Group chief executive Sim Tshabalala noted the various tailwinds over the six months to the end of June, including an increasing interest rate cycle, rising inflation, and heightened activity from foreign exchange markets. The economic environment was exacerbated by continued slow reforms, poor service delivery, and increased electricity and logistics disruptions. Inflation remained outside the South African Reserve Bank’s (SARB) target range of 3% to 6% for most of the period, resulting in a further increase in the repo rate of 125 basis points to end the period at 8.25%. Interest rates have increased by 450 basis points since the start of 2022, placing considerable pressure on consumers and businesses, the bank noted in its financial results statement.

Organic growth

Tshabalala attributed the positive results in South African operations largely to an increasing number of clients “doing more” with Standard Bank. Personal and private banking clients increased 9% to 15.4-million; business and commercial banking clients were up 5% to 819,000; and new business value in the insurance and asset management segment shot up 32% to more than R1.4-billion, with more than R1.4-trillion assets under management.

On the sustainable finance side, Standard Bank disbursed more than R450-million to individuals to install solar solutions or purchase green-aligned homes. These are homes that are designed and built in a manner that intentionally use solutions that create less negative/ favourable impact on the environment and make use of building, energy or water efficient technologies.

Lungisa Fuzile, chief executive of Standard Bank South Africa, points out that during the difficult years, “some of the competitor banks “put (their) foot on the brake, I would say in some instances quite strongly during that time. In our case, we remained open for business and that cemented our relationship with a number of (home) loan originators, who had difficulty finding banks to whom to pass the applications.”

He adds that during the Covid years, Standard Bank South Africa’s run rates (the financial performance of a company based on using current financial information as a predictor of future performance) in home loans went up considerably.

“The normal run rate was about R3.5-billion. In good months, we were in excess of R5-billion a month and in some instances, just tipping R6-billion. Having said that, we were not reckless; we were careful about who we lent to,” he told journalists at a briefing yesterday. A far cry from Nedbank, which posted a 57% increase in impairment charges, particularly in the retail consumer banking segment, in its interim results statements just more than a week ago.

IT issues largely resolved

Margaret Nienaber, Standard Bank Group’s chief operating officer, noted that the bank had made significant progress in reducing any systems downtime, following the fiasco of the first half of last year when it saw 1,062 hours of downtime – including one notable downtime period over a public holiday weekend, that left thousands of customers fuming.

Since then, management has made steady progress in this regard, reducing the downtime hours to 949 in the second half of 2022 and even further to 350 hours in the first half of this year. The company’s share price inched down 1.91% to close at R191.69 yesterday. DM