By
(Bloomberg) — Standard Bank, Africa’s largest lender by assets, said first-half profit dropped 18 percent compared with a year earlier when it sold a stake in its U.K. business.
Net income declined to 10.8 billion rand ($814 billion) from 13.2 billion rand a year earlier, the Johannesburg-based lender said in a statement on Thursday. Earnings per share excluding one-time items advanced 5 percent to 6.80 rand, while the bank increased its dividend 12 percent to 3.40 rand a share.
In South Africa, where Standard Bank started operations more than 150 years ago, the economy is forecast not to grow at all this year even with inflation above the central bank’s target range and interest rates at their highest level in six years. This has put pressure on consumers and is starting to impact banks’ profit growth. Outside of South Africa Standard Bank has a presence in 19 countries on the continent, many of which are expanding faster than its home market.
“We are cognizant of the constraints under which our customers are currently operating,” the lender said. “Despite increasing our credit provisions to reflect this, the group remains well capitalized and in a position to continue to invest and grow. We are committed to delivering through-the-cycle earnings growth and return on equity within our target range of 15 percent to 18 percent over the medium term.”
Standard Bank in the first half of 2015 included 2.8 billion rand of non-recurring gains in its net income line mainly related to the sale of a stake in its U.K. business, which were not repeated in 2016, the company said.
