Standard Bank Group Ltd. said first-half profit rose 2 percent, sustained by business beyond South Africa’s borders as the economy there slumped.
Net income rose to 8.23 billion rand ($778 million) from 8.07 billion rand a year earlier, Africa’s largest lender said today in a statement. Earnings per share excluding one-time items rose 1.4 percent to 5.13 rand, while the bank increased its dividend 11 percent to 2.59 rand a share.
“Sluggishness in the South African economy is expected to persist for the remainder of 2014, which is likely to hamper domestic revenue growth and may affect the confidence of our customer base,” the Johannesburg-based bank said.
Other South African lenders, including Old Mutual Plc’s Nedbank, have said profit will be constrained this year as consumers struggle to repay loans. South Africa’s economy contracted in the first quarter for the first time since 2009 and inflation has accelerated as interest rates rise.
Income from continuing operations increased by 12 percent “due mainly to strong growth in the group’s rest of Africa subsidiaries,” Sim Tshabalala, joint chief executive officer, said in an e-mailed statement.
In July, Standard Bank said it had started legal proceedings in China over possible losses on about $210 million in aluminum, thought to be held in bonded warehouses in Shandong province. The bank cited evidence of a mismatch between amounts of the metal pledged in documents to various banks as collateral for loans.
“The impact of this on the group’s income statement has been estimated at 854 million rand and is reflected as a single line item on the income statement within discontinued operations,” Standard Bank said.
The stock fell as much as 2 percent and was trading 0.5 percent lower at 145.18 rand as of 9:21 a.m. in Johannesburg.