By Nqobile Dludla
JOHANNESBURG (Reuters) -Standard Bank, Africa’s biggest lender by assets, on Thursday forecast headline earnings per share (HEPS) growth of 8-12% over the medium term after its annual profit rose 4%.
The South Africa-based lender said its headline earnings rose to 44.5 billion rand ($2.42 billion) in the year ended December 31. Its HEPS was up 4% at 26.91 rand.
The new medium-term target for HEPS is for 2026 to 2028, the bank said. Its return on equity target range for the period is 18%-22%.
CEO Sim Tshabalala told investors that the growth is based on improving economic headwinds across its portfolio of 20 sub-Saharan countries and expects currencies to be more stable in 2025.
In South Africa, declining inflation and interest rates, as well as ongoing policy reform and improved business and consumer confidence, is seen supporting economic growth.
Tshabalala is also betting on infrastructure and energy development opportunities across Africa, adding more private banking clients and the soon-to-be-opened Egypt representative office, for which he said the bank was awaiting final approval.
“This will enable us to better support our clients who are already active in North and East Africa, who are using Egypt as their base for multinational operations in Africa and who are trading along the Africa-Gulf cooperation council corridor,” Tshabalala said.
For the current reporting period, the lender’s net income grew 2% to 181.7 billion rand, driven by a 3% increase in its net interest income to 101 billion rand.
Growth in loans and advances rose a mere 2% due to lower consumer affordability and demand for credit as interest rates remained high, on average, in 2024, the bank said.
Credit impairment charges fell 7% to 15 billion rand, largely due to a slowdown in early arrears and inflows into non-performing loans in the retail and business segments.
($1 = 18.3709 rand)
(Reporting by Nqobile Dludla; Editing by Christopher Cushing and Philippa Fletcher)
