Standard Bank expects sharp fall in FY'20 profit
South Africa-based Standard Bank Group Ltd. expects its full-year 2020 profit to decline by as much as 50% year over year, largely because due the impact of the coronavirus crisis.
In a trading update, South Africa's largest bank by assets said its headline EPS is expected to be between 8.83 rand and 10.60 rand, or between 40% and 50% lower than in 2019. It will release full year 2020 results on March 11.
The bank's full-year 2019 net income attributable to the parent stood at 26.32 billion rand, against 28.20 billion rand in 2018, S&P Global Market Intelligence data shows.
South Africa has been hit hard by the pandemic, with 1,521,700 cases as of March 9, the 16th-highest number of infections globally, according to Johns Hopkins University. COVID-19 prompted a sharp increase in the country's debt levels in 2020, which could increase further in the medium term to finance vaccination efforts or additional liabilities before stabilizing, Deloitte said in a March 8 report.
Finance Minister Tito Mboweni said debt levels are expected to reach 80% of the country's GDP in 2021 and would peak below 90% by 2025, the Financial Times reported. He also said the economy is projected to rebound 3.3% in 2021 following a 7.2% contraction in 2020.
Standard Bank's credit impairment charges for the first half of 2020 spiked to 11.29 billion rand from 4.25 billion rand a year earlier. The bank said in August that further provisions may be required should the outlook deteriorate beyond the base scenario.
By the end of June 2020, the bank had approved 8 billion rand in loans to businesses through the South African government's COVID-19 loan guarantee scheme.
Other news
* Israel's central bank proposed that banks hold off from paying out dividends until the end of September, citing a persisting "uncertain environment regarding the continuation of the health crisis and its related economic ramifications" despite lenders' progress in restoring their eroded capital buffers.
* Bank Leumi le-Israel BM's full-year 2020 net income attributable to shareholders decreased to 2.10 billion shekels, from 3.52 billion shekels a year ago, as loan loss expenses rose on a yearly basis to 2.55 billion shekels from 609 million shekels. Israeli peer Mizrahi Tefahot Bank Ltd., meanwhile, saw its fourth-quarter 2020 consolidated net profit attributable to shareholders rise to 506 million shekels from 440 million shekels a year earlier due to its acquisition of Union Bank of Israel Ltd. Excluding the effect of the acquisition, net profit amounted to 439 million shekels.
* Israel Discount Bank Ltd. received approval from the Israel Competition Authority in relation to its previously announced agreement with Shufersal Ltd. to jointly set up a digital wallet based on the bank's PayBox payments platform.
* South Africa's Nedbank Group Ltd. said its full-year 2020 headline EPS could drop by between 55% and 60% year over year to between 11.72 rand and 10.42 rand due to the impact of the coronavirus pandemic. Local peer FirstRand Ltd., meanwhile, proposed to pay an interim dividend of 10 rand per ordinary share for its fiscal first half ended Dec. 31, 2020, down from 1.46 rand per share in the year-ago period, after not declaring a dividend for the previous six months due to the pandemic. The bank's headline earnings for the period amounted to 11.15 billion rand, down 20% year over year.
* South African insurer Sanlam Ltd. expects its 2020 net operational earnings to fall to a range of 352.0 cents per share to 400.9 cents per share from 488.9 cents per share a year ago. Local peer Old Mutual Ltd. also expects its adjusted headline earnings for full year 2020 to decrease by 70% to 80% year over year amid increased provisions and reserves related to the COVID-19 pandemic.
* South Africa-based insurance company Liberty Holdings Ltd. agreed to acquire stakes in unit Liberty Kenya Holdings PLC from two shareholder groups for 11 shillings per share. The company is paying roughly 545.0 million shillings for 49,543,920 ordinary shares to one group of shareholders and 381.6 million shillings for 34,692,010 ordinary shares to the other.
* Saudi Arabia's central bank extended a deferred payment program for private sector financing by three months until June-end to ease the pandemic's economic impact, Reuters reported. The regulator also extended a guaranteed financing program aimed at supporting small businesses by a year to March 14, 2022.
* Egypt-based CI Capital Holding Co. SAE rejected Banque Misr SAE's offer to increase its stake in the company to 90%, with the former's board saying that the 4.7 pound-per-share bid was too low, Amwal Al Ghad reported. CI Capital wants the offer price raised by 19% to 5.60 pounds.
* Qatar-based Commercial Bank PSQC priced its inaugural international $500 million, five-year Additional Tier 1 bond at a yield of 4.50%. The order book for the perpetual non-call offering reached roughly $1.1 billion.
* Angola-based Banco de Negócios Internacional SA injected €4 million into Portuguese unit BNI - Banco de Negócios Internacional (Europa) SA, which is awaiting a buyer after Chinese investors backed out of the purchase almost a year ago, ECO reported.
* The U.S. is considering imposing sanctions on Lebanese central bank Governor Riad Salamé amid a probe into allegations of embezzling public funds, sources familiar with the matter told Bloomberg. The measures could reportedly include freezing his overseas assets and limiting his ability to do business abroad.
* A pan-African payment and settlement system will be launched in April, with the West African region's central bank approving $500 million to support implementation of a pilot project there, according to Financial Afrik.
Rehan Ahmad, Pádraig Belton and Nelson Siqueira contributed to this report.
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