Financial results

Standard Bank reports strong results for the year ended 31 December 2017

Results at a glance

  • Headline earnings: R26 270 million, up 14%
  • Headline earnings per share (HEPS): 1 640 cents, up 14%
  • Dividend per share: 910 cents, up 17%
  • Common equity tier (CET) 1 ratio: 13.5% (FY16: 13.9%)
  • Net asset value (NAV) per share: 9 830 cents up 4%
  • Return on equity (ROE): Improved from 15.3% to 17.1%
  • Cost-to-income ratio: Declined from 56.3% to 55.7%
  • Credit loss ratio: 86bps (FY16: 86bps)

Group results overview

Standard Bank Group’s financial performance for the year ended 31 December 2017 was strong. The group delivered 14% growth in headline earnings to R26.3 billion and ROE improved to 17.1% from 15.3% in 2016. The group’s capital position remained robust, with a CET1 ratio of 13.5%. Group headline earnings growth was boosted by an improved contribution from ICBC Standard Bank Plc (ICBCS) and Liberty.

“We stand ready to serve our customers with consistent excellence, wherever they are and whatever financial services they require, online or in-person,” says Sim Tshabalala, Standard Bank Group CE.

View our full year-end results

Operating environment

Global macroeconomic conditions were positive during 2017, supporting increased trade volumes and underpinning global growth of 3.7% for the year. Economic growth in sub-Saharan Africa rebounded from 1.4% in 2016 to 2.7% in 2017, underpinned by improving commodity prices and trade. Across many of Standard Bank’s key countries inflation began to ease, stemming interest rate hikes and, in certain countries, providing scope for rate cuts in the second half of the year. Although exchange rates largely stabilised in the second half, many were weaker year on year against the strengthening Rand.

The recovery in the West Africa region was supported by higher oil prices and production volumes, together with higher business and consumer confidence levels. East Africa started to emerge from the drought. The South & Central Africa region was supported by improved commodity prices, but countries immediately surrounding South Africa continued to feel the effects of low South African demand.

Business unit results for Corporate & Investment Banking

CIB’s headline earnings of R11.5 billion were up 11% on the prior year, and 17% on a constant currency basis. Continued cost discipline and improvements in productivity and efficiency metrics resulted in positive jaws of 4.6%. Higher headline earnings, together with disciplined capital utilisation, delivered an ROE of 22.2%, an improvement from 19.5% in 2016.

Transactional Products and Services (TPS) was the outstanding performer, with headline earnings up 32%. TPS plays a core role across the wider CIB franchise, being critical to the wholesale client franchise across the African continent. Revenues grew by 18%, with NII well ahead of the prior year.

Global Markets delivered a resilient performance, growing headline earnings by 13% to R4.6 billion.

Investment Banking revenues were up 6%, reflecting fees earned on a number of landmark transactions and client activity in both debt and equity capital markets.

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