Standard Bank warns of Covid earnings hit


Standard Bank warns of Covid earnings hit

Published Date: 2020-07-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Standard Bank warns of Covid earnings hit

The bank says headline earnings may halve due to the impact of continent-wide lockdowns on economic activity.

Standard Banks says its first-half earnings could fall by as much as 50% after Covid-19 resulted in fewer transactions and loans, more debt relief for customers and rising provisions for bad loans.

In a trading statement, the bank said while activity levels had started to improve as lockdowns were eased across the continent, disbursements and transaction activity levels were still below pre-Covid-19 levels. It also continued to provide relief to clients, while releasing funds to small businesses under the SME Loan Guarantee Scheme.

Last month, the group said credit impairments may even exceed those recorded during the global financial crisis a decade ago. It said it expected its credit loss ratio for the full year to be above its through-the-cycle range of 70 to 100 basis points.

For the six months to end-June, the bank expects headline earnings per share to be between 30% and 50% lower than the 837.4c reported a year ago. Earnings per share would be down by between 60% and 80% due to the impact of the sale of its 20% stake in ICBC Argentina to the Industrial and Commercial Bank of China, which was completed last August, as well as the impairment of certain IT intangible assets.

The bank expects to release its interim results on 20 August. Its shares rose 5.1% to R118.55 yesterday.

Similar Stories