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Wednesday, 14 March 2001
Stanbic produces strong set of results
- Headline earnings up 28%
- Headline earnings per share up 26%
- Cost-to-income ratio improved to 58,9%
- Return on equity 23%
Standard Bank Investment Corporation (Stanbic) announces that its headline earnings were 28 % up to R3 690 million for the year ended 31 December 2000.
Headline earnings per share of 285 cents increased by 26%.
The cost-to-income ratio improved to 58,9% from 61,6%, continuing the improvement shown in each of the past five years. The return on equity increased by 1%, to 23%.
Jacko Maree, Stanbic Chief Executive, says that the threat of Nedcor’s hostile take-over in 2000 accelerated a thorough review of the bank’s strategies and prospects. "The result was a set of targets that would convince investors and shareholders to retain and renew their faith in the group."
He says the failure of the bid enabled the group to focus without distraction on operational and strategic issues.
Business unit contributions to headline earnings were:
Retail Banking: R1 142 million (up 45%)
Standard Corporate and Merchant Bank: R765 million (up 33%)
Commercial Banking: R532 million (up 22%)
International Operations: R569 million (up 25%)
Stanbic Africa: R338 million (up 21%)
Total income, after credit provisions, of R13 035 million was 13% up. Net interest income before provisions increased by 7% to R7 232 million. The margin declined to 3,8% from 3,9% because of lower interest rates and subdued growth in domestic loans and advances.
Net income from Liberty Group of R456 million has been included in the group’s headline earnings for the year.
Non-interest income of R7 208 was 13% up and now comprises half of total income. Fees and commission were 21% up and trading income 3% lower, mainly due to quieter markets and lower volatility. The balance of non-interest income was 13% higher.
The charge for credit losses of R1 405 million was 8% lower than in 1999 and, as a percentage of loans and advances, declined to 1,2% from 1,4%. Included in this charge was R147 million for general debt provision which now amounts to R1 088 million.
Non-performing loans as a percentage of average loans were down to 4,4% from 5,5%. The total balance sheet provision for credit losses of R3 474 million exceeds the new provisioning requirements of the Banks Act.
Operating expenses increased by 6% to R8 506 million and staff costs were 5% up. Cost growth in domestic operations was only 4%.
Total assets of R284 billion were 12% higher, with banking assets reflecting an increase of 13%. Total capital and reserves increased by 26% to R17,5 billion. Loans and advances of R127 billion were 13% higher, with domestic growth restricted to 5%.
The group’s capital base was 14,2% of risk-weighted assets, with tier one capital at 10,7%. R3,5 billion of tier two capital was raised during the year, R2,7 billion domestically and R800 million internationally, which will over time improve the group’s effective cost of capital.
A final dividend of 63 cents a share (1999: 50 cents) brings the total dividend for the year to 85 cents a share (1999: 68 cents).
Maree says that sound economic and fiscal policies instituted by the South African government and consistently followed over a number of years, have created a solid platform for economic growth.
"The group is well positioned to benefit from a higher level of economic activity and, provided that there are no unforeseen adverse developments in international markets, we expect that growth in earnings for the year ahead should be satisfactory."
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