TIDM68IG
RNS Number : 7314U
Standard Bank Group Limited
27 November 2023
Standard Bank Group Limited
27 November 2023
Voluntary trading update for the ten months to 31 October
2023
FY23 guidance
We confirm that the group's guidance for the twelve-month period
to 31 December 2023 (FY23 or the year) remains intact. In
summary:
- Banking revenue growth year on year is expected to be robust,
underpinned by strong momentum across the franchise;
- Banking cost growth is expected to remain elevated, but the
group expects to deliver strong positive jaws;
- Credit impairment charge growth is expected to moderate in the
six months to 31 December 2023 (2H23) and the group's credit loss
ratio for FY23 is expected to remain within the group's
through-the-cycle target range of 70 basis points to 100 basis
points, albeit above the mid-point; and
- Return on equity is expected to remain well anchored in the
group's 2025 target range of 17% to 20%.
10M23 update
Unless noted otherwise, the following commentary refers to the
ten months to 31 October 2023 (10M23 or the period), relative to
the ten months to 31 October 2022 (10M22).
Banking revenue growth has slowed but remained above 20% period
on period, driven by continued strong net interest income and
non-interest revenue growth.
While higher average interest rates continued to support net
interest margin, net interest margin expansion has slowed in recent
months given that the interest rate increases seen in 2H22 are now
embedded in the base. Lower demand, reduced affordability, and
competitive pricing pressure (particularly in mortgages in South
Africa), resulted in lower disbursements to retail and business
clients and a slowdown in growth in the related loan portfolios.
Corporate origination remained strong, driven by energy-related
opportunities.
Non-interest revenue growth was low-to-mid teens period on
period, supported by ongoing client acquisition, higher transaction
volumes, annual price increases, and continued volatility which
supported trading revenues.
Cost growth remained elevated but was slower than that reported
in 1H23 (1H23: 16%). The group continued to record strong positive
jaws.
Credit impairment charges growth also slowed but remained
elevated due to a combination of balance sheet growth, client
strain linked to the rapid interest rate increases, sovereign risk
migrations in Africa Regions, and provisions linked to specific
corporates in South Africa. The group's credit loss ratio for 10M23
remained below the top of the group's through-the-cycle target
range. Relative to levels as at 30 June 2023, balance sheet
provisions remain high, and coverage remains strong. Both are
deemed appropriate at this stage of the cycle. IFRS9-related
macro-economic assumptions will be reviewed as part of the year-end
reporting process.
Africa Regions continued to perform very well and delivered
strong earnings growth period on period in both reported and
constant currency. Africa Regions' contribution to group headline
earnings for 10M23 was 44%.
All other trends were as reported in the group's announcement
dated 17 October 2023.
The group will provide guidance for 2024 when it reports its
financial results for FY23 on 14 March 2024.
Investor call
Standard Bank will host an investor call at 17h00 (South Africa
time) on 27 November 2023. To register for the call please use the
link below:
Standard Bank Group Pre-close call registration
Alternatively, the call registration details are available on
the Standard Bank Group Investor Relations website -
https://reporting.standardbank.com/
A replay will be available on the Investor Relations website
shortly after the end of the call.
Shareholders are advised that the information contained in this
announcement has not been reviewed or reported on by the group's
external auditors.
The information contained in this announcement has not been
reviewed or reported on by the group's external auditors.
For further information, please contact:
Marc Hearn
Standard Bank Group Limited
9th Floor
5 Simmonds Street, Johannesburg PO Box 2001
South Africa
Telephone number: + 27 11 344 5004
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END
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