Standard Bank suffered a tough 2009 as their corporate and investment banking divisions report a growth in revenue, but significantly high credit losses.
However, the bank is keen to reaffirm its commitment to emerging markets.
Jacko Maree, Standard Bank Group chief executive, says: “It was an extremely tough year, but one in which our focus on developing markets stood us in good stead. Our resilience confirms that the group is strategically well placed. Our vision, to be a leading emerging markets financial services organisation, remains unchanged.”
As the impact of the crisis in the credit markets spread into emerging markets, investment banking experienced a number of problems attributable to credit impairments rising substantially due to higher impairments for non-performing loans across all regions, which at year end attributed to 6.2% of the total, up 2.8% on 2008.
Standard Bank’s activities in Africa were negatively affected by the sharp decline in commodity prices, which was particularly damaging as many African economies rely on commodity exports as their primary source of export revenue.
The tightening of global credit as a result of the recession also led to a reduction in private investment flows and bank financing, leading to reduced capital flows and a restriction on the availability of trade finance.
The mining and manufacturing sectors were hardest hit when, in the final quarter of 2008, South Africa entered its first recession in 17 years.
It was not until the third quarter of 2009 that the economy began to emerge tentatively from the recession, recording a contraction in GDP of 1.8%
Asia’s emerging markets are forecast to boost Africa’s economic growth rate due to trade ties between developing economies, however, South Africa’s return to trend growth is likely to lag behind its emerging market peers.
Last Updated March 04, 2010
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