Financial services provider Standard Bank has attributed its strong performance in the first half of the year, including a 35% growth in headline earnings, to its differentiated franchise and Africa-focused strategy.

The group posted headline earnings of R21.2-billion for the six months ended June 30, compared with restated headline earnings of R15.6-billion for the six months ended June 30, 2022.

Standard bank had to restate its prior year financial figures following the introduction of the IFRS 17 Insurance Contracts in January this year, which was applied retrospectively to its 2022 financials.

Restated headline earnings for the full 2022 financial year came to R33.8-billion.

Meanwhile, total income of R87-billion for the reporting period compares with total income of R67.7-billion in the prior comparable period.

In the six months under review, Standard Bank delivered a return on equity of 18.9%, compared with a return on equity of 15.7% for the prior comparable period.

The bank says this performance is underpinned by robust earnings growth across it three banking businesses and improved earnings in its insurance and asset management businesses.

The group’s net asset value grew by 10% in the reporting period, ending the half-year with a common equity tier one ratio of 13.4%, on par with that of December 2022.

Standard Bank’s board therefore approved an interim dividend of 690c, which equates to a dividend payout ratio of 54%. This compares with a 515c apiece dividend declared for the prior corresponding six months.

Meanwhile, Standard Bank reports that its banking businesses benefitted from continued client franchise growth in the six months under review, as well as larger balance sheets and increased transaction volumes. Certain market and interest rate tailwinds also supported income growth for the group.

The bank elaborates that its revenue growth was well ahead of cost growth, which supported strong positive operating leverage and a decline in the cost-to-income ratio to 50.5% in the reporting period.

Credit impairment charges increased across all portfolios, which Standard Bank says reflects the difficult macroeconomic environment and the deteriorating outlook, as well as client-specific strain.

The credit loss ratio of the group increased to 97 basis point, which is at the upper end of the group’s through-the-cycle range of 70 to 100 basis points.

Banking operations recorded headline earnings growth of 42% year-on-year to R18.7-billion, while return on equity improved to 19%, from 15.3% in the prior comparable period.

The insurance and asset management business unit, which now combines the businesses previously housed in Liberty Holdings with the other insurance and asset management businesses in the group, recorded improved operational performance and headline earnings of R1.4-billion.

This compares with headline earnings of R1.1-billion generated in the six months ended June 30, 2022.

The life insurance operations reported increases in indexed new premiums, while the short-term insurance business recorded increased gross written premiums.

Standard Bank’s assets under management grew by 6% year-on-year to R1.4-trillion, which mostly comprise pensions.

Notably, the South African banking franchise’s headline earnings grew by 17% to R8.4-billion for the six months under review, while return on equity improved to 15.2%, from 13.7% in the prior comparable period.