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Standard Bank said first-half profit rose 4% as higher income from its operations outside of South Africa helped compensate for slower economic growth in its home market.
Net income in the six months through June climbed to R13.2bn, the Johannesburg-based lender said in a statement. Earnings excluding one-time items climbed 6% to R13.4bn, while revenue grew faster than expenses for the first time in three years.
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Revenue at South African banks is being squeezed by an economy that has shrunk for three of the five past quarters. For Standard Bank, the continent’s largest lender, this has meant relying on its businesses in 20 other sub-Saharan countries to lift its prospects.
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The bank, 20% owned by Industrial and Commercial Bank of China, is also eyeing a bigger slice of bilateral trade of about $147 billion a year between the continent and China.
Standard Bank has also concentrated on trying to keep costs low and digitising operations with competition in its home market intensifying from established and new players. The bank has closed 98 branches in South Africa and reduced the floor space its branches take up by 16% during the first half.
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It may cut 200 staff in Kenya as it implements more digital reforms. Standard Bank is in the process of developing a policy on lending to coal-mining operations and has adopted a coal-fired finance policy as pressure mounts on banks to shun coal funding in favour of renewable energy projects.
Standard Bank’s shares rose as much as 2.1% before paring gains to trade 1.5% up at R173.55 as of 09:18 in Johannesburg. The stock has declined 3.1% this year, compared with a 7.7% drop in the six-member FTSE/JSE Africa Banks Index.