Standard Bank interim results 2024 are anything but standard

The market and at least one analyst have reacted favourably to Standard Bank’s interim results for 2024, released on Thursday. The bank’s share price climbed just over 6% intraday to close at R232.82 yesterday, locking in a 15% gain over the last three months.

Headline earnings climbed 4% to R22-billion, while the interim dividend was up 8% at R7.44 a share. 

Group chief executive Sim Tshabalala said the favourable performance was underpinned by continued franchise growth in the banking businesses and robust earnings growth in the insurance and asset management business. 

“The South African franchise delivered double-digit earnings growth supported by improving credit trends,” he said.

Commenting on the results, Old Mutual Wealth Private Client Securities research analyst, Tasneem Samodien, noted that repayment behaviour had improved with customers actively trying to protect their credit records, and consequent inflows into early arrears had slowed. 

Provisions for credit impairment increased by 8%. The credit loss ratio improved by 17bps to 92bps, within management’s through-the-cycle target range of 70bps to 100bps.

“Despite a tough economic environment with macro challenges across Africa, we expect Standard Bank to continue growing earnings over the medium term,” said Samodien.

“This will be supported by strong operational momentum in both the consumer and high net worth client, corporate and investment banking divisions. Combine this with growing momentum in Africa, where 40% of profits are derived, and you have further impetus for growth. When we eventually see an improvement in the local environment, financial services companies like Standard Bank are likely to outperform,” she said.

Samodien also pointed out that the bank’s operating expenses were exceptionally well managed, rising by only 1% to R38.4-billion.

“The biggest component of expenses was staff costs, which rose 2% as lower performance incentives partially offset annual salary and skilled headcount increases. As a result, the cost-to-income ratio improved to 49.7%, below management’s targeted 50%.”

The 7% increase in digitally active retail clients in South Africa was clearly reflected in the 25% increase in digital transaction volumes for the period (excluding Nigeria) and a 12% drop in branch transactional volumes.

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