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South Africa’s Standard Bank sees FY profit up 30%

24 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Standard Bank said on Wednesday its full-year profit would rise by up to 30 percent higher, boosted by lower losses from discontinued operations outside Africa, sending its shares up.

Standard Bank said its diluted normalised headline earnings per share (EPS) will be between 20 percent and 30 percent higher for the 12 months to end-December from the previous year.

Headline earnings per share is the main profit gauge in South Africa and strips out certain one-off items.

Standard Bank last year completed the disposal of its controlling interest in its British unit, since renamed ICBC Standard Bank, to China’s ICBC, which also holds a 20 percent stake in the South African bank.

The previous year included the British unit’s loss of 3.7 billion rand which has narrowed substantially in the twelve months to end-2015, the company said.

Shares in Standard Bank were up 4.7 percent at 113.88 rand by 0748 GMT, compared to a 0.9 percent decline in the Johannesburg Securities Exchange’s Top-40 index.

 

(Reporting by TJ Strydom; Editing by James Macharia)

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Nigeria Sterling Bank says open to merger to build scale

20 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s Sterling Bank is open to merger or acquisition talks to build scale to counter weak market conditions caused by slow economic growth this year which could continue into 2016, its chief executive said.

Africa’s biggest economy relies on oil exports for about 58 percent of government revenue and faces its worst economic crisis in years because of the fall in crude prices, which tumbled to their lowest in more than six years last week.

CEO Yemi Adeola said late on Thursday the slowdown in the economy couple with currency weakness provided opportunities for a market consolidation to build scale and cut costs, adding that one or two foreign banks were having discussions about possible acquisitions in Nigeria.

“You could see … one or two international banks taking over one or two Nigerian banks … in 2016 from the look of things,” he said, declining to name the lenders.

“As for us at Sterling, we are always open, anything that will give us scale, we will pursue.”

Sterling Bank, which itself is the product of a merger of six local banks, was the target of a takeover in 2011 by South Africa’s No.2 banking group FirstRand. Acquisition talks collapsed after the two sides failed to agree on terms.

Shares in the bank, which have fallen 25.9 percent this year, are trading at less than 1 times its book value, analysts say. The stock shed 4.79 percent on Friday to 1.79 naira, giving it a market value of 51.5 billion naira ($259 million).

Adeola expects investment flows to reverse after the U.S. Federal Reserve raised interest rates this week for the first time in almost a decade, a move that could also hurt borrowers exposed to the dollar.

The naira, which is pegged to the dollar, has been hitting new lows among retail bureaux de change operators since last week with the central bank trying to curb demand to conserve its reserves, hurting commercial banks’ trade business.

Sterling Bank said on Thursday it would raise 35 billion naira ($177 million) in Tier II debt early next year to expand its loan book and saw no need to tap equity markets.

 

(By Oludare Mayowa. Writing by Chijioke Ohuocha; Editing by Mark Potter)

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Banks’ messaging system SWIFT’s growth in Middle East, Africa outpaces global rate

13 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Middle East

DUBAI (Reuters) – Growth in financial transactions messaging system SWIFT’s traffic volumes in the Middle East and Africa has accelerated by double-digit percentages this year as banks expand rapidly and non-financial institutions join the industry cooperative, said the regional head.

In the Middle East growth in the year up to the end of August was 12 percent, with double-digit expansion in Qatar and the United Arab Emirates helping offset a decline in Lebanon, Iraq and Libya, said Sido Bestani in an interview.

The data excludes Iran, which has been disconnected from the Belgium-based network since 2012 as a result of EU sanctions against the country.

Expansion in Africa in the past year was up 11 percent, led by Kenya, Ghana and Nigeria, Bestani said.

Average global SWIFT traffic growth so far this year is running at 10 percent. The Middle East and Africa represents more than 4 percent of total volumes, a level that should rise as both regions historically grow at a faster pace than the rest of the world.

Banks in the Middle East and Africa have been expanding both within and outside their borders in recent years. Through acquisitions, Qatar National Bank, the largest bank in the Gulf Arab region, has expanded into Egypt and several other African markets, while South Africa-based Standard Bank, Africa’s largest bank by assets, has built a presence in 20 countries including Nigeria, Angola and Mozambique.

In Africa, banks have been adding more clients in a country where the proportion of the population without a bank account totals as much as 80 percent in sub-Saharan Africa.

But Bestani said that drivers for business in the Middle East and Africa were different.

“We see more traction from some African communities,” said Bestani. “There is centralised decision-making, so for example the central bank of Ghana contacted us to ask if we can provide a service for complying with sanctions to all banks.

“In the Middle East we see less examples of supporting the community and more action at the level of individual banks and financial institutions.”

More non-financial institution companies are also joining. In the Middle East, around 50 such firms have joined, enabling them to handle cash management, trade and supply chain business through the system.

But SWIFT expects one of the main areas for future expansion to be the securities markets, where a lot of payments and settlement instructions are currently sent manually.

In the Middle East and Africa, including Turkey, payments represent 57 percent of information sent through SWIFT, with securities forming 30 percent of the total data. That compares with worldwide, where payments and securities roughly account for percent each of total data flow.

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