Company Announcements

Standard Bank 1Q20 Operational Update

Source: RNS
RNS Number : 4697K
Standard Bank Group Limited
22 April 2020

Standard Bank Group Limited

22 April 2020


Financial information provided to the Industrial and Commercial Bank of China Limited ("ICBC") and update on the group's operational performance for the three months ended 31 March 2020


Financial information provided to ICBC


On a quarterly basis the Standard Bank Group discloses to ICBC sufficient information to enable ICBC to equity account the group's results. Accordingly, the following consolidated financial information, prepared on an International Financial Reporting Standards ("IFRS") basis, is being provided to ICBC for the three months ended 31 March 2020.


Statement of changes in ordinary shareholders' equity for the three months ended 31 March 2020 



Balance as at 1 January 2020

Earnings attributable to ordinary shareholders

Other movements for the period

Balance as at 31 March 2020






Ordinary share capital





Ordinary share premium

17 822



17 822

Foreign currency translation and hedging reserve

(8 570)


12 197

3 627

Foreign currency translation reserve (FCTR)

(7 583)


12 7401

5 157

Foreign currency net investment and cash flow hedging reserve




(1 530)

Retained earnings

159 063

4 818

(8 629)2

155 252

Empowerment reserve and treasury shares

(2 728)


(1 702)

(4 430)


5 480



6 361

Ordinary shareholders' equity

171 229

4 818

2 747

178 794

1 The movement in the FCTR was primarily as a result of the depreciation of the Rand against the USD, GBP and certain African currencies.

2 Primarily comprises the ordinary dividends declared in March 2020.


Update on the group's operational performance for the three months ended 31 March 2020


In the three months to 31 March 2020 ("1Q20"), the operating environment in South Africa deteriorated and consumer and business confidence declined further. In Africa Regions, lower oil prices threatened oil exporters and declines in global demand, in particular from China, negatively impacted export-reliant economies. The Covid-19 crisis escalated quickly in March 2020. By 31 March 2020, global asset values had declined materially, emerging markets had seen large risk-off outflows and there were partial or full lockdowns across almost all of the markets in which we operate. 


The group quickly and successfully instituted its business continuity management plans, with a focus on ensuring the safety of our employees and the continued service to our clients. These are now well embedded, and the focus has turned to supporting those clients who are experiencing financial strain in these difficult times. Accordingly, we support actions taken by the South African Reserve Bank, and others, to mitigate the economic impact, reduce stress in the system and release capital to facilitate support to individuals and businesses.


Turning to the group's banking performance in 1Q20. Net interest income growth was slow as fairly robust year-on-year loan growth was offset by negative endowment and margin pressure. Non-interest revenue growth was supported by an increase in trading revenue. In South Africa, sales activity and ATM, card and branch volumes declined in late March as lockdowns and other restrictions were implemented. Operating expenses were well managed and jaws were positive. Credit impairment charges for the period were significantly higher than in the prior year. The increase was driven by deterioration in both the portfolio performance and the forward-looking assumptions used in the modelling of expected credit losses.


IFRS 9 requires the group to consider forward-looking information in the calculation of expected credit losses. Accordingly, the group has estimated an increase in economic stress caused by the crisis and, where appropriate, incorporated that in the calculation of the group's expected credit losses. It is worth noting that, by 31 March 2020, the Covid-19 related stress on individuals and businesses had, to a large extent, not emerged yet and the provisions raised were based on our best estimate at the time.


Liberty Holdings Limited's ("Liberty") performance for the period was impacted by market movements, in particular the Shareholder Investment Portfolio. Please refer to Liberty's SENS announcement dated 21 April 2020. 1Q19 headline earnings included earnings from the group's 20% stake in ICBC Argentina ("ICBCA"). The group ceased equity accounting ICBCA earnings in September 2019 post the decision to sell the stake. The group recorded a small loss associated with its 40% stake in ICBC Standard Bank PLC.


In 1Q20 earnings attributable to ordinary shareholders were 27% lower than in the comparative period. During the period the headline earnings adjustable items were not material.


The group remains well capitalised and liquid. The group's Basel III disclosure as at 31 March 2020 will be released in May 2020.


The information contained in this announcement and that on which the operational performance update is based has not been reviewed and reported on by the group's external auditors.


For further information, please contact:

Ann Hunter

Standard Bank Group Limited
9th Floor
5 Simmonds Street, Johannesburg PO Box 2001
South Africa
Telephone number: +27 11 415 4194


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