Business Loans Push Up Profits For Standard Bank
Africa’s biggest lender by assets, Standard Bank, said on Friday that half-year profit rose by 27 percent, boosted by demand for loans from businesses.
Standard Bank, in which Industrial and Commercial Bank of China owns about 20 percent, said headline earnings per share totaled 651 cents in the six months to the end of June, up 27 percent from 513 cents a year earlier.
Headline earnings per share, South Africa’s widely watched profit measure, strips out certain one-off items.
Net interest income, a closely watched measure of how much banks make from their loans, grew 8 percent to 23.4 billion rand ($1.8 billion), helped by lower-margin but safer loans to corporate clients.
Lending to companies is increasingly becoming the mainstay for banks in Africa’s most advanced economy as very high personal debt levels prompt them to pull back from high margin but risky unsecured credit, which relies solely on a customer’s promise to pay it back.
However, an electricity crisis at home and the impact of weaker commodity prices in nearby sub-Saharan African countries could temper business and investment in the region and curb corporate credit growth.
Read more at Reuters.