By Lehlohonolo Lehana.
Standard Bank has denied manipulating the value of the rand and having any involvement in anticompetitive or criminal conduct, despite admitting fault before the Competition Tribunal and a follow-up statement issued by the National Treasury.
Treasury spelled out government’s concern regarding the admission of misconduct relating to the trading of rands and dollars.
Treasury said it views this matter in a serious light and that it welcomes the R42.7-million fine imposed on Standard Bank.
The bank has claimed that media and social media coverage has contained “false and inaccurate comments” related to the Competition Commission’s investigation into currency manipulation.
These comments incorrectly link various unrelated and unfounded allegations with the Competition Commission inquiry currently under adjudication before the Competition Appeal Court,” Standard Bank said in a statement.
Assertions that Standard Bank is not supportive of the interests of our customers, of South Africa’s economy and society and of the Constitution of South Africa are not consistent with how Standard Bank conducts itself,” the bank said, despite the tribunal’s findings.
However, Treasury said Standard Bank’s behaviour was precisely the type of abuse it had in mind in 2011 when proposing and implementing the Financial Sector Regulation Act (FSRA) as part of the Twin Peaks reform.
Meanwhile the bank says the growth of its credit impairment charges has slowed amidst the challenging economic environment.
In a trading update for the ten months ended 31 October 2023, banking revenue growth slowed but was still 20% higher period on period. This was due to continued strong net interest income and non-interest revenue growth.
“While higher average interest rates continued to support net interest margin, net interest margin expansion has slowed in recent months given that the interest rate increases seen in 2H22 are now embedded in the base,” the group said.
“Lower demand, reduced affordability, and competitive pricing pressure (particularly in mortgages in South Africa) resulted in lower disbursements to retail and business clients and a slowdown in growth in the related loan portfolios.”
“Corporate origination remained strong, driven by energy-related opportunities. Non-interest revenue growth was low-to-mid teens period on period, supported by ongoing client acquisition, higher transaction volumes, annual price increases, and continued volatility, which supported trading revenues.”
The group added that its credit impairment charges growth slowed even if it is still elevated due to balance sheet growth, sovereign risk migrations in African regions, provisions for South African corporates and the strain on consumers amid rapid interest rate increases.
The lender sees credit impairment charge growth moderating for the second half and its credit loss ratio for the year to stay within–but above the mid-point–of its through-the-cycle target range of 70 basis points to 100 basis points. Return on equity is seen within its 2025 target range of 17% to 20%, it added.
It said that its Africa regions unit contributed 44% to group headline earnings for the first 10 months of the year.
The group said that it will release its financial results for FY23 on 14 March 2024.