Standard Bank has delivered record earnings in the first half of 2022. The bank published its half-year financial statements on Friday, reporting a 33% jump in its headline earnings to R15.3 billion in the six months to 30 June.
The bank said its revenue growth exceeded its internal expectations. A larger client base with increased transactional activity, strong trading performance and growth in Standard Bank's lending book saw the bank's non-interest revenue grow by 13% and net interest income rise by 15%. The bank's overall revenue went up by 14%.
Standard Bank's activities grew headline earnings by 25%, contributing R13.6 to the group. Liberty added R253 million, and ICBCS contributed R1.4 billion.
"The pandemic hit Africa's economies and businesses hard, and Standard Bank's operations were no exception. We started to clear signs of recovery last year, and that recovery has accelerated significantly over the first half of 2022," said Standard Bank Group CEO Sim Tshabalala.
He said that after the group's headline earnings reached record levels, Standard Bank's return on equity (ROE) has returned to levels above the cost of its equity. The banking group's ROE increased to 15.3%, coming much closer to the bank's 2025 target range of between 17% and 20%. A year ago, it sat at just 12.9%.
A growing customer base and lending book
The group's banking operations continued on the 2021 growth momentum, increasing client numbers and balances. The group's retail banking franchise, Consumer & High Net Worth clients (CHNW), grew its customer base by 8% in SA and 9% in the rest of Africa, taking its total client base to 16.22 million. The increased activity in that business unit saw its revenue grow by 9% and its headline earnings jump 28% to R3.4 billion.
The Business & Commercial clients franchise grew its customer base by 4%. Its revenues grew by 17%, and headline earnings shot up 59% to R3.3 billion. But the Corporate & Investment Banking (CIB) franchise contributed the most to banking operations' headline earnings at R7.4 billion, a 16% increase from June 2021.
Standard Bank also got a handsome share of customers' deposits – 10% in SA and 20% in Africa Regions. The group recorded a 13% increase in its total deposits, supported by growth in current and savings accounts as well as term deposits.
"Transactional and account activity recovered to well above pre-pandemic levels," wrote Standard Bank in the results announcement.
The bank said as lockdown restrictions eased further in 2022, transactional activity spiked, resulting in a 10% growth in its net fee and commission revenue. These fees were also boosted by the annual price increases.
On the lending front, the bank grew gross loans, and advances to customers grew by 11% to R1.3 trillion. Vehicle and asset finance recorded double-digit growth while home loans and personal unsecured loans also recorded growth.
The bank grew its loan book more aggressively in AfricarRegions, where gross loans to customers grew by 29%.
"[This] is reflective of our risk appetite and strategy to grow, combined with an increase in disbursements through our digital lending solutions," Standard Bank said.
The Standard Bank board approved an interim dividend of R5.15 per share, which equates to a dividend payout ratio of 55% for the current period.