Standard Bank Group Limited

The Standard Bank of South Africa Limited

29 November 2021

Voluntary trading update and pre-close call details

As the recovery across our markets of operation continues, the group's lending and transactional activity continues to gain momentum. In South Africa, in the ten months to 31 October 2021, mortgage, vehicle and asset finance, and business disbursements continued to trend well above prior periods and personal unsecured lending disbursements recovered to 2019 levels. In Africa Regions, personal loan volumes were also higher period on period, driven by a strong recovery in branch-originated loans. Investment Banking (IB) origination supported a recovery in the IB loan book balances to levels close to those as at 31 December 2020.

Revenues continued to recover, supported by higher average balances, a growing client base, improved sales, and higher activity levels relative to the comparative period (i.e. the ten months to 31 October 2020). In South Africa, card spend recovered to 2019 levels, while merchant acquiring turnover was well in excess thereof. In Africa Regions, transaction volumes also reflected good growth. Trading revenue has been better than expected in recent months.

Costs remain well managed. Cost growth was driven by higher activity- and performance-related costs, including incentives. While we still expect negative jaws for FY21, we expect jaws to narrow relative to 1H21. 

Credit performance continues to track better than expected.

In October, the relevant Liberty Holdings Limited (Liberty) preference and ordinary shareholders approved the schemes proposed by the group. With regards to the Liberty preference shareholders, the conditions to the preference share scheme were satisfied, the consideration has been paid and the Liberty preference shares have been delisted from the JSE Limited. With regards to the Liberty ordinary shareholders, we are in the process of obtaining the requisite regulatory approvals and still expect to satisfy the remaining outstanding conditions to the ordinary share scheme to allow us to complete the transaction in the first quarter of 2022. With regards to Liberty's performance, please refer to Liberty's voluntary operational update announcement released on SENS on 18 November 2021.

The group's capital and liquidity levels remain well above regulatory minimums and internal risk appetite thresholds. The group's common equity tier 1 ratio (including unappropriated profits) was 13.5% as at 30 September 2021 (31 December 2020: 13.2%). Additional capital and liquidity information can be found in the group's Pillar 3 Report available on the group's Investor Relations website.

Group guidance for the twelve months to 31 December 2021, as provided in August 2021, remains unchanged.

While the global recovery is expected to be uneven, our diversified client base, broad portfolio of solutions, and geographic footprint position us well to continue to manage risk and find opportunities to partner our clients in their growth journeys. We are executing the strategy set out at our Strategy Update in August 2021 and are focused on delivering against the targets we committed to. All three of our client segments are showing good underlying momentum, which bodes well for 2022.

Standard Bank will release its financial results for the 2021 financial year on 11 March 2022. The event details will be made available on the group's Investor Relations website in due course.

Investor call

Standard Bank will host an investor call at 17h00 (South Africa time) on 29 November 2021. To register for the call please use the link below:

Standard Bank Pre-close call Registration link

Alternatively, the call registration details are available on the Standard Bank Group Investor Relations website - https://reporting.standardbank.com/

A replay will be available on the Investor Relations website shortly after the end of the call. 

Shareholders are advised that the information contained in this voluntary trading update has not been reviewed or 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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