Standard Bank, which owns 40 percent of the joint venture with China’s ICBC, said it might need to pump about $80 million (1.1 billion rand) into ICBC Standard Bank in the next 12 to18 months.
ICBC Standard Bank, which is Africa’s largest lender by assets, said it recorded a loss of $14.9 million in the year ended December, as declining emerging market risk appetite and flows dented the trading business.
Standard Bank noted that its share of those losses equated to 74 million rand.
Standard Bank said “ICBC Standard Bank’s ability to deliver sustainable profits is dependent on its ability to continue to integrate into, and leverage, ICBC’s extensive client base”.
Standard Bank noted that while the joint venture did not need additional capital in 2018, its business plan will probably required a capital injection of about $200 million in the next 12 to 18 months. The bank said its share of that would be $80 million.
As a result of growth in the retail banking unit, Standard Bank revealed that its headline earnings in the year ended December rose 6 percent to 27.9 billion rand.
According to Standard Bank, “non-interest revenue continued to record strong growth, driven by retail banking”. However the lender said net interest income growth was “dampened”, and credit impairment charges were lower as a result of new accounting standards.
Standard Bank said its return on equity improved from 17.2 percent to 18 percent. It increased its total dividend for the year by 7 percent to 9.70 rand a share.