Overview of financial results - Standard Bank - Investor Relations

Standard Bank Group Analysis of financial results for the six months ended 30 June 2013
Total income and headline earnings by product
Change
%
1H13
Rm
Total income
1H12
Rm
FY12
Rm
Change
%
1H13
Rm
Headline earnings
Mortgage lending 26 3 011 2 393 5 153 85 567 306 970
Instalment sale and finance leases 14 1 393 1 227 2 546 38 135 98 208
Card products 14 2 438 2 139 4 455 13 602 532 1 200
Transactional products 6 9 647 9 071 18 984 (13) 1 060 1 215 2 647
Lending products 25 4 089 3 266 7 034 13 390 344 724
Bancassurance and wealth 23 2 438 1 983 4 340 28 901 702 1 593
Personal & Business Banking 15 23 016 20 079 42 512 14 3 655 3 197 7 342
1H12
Rm
FY12
Rm
Mortgage lending
• Growth in net interest income due to increased pricing on new
loans to accommodate the impact of Basel III.
• Lower registration volumes.
• Reduced non-performing loan portfolio following several
management initiatives, including enhanced collection
activities and restructuring where appropriate.
• Lower credit impairment charge.
• Strong loan book growth in Botswana and Namibia on the back
of buoyant mortgage markets.
Instalment sale and finance leases
• Continued improvement in South African vehicle sales,
primarily in the personal lending market.
• Increased non-performing loans portfolio leading to higher
specific impairments.
• Business banking loan book growth in Kenya and Uganda.
Card products
• Growth in the book due to increased turnover following
acquisition initiatives and account upgrades.
• Improved net interest margin.
• Increased card acquiring turnover due to the acquisition of
high value corporate merchants in the latter part of 2012
coupled with growth in existing business.
• Higher credit impairments, in line with the improved net
interest margin and increased risk appetite.
Transactional products
• Good balance growth in transactional, savings and investment
portfolios.
• Negative endowment impact of lower average interest rates in
South Africa, Uganda, Nigeria and Mozambique.
• Lower fee structures due to the utilisation of cheaper Access
accounts for long-term client acquisition strategy.
• Full year impact of reduced pricing introduced in April 2012.
• Increased term deposits in the rest of Africa.
• Higher operating expenses in the rest of Africa due to
increased headcount and branch expansion, primarily in Angola
and Nigeria.
Lending products
• Increased balances in overdrafts and revolving credit facilities
due to higher limit utilisations and a focused approach to sales.
• Improved risk-based pricing.
• Higher credit impairments in all portfolios due to a deterioration
in the non-performing loan mix and growth in the loan book.
• Revenue earned from growth in the rest of Africa’s SME
business loans and workplace banking personal loans was
offset by increased specific impairments required.
Bancassurance and wealth
• Increased volumes of short-term insurance offset by lower
underwriting profit following the finalisation of 2012 claims.
• Growth in embedded products policy base, increased
penetration into core banking products and improved loss
ratios.
• Higher insurance profits in Namibia and Mozambique following
growth in the policy base.
Personal & Business Banking – South Africa
Change
% 1H13 1H12 FY12
Net interest income Rm 20 10 496 8 755 18 838
Non-interest revenue Rm 5 7 982 7 624 15 804
Total income Rm 13 18 478 16 379 34 642
Credit impairment charges Rm 30 3 338 2 576 5 553
Operating expenses Rm 9 10 123 9 274 19 112
Headline earnings Rm 17 3 781 3 244 7 436
ROE % 20.6 21.4 23.0
Cost-to-income ratio % 54.3 56.3 54.3
Credit loss ratio % 1.50 1.26 1.33
31