Standard Bank announced that it had disbursed double-digit loans to its corporate customers in the first four months of 2021. Loans for home loans, vehicle and property finance also increased.
- Standard Bank released a trading update for the first four months of 2021.
- Business loans, home loans, vehicle and property finance loans all increased.
- Despite the growth in lending, Standard Bank said its lending performance was better than expected.
Standard Bank continues its growth phase of lending in the new year. The bank saw double-digit growth in loans paid out to its business customers in the first four months of 2021.
In a pre-closing trade update released on Monday, Standard Bank also announced that new mortgage, vehicle and asset finance loans were well above their late April 2020 levels. In addition, business in the rest of Africa also showed higher growth in personal loan volumes compared to the same period in 2020.
In 2020, Standard Bank and Absa added high single- or double-digit new loans to customers on certain products when their peers saw slight growth or decline. Mortgage payments in Standard Bank’s personal and business banking unit also hit record levels as demand was strong due to decades of low interest rates.
Standard Bank – the largest lender in Africa – continues to pride itself on being a credit bank, especially for home loans, even in the face of the current volatility and uncertainty caused by the pandemic.
Nevertheless, the bad debt losses are still below target. Standard Bank said its credit loss rate (which measures bad debt as a percentage of total credit) was slightly below the top of the group’s target range of 70 to 100 basis points by the end of April. However, the loan default rate was still higher than in the first four months of 2019.
Loan performance in the first four months of this year was better than expected, and loan impairment losses were significantly lower than in the first four months of 2020.
In terms of interest earned on loans, Standard Bank said that its net interest income declined in the four months ended April 30, 2021 due to record-low mid-single-digit interest rates. Net interest income remained unchanged after adjusting for currency effects and was in the low single-digit range compared to the level before the pandemic in April 2019.
Standard Bank’s interest-free income, generated through banking fees and other service fees, also declined in the high single digits.
The bank will publish its financial results for the first half of 2021 on August 19, 2021.