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Business Reporter
Leading financial services provider, Stanbic Bank, shrugged off the adverse effects of the Covid-19-induced lockdowns to post inflation adjusted profit after tax of $5,2 billion for the year ended December 31 2021, a 185 percent increase from $1,8 billion in the prior year.
The Standard Bank Group of South Africa’s subsidiary achieved a profit of $7,4 billion in historical terms, outpacing performance for the prior period of $3,2 billion.
In a statement accompanying the results, Stanbic Bank chairman, Gregory Sebborn, said the bank ended the year with a core capital of $11,3 billion, up from $3,8 billion in 2020.
This equates to US$103,7 million against the regulatory minimum of the local currency equivalent of US$30 million.
“The outlook remains somewhat uncertain due to currency instability, the Covid-19 pandemic and the growing inflationary pressures. However, the bank will continue to ensure that strategies are in place to mitigate the possible negative effects of these factors,” said Mr Sebborn.
Stanbic Bank chief executive, Solomon Nyanhongo, said the year 2021 was a difficult one due to the Covid-19 pandemic, following restrictions introduced in the first two months of the year to contain the disease as the number of infections soared.
However, the subsequent managed relaxation of lockdown conditions contributed positively to the recovery of the economy as most businesses were now able to operate with minimal disruptions, as the country’s vaccination level improved.
Mr Nyanhongo said this also contributed significantly to the bank’s positive performance, which saw the 2021 inflation adjusted net interest income surge by 206 percent from $2,7 billion in 2020 to $8,1 billion, largely underpinned by the improved growth in the bank’s average interest earning assets from $11,7 billion to $34,1 billion as new lending assets and financial investments were acquired.
The bank recorded a 72 percent increase in net fee and commission income, which increased from $4,2 billion in 2020 to $7,3 billion in 2021.
“The relaxation of the lockdown conditions led to the uplift in the volumes of transactions, which were passing through our various service channels. However, the persistent foreign currency shortages on the foreign currency market impacted negatively on the level of trading activity resulting in depressed trading revenue,.
The 2021 inflation adjusted credit impairments improved from $1,2 billion in the prior period to $320 million, largely supported by the strong recoveries that were recorded during the period on the bank’s financial assets.
Mr Nyanhongo said Stanbic’s inflation adjusted operating expenses grew by 3 percent from $8,6 billion in 2020 to $8,9 billion.
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