Standard Bank Group produces resilient results in challenging environment
3 March 2016

Results for the year ended 31 December 2015 at a glance:

Headline earnings: R22 002 million, up 27%
Headline earnings per share (HEPS): 1 359 cents, up 27%
Total dividend per share: 674 cents, up 13% from FY14
Tier 1 capital adequacy ratio: 13.3% (FY14:12.9%)
Net asset value (NAV) per share: increased by 9%
Return on equity (ROE): increased to 15.3% from 12.9% in FY14
Cost-to-income ratio: increased to 56.7% from 55.0%
Credit loss ratio: declined to 0.87% from 1.00%

Standard Bank Group has produced solid results for 2015 in an environment impacted by moderate global economic growth and weakening business and consumer confidence in South Africa.

During this period, the group completed the disposal of its controlling interest in Standard Bank Plc (the disposal), which was renamed ICBC Standard Bank Plc (ICBCS) and was designated as discontinued operations within the group’s income statement. As a result of the completion of the transaction, earnings attributable to ordinary shareholders includes R2,8 billion of net disposal gains which have been excluded from headline earnings.

Headline earnings for the year reported within the group’s discontinued operation include the effects of a partial recovery in respect of insurance claims relating to the external fraud in the Qingdao port in China; a write-down of the residual aluminium exposure in China; and cash flow hedge releases relating to the disposal. The loss from the discontinued operation within headline earnings amounts to R90 million.

Operating environment

In 2015 global economic growth remained moderate at 3.1% with growth in emerging market and developing economies expected by the IMF to have declined for the fifth consecutive year. Sub-Saharan Africa economic growth is estimated to have reduced sharply to 3.5% in 2015 from 5.0% in 2014 as lower commodity prices impacted net exports and placed pressure on economic activity even as lower oil prices eased energy import costs. While economic activity remains more robust than in many other developing regions of the world, the strong growth momentum evident in the region in recent years has dissipated, particularly within oil-exporting countries.

2015 economic growth forecasts for South Africa were marked down progressively during the year as the full impact of commodity price deflation, and weakening business and consumer confidence limited demand.

Business Units

Personal & Business Banking (PBB)

PBB’s headline earnings of R11 232 million increased by 15%. NII grew by 11% and moderate growth of 7% in NIR resulted in total income growth of 9%. Credit impairment charges were 5% lower and operating expenses increased by 10%. PBB’s ROE was maintained at 18.1%. PBB South Africa earnings increased by 13% while PBB rest of Africa earnings improved to R192 million from R104 million. Good growth of 51% in PBB outside Africa earnings, which amounted to R461 million, was achieved and assisted further by rand depreciation during the year.

  • Transactional products’ headline earnings of R3 204 million were 9% higher than in the prior period. Total income increased by 11%.
  • Mortgage lending headline earnings increased by 25% to R2 450 million and total income growth of 8% was achieved.
  • Vehicle and asset finance grew headline earnings by 79% to R306 million, with total income growth of 7%.
  • Card products increased headline earnings by 9% to R1 535 million.
  • Lending products improved headline earnings by 14% to R1 442 million and total income growth of 3% was achieved.
  • Bancassurance and wealth increased headline earnings by 11% to R2 295 million. Total income improved by 12%.
Corporate & Investment Banking (CIB)

CIB’s headline earnings of R7 923 million were 59% higher than in the prior period as the significant headline loss from discontinued operations amounting to R3 745 million in FY14 did not recur and resulted in a ROE of 14.3%. Continuing operations’ headline earnings fell by 8% and were materially impacted by the 40% associate share in the loss incurred by ICBCS for the 11 months ended December 2015, amounting to R1 173m, which also included the fine paid in respect of a Deferred Prosecution Agreement with the Serious Fraud Office in the United Kingdom.

  • Transactional products and services grew headline earnings by 4% to R2 662 million, with total income increasing by 8%.
  • Global markets recorded headline earnings growth of 19% to R3 889 million, with income growth of 12%.
  • Investment banking earnings increased by 1% to R2 598 million as total income increased by 6%.
  • Real estate and principal investment management (PIM) recorded headline earnings of R51 million from R312 million in FY14.

Normalised headline earnings of R4 128 million were 4% higher, representing 7% growth in operating earnings and a 2% decrease in earnings from the Shareholder Investment Portfolio (SIP).


Global growth is projected by the IMF to accelerate to 3.4% in 2016 and 3.6% in 2017 although the pickup in global activity is projected to be more gradual than previously anticipated, especially in developing economies. In advanced economies, a modest and uneven recovery is expected to continue. Risks to the global outlook remain tilted to the downside influenced strongly by a broad-based slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from accommodative monetary conditions in the United States.

Most countries in sub-Saharan Africa are expected to experience a gradual pickup in economic growth, but at rates that are lower than those seen over the past decade. This mainly reflects the continued adjustment to lower commodity prices and higher borrowing costs, which are affecting some of the region’s largest economies, as well as a number of smaller commodity exporters. In South Africa, the growth outlook for 2016 has slipped to below 1% due mainly to the effect of the drought and tighter financial conditions, and the risk of further economic growth disappointment remains elevated.

Says Sim Tshabalala, Standard Bank Group Chief Executive: “The year ahead is likely to provide a demanding operating environment in which consumers and businesses will have to adapt to higher interest rates and the full effect of currency weakness. The group’s strategic market positioning, well-capitalised and liquid balance sheet, and committed employees are able to withstand uncertain macro developments and volatile markets for the sustained benefit of our customers. Our medium-term ROE target of between 15% and 18% remains intact. The group’s ROE performance will however be affected by factors such as economic growth in South Africa and the rest of Africa, and the retention of a South African investment grade sovereign credit rating. As such, we are working closely with the authorities to promote a stable, growth-friendly domestic environment.”

More details of Standard Bank Group’s results can be found at

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