Credit growth boosts Standard Bank
July 29, 2007
Standard Bank's interim earnings a share probably rose by between 20 percent and 30 percent, Africa's largest lender said on Friday, as faster economic growth in South Africa boosted demand for credit.
No reasons were given for the gain, but UBS banking analyst Stephan Potgieter said Standard Bank "has the dominant corporate banking franchise in South Africa and provides significant gearing to the emergence of a strong corporate banking cycle". He said the bank. also had "by far the most momentum in retail banking".
Economic growth at almost 5 percent is spurring companies to borrow more to expand to meet demand from a broadening black middle class. As South Africa's biggest provider of credit cards, Standard Bank also benefits from strong consumer confidence.
Potgieter said local banks "have been among the strongest across emerging markets". He expected growth of 20 percent a year for the big four banks over the next two years, off a relatively high base.
On July 10 FirstRand, the second-largest financial firm, said annual headline earnings a share to June rose by up to 36 percent. This week top consumer bank Absa said first-half profit rose by at least 22 percent.
Standard Bank led bank shares down on Friday, plunging 5.3 percent to R98.50 on emerging market jitters. - Bloomberg, Johannesburg
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