Standard Bank says it mobilised over R50 billion of sustainable finance for corporate clients and provided over R2 billion in loans to SMEs to help business owners access affordable and reliable alternative energy products in 2023.
In addition, the group said it disbursed over R145 million to homeowners and over R840 million to businesses for solar installations in South Africa. It launched low-interest Solar Loan solutions for homes and business some six months ago.
“The headline feature of the Home Solar Loan is the offering of a personalised interest rate capped at a maximum of prime plus 2.5%. This is a substantial discount on the prime plus 17.5% maximum stipulated by the National Credit Act and even the average prime plus 7% interest rate offered on personal loans,” said Andrew van der Hoven, head of digital and eCommerce in September 2023, upon launch of the product. He said that an additional benefit is the flexible repayment term up to 5 years.
Group chief executive officer, Sim Tshabalala, pointed to a strong performance for the fianncial services company in 2023, with earnings up 27% and a return on equity of 18.8%. The bank saw growth in its franchise and across all business sectors.
Key financials for FY23 include headline earnings of R42.9 billion, a 27% increase from FY22, and a return on equity of 18.8%.
The bank saw a 6% rise in active customers to 18.8 million, with digital retail clients in South Africa increasing by 8%.
The group approved a final dividend of 733 cents per share, resulting in a 55% dividend payout ratio for FY23.
Elevated interest and inflation rates curbed credit demand as client affordability reduced and consumer confidence declined. On the back of lower demand, disbursements reduced against the prior year albeit off a high base. Overall, loans and advances growth was muted at 2%.
The South African franchise reported headline earnings of R7 093 million, 6% lower than 2022 with an ROE of 19.1%.
Balance sheet growth, together with the positive endowment impact in a higher average interest rate environment, supported net interest income growth of 9% to R27 603 million.
This was partially offset by pricing pressure linked to increased competition, particularly in Home services, the lender said. Elevated non-performing loans and higher funding costs further moderated growth.
Credit impairment charges increased by 32% to R9 976 million, largely due to consumer strain linked to the elevated interest and inflationary environment, increased non-performing loans and the non-recurrence of prior year’s recoveries in the payment holiday portfolio.
Looking ahead to 2024, global risks persist, but the IMF forecasts a soft landing. Inflation is expected to decrease, allowing for potential interest rate cuts. Sub-Saharan Africa's GDP growth is anticipated to accelerate, although interest rate outlooks vary by market.
In South Africa, inflation is expected to decline, with a repo rate decrease to 7.50% by year-end. Actions to address electricity and logistics constraints should support a GDP growth improvement to 1.2% in 2024.
Shares in group are up 17.5% over the past year.
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