What do you make of the Standard Bank outlook from their AGM yesterday? Puts a bit of a dampener on matters not so? Let us extract a few key lines from the Jacko Maree prepared statement:
"Improvements in credit impairment charges were encouraging during the first four months of the year across personal, business and corporate lending. Despite the absence of material new impairments within Corporate & Investment Banking in the period, corporate default risk remains relatively high."
Hmmmm... and then this one, right at the beginning: "For the four-month period to 30 April 2010, normalised headline earnings for the group grew by 7%. This result reflects a tough environment for revenue growth in banking activities with both net interest income and non-interest revenue lower than in the previous year, and a much improved performance from our insurance subsidiary, Liberty Holdings Limited (Liberty). Lower than expected interest rates in South Africa have put increased pressure on interest margins but have somewhat helped to ease the financial stress of households. The translation effect of a stronger rand exchange rate has had a negative impact on the group's earnings." So, in short you can summarize that the environment is still tough, but again the worst is past us and has stabilized. Perhaps bad debts have peaked.