Standard Bank : 1st Half Net Profit Fell as Pandemic Hit; Warns of 2nd Half Challenges

By Adria Calatayud

Standard Bank Group Ltd. said Thursday that net profit for the first half fell sharply as credit-impairment charges soared due to the coronavirus pandemic, and warned that it will continue to face challenges in the second half.

Net profit for the first six months of the year was 3.77 billion South African rand ($218.3 million) compared with ZAR13.20 billion for the year-earlier period, the South African bank said.

Headline earnings were down 44% at ZAR7.54 billion, the lender said.

Total income for the first half fell to ZAR61.52 billion from ZAR66.06 billion a year earlier, with net interest income broadly flat at ZAR31.20 billion, Standard Bank said.

Common equity Tier 1 ratio---a key measure of balance-sheet strength--at June 30 was 12.6%, down from 14.0% a year earlier, the lender said.

The bank said continuing uncertainty is expected to constrain balance-sheet growth. Lower interest rates are anticipated to persist throughout the second half, which will put pressure on net interest income, and trading revenue is expected to be below first-half levels, it said.

Standard Bank said it is unable to provide revised medium-term targets at this time.

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