Latest news with #StandardBankGroupLtd
Yahoo
18-03-2025
- Business
- Yahoo
Standard Bank Group Ltd (SBGOF) (Q4 2024) Earnings Call Highlights: Navigating Growth Amid ...
Headline Earnings: ZAR45 billion, up 4% year-on-year; 14% growth in constant currency terms. Dividends: ZAR15.7 per share, a 6% increase. Return on Equity (ROE): 18.5% for the year. Cost to Income Ratio: Improved to 50.5%. Credit Loss Ratio: 83 basis points. Common Equity Tier 1 Ratio: 13.5%. Revenue Growth: Compound annual growth rate of 12% since 2020. Loan Growth: 3% increase in 2024. Deposit Growth: 6% increase. Net Interest Income: Grew by 3% to ZAR201 billion. Non-Interest Revenue: Net fee and commission revenue increased by 4% to ZAR32 billion. Insurance and Asset Management Earnings: Grew by 17% to ZAR3.3 billion. Assets Under Management: ZAR1.5 trillion. Dividend Payout Ratio: 56%. Headline Earnings Growth Target (2026-2028): 8% to 12% CAGR. Return on Equity Target (2026-2028): 18% to 22%. Warning! GuruFocus has detected 6 Warning Sign with SBGOF. Release Date: March 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Standard Bank Group Ltd (SBGOF) achieved a headline earnings growth of 4% in 2024, with a 14% increase in constant currency terms. The company declared dividends of ZAR15.7 per share, marking a 6% increase from the previous year. The return on equity for the year was 18.5%, well within the target range of 17% to 20%. The cost to income ratio improved to 50.5%, indicating effective cost management. Insurance and asset management business units showed strong growth, with earnings increasing by 17% to ZAR3.3 billion. Weaker African currencies, particularly the Nigerian naira and the Angolan kwanza, reduced rand earnings by 9%. Headline earnings growth was moderate at 4%, compared to 35% in 2022 and 27% in 2023. The net interest income growth was relatively subdued at 3%, impacted by lower margins and pricing pressures. Credit impairments on financial investments increased due to sovereign credit risk deterioration in Malawi and Mozambique. The devaluation of subsidiary currencies against the rand had a meaningful impact on the income statement, particularly in West Africa. Q: How should we think about growth in trading income for 2025 and beyond, and what factors might affect this momentum? A: Luvuyo Masinda, CEO of Corporate and Investment Banking, explained that the trading revenue is largely driven by client activity, which gives confidence in its sustainability. The supportive macroeconomic conditions in Africa are expected to continue driving growth in trading revenues. Additionally, the development of financing businesses within global markets is anticipated to contribute to future growth. Q: Can you expand on the scope for further cost containment in the medium term? A: Arno Daehnke, Chief Finance and Value Management Officer, noted that cost efficiency is an ongoing focus. The reduction of physical distribution costs through digital solutions and the decrease in amortization costs as more technology is processed in the cloud are expected to provide natural tailwinds for cost containment. Q: What are your expectations for advances growth in BCB and PPB segments in 2025? A: Bill Blackie, CEO of Business and Commercial Clients, indicated that asset demand in South Africa is expected to continue growing, with strong asset growth in Africa regions. Funeka Montjane, CEO of Consumer & High Net Worth Clients, added that there are early signs of double-digit increases in disbursements, particularly in personal loans and mortgages. Q: What gives you confidence that currency devaluations in Africa will not repeat in 2025? A: Arno Daehnke highlighted that improved macroeconomic outlooks in countries like Nigeria, Ghana, Malawi, and Angola, with expected reductions in inflation, should stabilize currencies. This improved outlook is expected to prevent a repeat of the significant currency devaluations seen in 2024. Q: What elements of the income statement or balance sheet need to change to achieve the 18% to 22% ROE target? A: Arno Daehnke emphasized the need for revenue growth, cost discipline, and capital efficiency. The focus will be on driving top-line growth, maintaining positive operating leverage, managing credit portfolios carefully, and optimizing capital deployment to meet hurdle rates. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
13-03-2025
- Business
- Yahoo
Standard Bank Sees South African Coalition Surviving Budget Saga
(Bloomberg) -- South Africa's ruling coalition is unlikely to splinter despite differences between the partners over its first budget, Standard Bank Group Ltd. Chief Executive Officer Sim Tshabalala said. Trump DEI Purge Hits Affordable Housing Groups Electric Construction Equipment Promises a Quiet Revolution NYC Congestion Pricing Toll Gains Support Among City Residents Open Philanthropy Launches $120 Million Fund To Support YIMBY Reforms Prospect Medical's Pennsylvania Hospitals at Risk of Closure Although the members of the so-called government of national unity are divided over budget policy, the coalition will likely ride out the storm intact. 'The base case is that the GNU in South Africa remains and continues to operate,' Tshabalala said in an interview with Bloomberg TV's Jennifer Zabasajja. 'The evidence in South Africa is that the coalition will subsist.' Last year's national election failed to produce an outright winner, forcing the African National Congress — which had held a parliamentary majority for three decades after apartheid ended in 1994 — to seek partners to get it past the 50% threshold needed to form a government. Lawmakers called off last month's presentation of the budget after the partners refused to back Finance Minister Enoch Godongwana of the ANC over plans to increase value-added tax by two percentage points this year. A new proposal presented on March 12 trimmed the increase to 1 percentage point spread over two years. Still, the second-biggest party in the coalition, the Democratic Alliance, maintains it won't support any permanent tax hikes or back the budget in its current form, but remains open to further negotiations. Read: South African Minister Seeks Budget Support as Coalition Frays Standard Bank's Tshabalala said that such disagreements are normal within governments. He cited Germany — where a failure to agree on a budget resulted in the collapse of the coalition government — and the US, where Republicans and Democrats are wrangling over a spending bill to avert a government shutdown on Saturday. 'It's normal in a country that is democratic for these conflicts to happen,' Tshabalala said, adding that the parties will likely seek a consensus on the budget. He said the VAT proposal was 'creative and careful' because it sought to ensure the government was able to generate much-needed revenue, without subjecting businesses and workers to higher income taxes. The government's commitment to reducing its debt to 76.2% of gross domestic product over the next year surpassed estimates from ratings companies, showing authorities' focus on revenue and cost management, he said. 'The big question of course is 'will the budget pass? Will it be supported by the GNU,'' Tshabalala said. 'I don't know. We will see.' How America Got Hooked on H Mart How Trump's 'No Tax on Tips' Could Backfire for the Working Class How Natural Gas Became America's Most Important Export Germany Is Suffering an Identity Crisis 80 Years in the Making Disney's Parks Chief Sees Fortnite as Key to Its Future ©2025 Bloomberg L.P.
