Staff Writer
Standard Bank Group has said uncertainty stemming from the conflict in the Middle East and its impact on inflation and monetary policy had temporarily reduced client confidence to transact, invest and borrow.
The group said that if recent positive developments continue, it expects confidence and business momentum to recover during the second half of 2026.
The group has reported resilient earnings growth for the first five months of 2026, despite an increasingly uncertain global operating environment marked by geopolitical tensions, higher energy prices and trade policy uncertainty.
In a voluntary trading update for the five months ended 31 May 2026, the banking group said earnings growth was supported by continued franchise momentum, which drove balance sheet expansion and higher revenue, alongside disciplined cost management and lower credit impairment charges.
The group said balance sheet growth was driven by strong loan origination in investment banking and increased lending in business and commercial banking, particularly in South Africa.
Personal and private banking recorded moderate growth, while current accounts and term deposits posted strong gains in line with the bank’s focus on expanding its transactional banking franchise.
Revenue growth was supported by higher client activity, a growing customer base and increased transaction volumes.
However, this was partly offset by the negative impact of lower average interest rates across the portfolio and continued competitive pricing pressure in South Africa’s home loan market.
Trading revenue also benefited from periods of heightened market volatility, particularly during the first quarter of the year.
Standard Bank said it maintained strict cost discipline while continuing to invest in expanding its client franchise, improving operational efficiency and optimising its physical infrastructure.
Cost growth remained broadly in line with revenue growth during the period.
Credit impairment charges declined compared with the corresponding period last year, despite higher forward-looking provisions to account for a weakening macroeconomic outlook.
The lower impairment charges, together with balance sheet growth, resulted in a lower credit loss ratio.
The group’s insurance and asset management business continued the strong earnings momentum recorded in 2025, supported by improved life risk experience, strong customer retention and growth in assets under management in South Africa and Nigeria.
Standard Bank noted that earnings growth moderated from the 12% reported during the first quarter, as expected.
Its Africa regions business continued to benefit from geographical diversification.
Weaker performance in South and Central Africa was offset by stronger growth in the West and East Africa portfolios, while the South African business maintained positive momentum through competitive client offerings and continued business growth.
The bank said it remained well capitalised and liquid, with a Common Equity Tier 1 (CET1) capital ratio of 13.2% as at 31 March 2026.
