March 5 (Bloomberg) -- Standard Bank Group Ltd., Africa’s largest bank, said that repeating its 2008 profit for this year would be “acceptable,” as a global recession and a surge in bad-loan impairments slow earnings.

“The board considers that producing similar results in 2009 to those achieved in 2008 would be an acceptable outcome,” Johannesburg-based Standard said in a statement today. After missing financial targets for 2008, the lender won’t publish objectives for 2009, it added.

Net income advanced 2 percent to 13.93 billion rand ($1.33 billion) in the 12 months ended Dec. 31, Johannesburg-based Standard Bank said in a statement to the city’s stock exchange today. Bad loans as a percentage of credit increased to 1.55 percent, above its 1 percent target.

Consumer-loan defaults at Standard and rivals including Barclays Plc’s Absa Group Ltd. have soared after South Africa’s central bank raised its benchmark rate six times to 12 percent in the year through June 2008. The global credit crunch last year slowed earnings from Standard’s operations across 18 African nations and another 20 mostly emerging-market economies.

Standard’s shares rose 3.7 percent to 62.39 rand giving the lender a market value of 95 billion rand.

The lender will continue to seek acquisitions in emerging economies, targeting Russia and Brazil as the most “critical” of the markets for expansion, Chief Executive Jacko Maree said in an interview. It will also look for further opportunities in Nigeria, Angola, Ghana and Kenya.

‘Fire sales Prices’

Standard Bank has studied the financial records “of a number” of Russian companies, though it is not close to completing a deal, Maree said. He declined comment on a Jan. 28 report that Standard may buy 30 percent of Troika Dialog.

“There are great potential acquisitions to be made as prices have come down massively and institutions that have broken balance sheets sell off assets at fire sale prices,” said Neville Chester, who helps manage the equivalent of $12 billion at Coronation Fund Managers Ltd. in Cape Town.

Standard Bank, which last year sold a 20 percent stake to Industrial & Commercial Bank of China Ltd., missed its 2008 target of making a $40 million to $60 million profit from cooperating on deals with the Chinese lender, making $8 million.

The lender may reach $50 million in profit from ICBC deals this year, Maree said. ICBC and Standard Bank, which has 30 staff in Beijing, are working on transactions with at least 80 Chinese companies seeking more business in Africa, he said.

‘Prudent Move’

Standard Bank will offer investors the option to take additional shares instead of a cash payout for fiscal 2008 to help “incrementally raise capital,” it said. “Asset growth is continuing and alternate sources of capital are currently limited,” it added.

The offer is “a prudent move” for funding growth, said Patrice Rassou, a Cape Town-based money manager at Sanlam Investment Management, which manages the equivalent of $24 billion.

Standard today said the company’s international and corporate and investment banking units had compensated for a drop in retail bank profits where bad loan impairments more than doubled.

Bonuses will be cut, especially at Standard Bank’s retail unit, because the lender didn’t move quickly enough to tighten credit criteria, said Maree, who earned a 13.1 million-rand performance bonus in 2007.

“The pain has been felt,” he added, declining to give figures on bonuses. His own bonus will also drop, he said, which is “right in these circumstances.”

To contact the reporter on this story: Vernon Wessels in Johannesburg at vwessels@bloomberg.net; Renée Bonorchis in Johannesburg at rbonorchis@bloomberg.net.

Last Updated: March 5, 2009 10:28 EST