March 7, 2019 / 7:15 AM / 4 months ago

UPDATE 1-S.Africa's Standard Bank posts leaner FY earnings growth

(Recasts, adds detail, CEO quote, and share movement)

JOHANNESBURG, March 7 (Reuters) - Standard Bank, South Africa’s largest lender by assets, on Thursday said its full-year earnings rose at less than half the growth rate of 2017, as the impact of adverse markets offset strong performances in its retail banking division.

The lender’s headline earnings per share (HEPS) for the year ended Dec. 31 rose 7 percent to 1,748 cents ($1.23), compared with 1,620 cents a year ago.

HEPS is the main profit measure in South Africa, which strips out certain one-off items.

The bank had delivered sustainable earnings and improved its return on equity to 18 percent, underpinned by the strength and breadth of its franchise, Standard Bank CEO Sim Tshabalala said.

“In 2019, we will build on the franchise momentum from 2018, continue to simplify, rationalise and digitise and seek ways to accelerate our delivery,” he said, adding the bank expects an uptick in growth in South Africa and across the continent this year.

The lender said a weaker-than-expected South African economy, slow progress in policy changes and higher taxes weighed on confidence and demand for credit, with loans in its retail and business bank growing just 3 percent at home.

This compared with 22 percent elsewhere in Africa, which, combined with a 30 percent drop in impairment charges, helped boost earnings by 10 percent.

Standard Bank’s corporate and investment bank, however, as well as its joint venture with Industrial and Commercial Bank China (ICBC), were hit by a rout in global markets that has seen investment banks, asset managers and insurers suffer.

Earnings in its investment banking division slipped 2 percent, while its return on equity for the unit fell to 19.3 percent from 22 percent. ICBC Standard recorded a loss of $14.9 million for the year.

Standard Bank announced a final dividend of 540 cents per share, resulting in an increase of 7 percent for the year. Its common equity tier-1 capital ratio stood at 13.5 percent.

The bank’s shares were up 0.72 percent at 189.45 rand per share, as of 0705 GMT. (Reporting by Emma Rumney and Tanisha Heiberg; Editing by Shreejay Sinha and Sherry Jacob-Phillips)

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