On 13 March 2025, Standard Banks released its FY24 results. Highlights from the results were as follows:

1. Net interest income increased by 3% to R101 billion.
   a) Average interest earning assets grew by 4%.
   b) Net interest margin decreased from 4.94% to 4.90%.
2. Non-interest revenue (NIR), including insurance and asset management, increased by 1% to R80 billion.
   a) Banking net fee and commission income (representing 40% of the total R80 billion) increased by 4% (11% in constant currency) due to client and volume growth combined with price increases.
   b) Combined net income from insurance and asset management had strong growth (+11%) benefiting from positive market movements while insurance also benefitted from 14% growth in new business value.
   c) Other gains and losses on financial instruments were a large detractor, with R1.7 billion decrease, impacted by assets being reclassified resulting in the related income being classified to net interest income in 2024.

Our research supports a buy recommendation.

PPC’s largest segment is South Africa and Botswana:
a) Price increases should continue to help improve margins.
b) Increased construction from lower interest rates, improvement in infrastructure and thematic themes such as urbanisation could potentially help with industry growth. Volumes could also further benefit from expansion projects such as the R3 billion cement plan in the Western Cape. Thanks to its premium cement, the company can safeguard its market share against competitors offering lower-quality products, especially where quality is a priority for customers.
c) However, volumes are going to remain under pressure as competition remains high and exacerbated by price increases.
d) The real opportunity lies in government intervention: government spend (infrastructure plan), import tariffs and SOE performance.
International (Zimbabwe): The company switched to hard currency; the dollar cleans up reporting with no more hyper-inflation items.

Our valuation has an upside of 6% which supports our hold view. We value the company on a discounted cash flow basis which takes into account dividends received in international business. A high discount rate was applied due to inflationary pressure in Zimbabwe and uncertainty relating to supply demand dynamics in the cement industry.

• On 4 March 2025, Nedbank released its FY24 results which were characterised by:
  1. Headline earnings increased 8% driven by non-interest revenue growth and lower impairments.
  2. Net interest income increased 1% driven by average interest-earning banking assets increasing 5%. The net interest margin decreased from 421 basis points to 405 basis points driven by competition for quality assets, squeeze in deposit spreads and a negative endowment mix impact.
  3. Non-interest revenue increased by 10% driven by net commission and fee income increasing by 10% and the prior year containing a non-repeatable R1 billion net monetary loss relating to Zimbabwe operations.
  4. Expenses increased by 8%, primarily due to staff costs increasing 7%, driven by an average annual increases of 6% and more expensive mix of employees.
  5. Impairments decreased by 17%, driven by an improving macroeconomic environment, the resolution of large counters in the wholesale portfolio, credit policy intervention and collections and origination efforts.

  Our research supports a buy recommendation.