Standard Bank Group (SBK) H1 2024 earnings summary

Executive summary

• Headline earnings rose 4% to ZAR 22.0 billion for H1 2024, with ROE at 18.5% and strong organic growth across all business units.

• Maintained robust capital position with CET1 ratio at 13.5% and declared highest-ever interim dividend of 744 cents per share, up 8%, with a payout ratio of 56%.

• Achieved 5% growth in active client numbers to 19.5 million and 10% increase in fee income in personal and private banking in South Africa.

• Continued to execute strategic priorities: client experience transformation, operational excellence, and sustainable growth, enabled by technology investments.

• Over R21 billion mobilised in sustainable finance in H1 2024, with cumulative R127 billion since 2022.

Financial highlights

• Net interest income rose 7% to ZAR 50.7 billion, with margin expansion to 497 basis points.

• Cost-to-income ratio improved to 49.7%; cost growth contained to less than 1%.

• Credit impairment charges fell 15% to ZAR 8.0 billion; credit loss ratio improved to 92bps (1H23: 109bps).

• Franchise headline earnings up 7% in ZAR and 17% in constant currency.

• Non-interest revenue declined 9% to ZAR 28.9 billion, impacted by accounting reclassification of liquid assets.

Outlook and guidance

• FY24 guidance reaffirmed: banking revenue growth expected in low single digits in ZAR, low double digits in constant currency.

• Cost-to-income ratio anticipated to be flat or lower year-on-year; ROE to remain within the 17%-20% target range.

• Credit loss ratio expected at the top of the 70-100bps range; CET1 ratio target raised to >12.5%.

• Loan growth in South Africa expected to revert to mid-to-high single digits as rates ease.

• South African inflation expected to moderate, with interest rate cuts anticipated in 2H24 and 2025.