JOHANNESBURG (miningweekly.com) – The Standard Bank is well positioned to weather the Covid-19 storm and remains determined to emerge from this crisis as a stronger Africa-focused financial services group, Standard Bank Group FD Dr Arno Daehnke said on Thursday.
The capital and liquidity levels of Africa’s biggest lender by assets remained above minimum regulatory requirements and above the bank’s internal risk appetite levels, Daehnke said.
Speaking during an investor call, he said that the group’s liquidity coverage ratio for the three months to March 31 was 142%, which is significantly higher than the regulatory minimum of 100%.
From April onwards, the South African Reserve Bank had proactively provided temporary relief to banks by reducing the liquidity coverage ratio requirements from 100% to 80%.
In April, issuance of bank paper improved and during May it largely returned to pre-Covid pricing levels.
As at April 30, Daehnke said that the group remained well capitalised and liquid and based on its scenario analysis, the group’s capital ratios were expected to remain strong and above required minimum levels.
In line with the Prudential Authority’s guidance on dividends, the group was not planning to declare a 2020 interim ordinary dividend and it was too early to comment on whether the group would declare a final ordinary dividend in March 2021.
The board would give this due consideration ahead of the release of the bank’s 2020 results in the first quarter of 2021.
“We are reviewing the group’s medium-term financial targets and will provide an update as and when we are able to do so,” Daehnke said.
As noted in the bank’s stock exchange news service announcement to shareholders on June 1, earnings for the six months to June 30 were expected be more than 20% lower than for the comparative period last year.
A further statement with more specific guidance ranges would follow, once there was reasonable certainty regarding the extent of the decline relative to the comparable period.
He said that Standard Bank's results for the six months ended June 30 were expected to be released on August 20.
He said that the group was confident that it had the governance and risk-management structures in place to support agile and effective decision-making.
A large percentage of the group’s employees across the continent and in the bank’s international offices continued to work productively from home, which would not have been possible without strategic partnerships and systems investments made in recent years.
Digital customer channels had also proven resilient.
“We're of the view that the diversity of our operations, the strength of our balance sheets and the depth of our skills position us well to weather this storm. Our strategy remains valid and intact and we remain determined to emerge from this crisis as a stronger Africa-focused financial services group,” Daehnke told the investor call in which Mining Weekly participated.