JOHANNESBURG, April 25 South Africa's No.2
lender by value Standard Bank reported a "low single
digit" rise in quarterly net interest income on Tuesday, weighed
down by weak credit demand at home and lower appetite for risk
elsewhere on the continent.
Lending to companies had become the mainstay for banks in
Africa's most industrialised economy as they pull back from high
margin but risky unsecured consumer credit, which relies solely
on a customer's promise to pay it back, due to dangerously high
personal debt levels.
But weak economies both at home and elsewhere on the
continent has hit both consumption and investment spending and
forced Standard Bank, as well as rivals, to tighten its risk
"Subdued credit demand in South Africa combined with tighter
risk appetite across the Africa Regions translated into muted
year to date growth in gross loans and advances across all
categories," Standard Bank said in a statement on Tuesday.
That resulted in net interest income, an important gauge of
lending profitability, increasing by a "low single digit" in the
three months to the end of March.
Standard Bank, 20 percent owned by China's Industrial and
Commercial Bank of China Ltd, reiterated that it was
well capitalised to withstand the impact of South Africa's
sovereign credit rating downgrade to 'junk' status.
South Africa lost its highly prized investment grade ratings
from S&P Global Ratings and the Fitch earlier this month. Both
agencies cited likely changes in economic policy after a cabinet
shake-up that saw a respected finance minister Pravin Gordhan
Shares in Standard Bank were little changed at 147.95 rand
as at 0710 GMT, largely in line with the sector.
(Reporting by Tiisetso Motsoeneng, editing by Louise Heavens)