Standard Bank, Africa’s largest bank, witnessed an unexpected increase in its share price after a serious slump in the first half of the year.
Standard Bank, told the media, “Despite considerable effort, the pandemic appears to be gaining momentum in certain of the markets in which the group operates on the continent, particularly in South Africa.”
It is reported that the bank’s earnings per share fell by 30 percent between January and June as compared to 50 percent from a year earlier. Now the stock prices have surged by 4.4 percent which have startled many investors in the country.
According to Charles Russell, a Citigroup analyst, the credit impairments are limited to a number slightly larger than the global financial crisis. Therefore, some investors are expected to gain a sense of relief over the matter.
Furthermore, earnings for the first half of the year will be revealed by Standard Bank in the fourth week of August. Other banks such as FirstRand will report their earnings in September.
Even Nedbank Group is expecting a drop in its interim profit by 20 percent. In addition, the first six months earnings of Capitec Bank has dropped by 70 percent.
Since the Covid-19 outbreak, most of the banks and other financial institutions in South Africa are scrambling to boost earnings. Many of them have recorded the worst earnings slump since World War II, but now they are preparing to face the worst as the South African government is taking stringent measures to prevent the economy from entering recession.