Africa’s largest lender, Standard Bank, sees growth in transactional volumes and interest rates.
Standard Bank Group, the biggest lender in Africa, is reporting a significant jump in its earnings for Q1 2023, driven by higher interest rates and increased transactional volumes. The bank’s success is not without risks, however, as it faces the impact of higher inflation and geopolitical tensions.
Standard Bank Group has announced a 37.8% increase in its attributable earnings for Q1 2023. The bank’s net interest margin and net interest income growth were supported by higher average interest rates and a larger balance sheet. The bank’s earnings for the period totaled 10.2 billion rand (USD 563.98 million).
Transactional volumes and higher interest rates boost earnings
Standard Bank cited the continued growth in transactional volumes and annual price increases across the continent as factors supporting fee growth. Trading revenue was higher than the previous year and above expectations. However, the bank reported that credit impairment charges in Q1 2023 were higher than a year earlier.
Managing risks amid a volatile environment
Despite its strong performance, the bank acknowledged that the business environment posed risks. The bank is monitoring the impacts of potentially higher inflation, electricity supply constraints in South Africa, and global geopolitical tensions. These factors could affect the bank’s outlook.
Standard Bank is well capitalized and committed to delivering positive jaws and an improving return on equity in 2023, a statement said. The bank remains cautious, however, and is prepared to face challenges in the volatile business environment.
South Africa is currently undertaking a range of legislative steps to avoid the threat of greylisting.