March 8, 2004

By Reuters

Johannesburg - Strong mortgage and credit card growth will be key features of Standard Bank's results when it reports this week, but analysts said they expected to see signs of margin pressure at this local market favourite.

"Standard Bank has been giving its competitors a bloody nose in terms of domestic earnings growth," said a local analyst, adding he would be keen to know how far this had translated into profits.

A median of seven forecasts from analysts put Standard Bank's headline earnings at R4.66 a share for the year to December 31 compared with R3.96 a year earlier - a gain of 18 percent.

Forecasts ranged from R4.54 to R4.70.

"It should be another solid, quality result," the analyst said of figures due on Wednesday.

While most big banks have enjoyed strong growth in advances thanks to falling interest rates, lower inflation and tax cuts that increased retail credit demand, analysts noted Standard Bank had been particularly strong in these two areas. 

Standard itself, however, has been keen to manage expectations over the results, which have topped those of its peers for the past few years.

Reporting a 22 percent jump in interim profit in August, the group - liked by analysts for its diverse earnings stream and strong management team - said it did not expect similar annual growth and was targeting the consumer price inflation index plus 10 basis points.

Standard said its caution was based in part on expectations that the international division, which enjoyed strong first-half earnings growth thanks to a recovery in international debt markets, would not maintain the same momentum.