JOHANNESBURG, March 9 (Reuters) – S.Africa’s Standard Bank Group (SBKJ.J) reported a 33% rise in full year profit helped by higher interest rates and credit card, payment and insurance transactions.
Its headline earnings per share rose to 2,087.1 South African cents for the year ended Dec. 31, up from 1,573 cents a year earlier.
South African banks, amongst the biggest on the continent, had a good run last year on the back of increasing interest rates and a rebound in economic activity post COVID-19.
But with the current power supply crisis in the country, inefficient rail and port infrastructure and high unemployment, lenders are concerned about future growth.
Standard Bank, the continent’s largest lender by assets, said in 2023 it expects its net interest income – the main growth metric for banks – to be driven by renewables and infrastructure and higher interest rates, the lender said.
Its chief executive Sim Tshabalala said however there were risks this year in the form of sovereign debt defaults in Africa, a prolonged Ukraine war which could mean food shortages across the continent and a hawkish U.S. Federal Reserve.
But the bank draws confidence from its strong client base which largely has “no overdue debt,” he said.
The lender announced a dividend of 691 cents per share which equates to a final dividend payout ratio of 60%.
The company’s return on equity (RoE) – amongst the main profitability measures – was at 16.4%, up from 13.5% last year but a tad lower than pre-COVID levels.
Tshabalala declined to comment on whether 2023 RoE will be better than 2019 levels or not, but said it would reach its 2025 target of an RoE of 17% to 20% ahead of plan.
Its shares were down marginally in afternoon trade in line with the broader index (.JALSH).
Reporting by Promit Mukherjee; Editing by Himani Sarkar, Shri Navaratnam, Alexandra Hudson
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