S.Africa’s Standard Bank expects 40% rise in first half profits

PUBLISHED: Mon, 31 May 2021 07:06:10 GMT

JOHANNESBURG, May 31 (Reuters) – South Africa’s Standard Bank Group said it expects to report a 40% rise in profit for the six months to June 30, boosted by signs of recovery in the local economy.

Headline earnings per share — the main gauge of corporate profit in South Africa – will be around 663 cents, up from 473.8 cents in the January to June 2020 period, the bank said on Monday.

The coronavirus crisis bruised South African banks last year as the overall economic outlook darkened, with lenders setting aside large provisions for expected impairments as companies requested moratoriums on their loans.

Although the country’s lenders are considered well-capitalised with strong balance sheets, they also paused dividend payments to conserve cash.

However, economic prospects have improved with a vaccination rollout and falling numbers of COVID-19 cases, with analysts predicting sectors that are dependent on the local economy, such as banking, retail and insurance, to deliver strong numbers in coming quarters.

In the four-month period to April 30, mortgage and vehicle and asset finance disbursements in South Africa were well above the same period last year, with business disbursements growing in double digits, Standard Bank said.

In Africa regions, personal loan volumes also rose during the period, the continent’s largest lender by assets said.

“The group expects to be in a position to declare an interim dividend in August 2021,” Standard bank said, adding the payout in the current year would be above last year’s levels but below historic levels of 45%-55%.

Standard Bank is due to report first half results on August 19. (Reporting by Promit Mukherjee; Editing by Kirsten Donovan)

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