Standard Bank Expects Strong Growth in FY23 Earnings

  • Standard Bank projects significant growth in earnings for FY23, expecting HEPS and EPS to rise by 23%-30%.
  • Methodology amendment in interest recognition on Stage 3 loans results in higher net interest margin and credit loss ratio.
  • FY23 results to be unveiled on 14th March 2024; shareholders advised on forthcoming changes and restated ratios.
Published by
Lethabo Ntsoane

Standard Bank Group Limited anticipates robust growth in its earnings for the fiscal year ended 31 December 2023 (FY23). The bank, in its recent trading statement, announced that it is in the final stages of preparing its financial results for FY23 and is confident in the accuracy of its projections.

Expected Financial Performance

According to the trading statement, Standard Bank expects its headline earnings per share (HEPS) for FY23 to be between 23% and 28% higher than the previous fiscal year, translating to a range of 2 522.0 to 2 624.5. Similarly, the bank anticipates its earnings per share (EPS) to increase by 25% to 30% compared to FY22, with a projected range of 2 592.6 to 2 696.3.

Restated Ratios Reflecting Methodology Amendment

During the finalization of FY23 results, Standard Bank made adjustments to its methodology for recognizing interest on Stage 3 loans. While this adjustment led to an increase in net interest income and credit impairment charges, it has no impact on HEPS or EPS. The bank applied this amendment retrospectively to its FY22 financials, resulting in restated ratios as follows:

Ratio2022 As ReportedAdjustmentRestated
Net interest margin425 basis points7 basis points432 basis points
Credit loss ratio75 basis points8 basis points83 basis points
Cost-to-income ratio54.4%0.5%53.9%

Impact on FY23 Results

This methodology amendment will also affect related figures and ratios for FY23, resulting in a higher net interest margin and credit loss ratio than previously anticipated.

Upcoming Announcement

Standard Bank is scheduled to release its FY23 results on 14th March 2024. Investors and stakeholders can find details about the presentation on the bank’s Investor Relations website.

Conclusion

With its strong growth expectations for FY23, Standard Bank continues to demonstrate resilience and strategic adaptability in navigating the ever-evolving financial landscape. As the bank prepares to unveil its financial performance for the year, all eyes are on the anticipated results, which are poised to reflect the bank’s commitment to delivering value to its shareholders and stakeholders alike.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo