(Bloomberg) — Standard Bank Group Ltd., Africa’s biggest bank by assets, reported a record pretax profit in the first half of 2023, driven by a recovery in sub-Saharan economies that helped the lender shake off the gloomy outlook in its home market of South Africa.

Profit attributable to ordinary shareholders climbed 36% to 21.9 billion rand ($1.1 billion) for the six months through June, fueled by gains in Ghana, Kenya, Mozambique, Nigeria, Uganda and Zimbabwe, the Johannesburg-based firm said Thursday. The Africa Regions franchise headline earnings jumped by 65%, accounting for 44% of the group’s performance.

“In Sub-Saharan Africa, most economies are resilient and dynamic; the risk of sovereign debt restructuring this year has reduced considerably,” Chief Executive Officer Sim Tshabalala said in an investor briefing. Currency reforms in Nigeria, although negative for inflation in the short term, is promising for growth and investment in the long term, he added.

In its home market, inflation and interest-rate pressures — exacerbated by slow reforms, poor service delivery, increased power outages and logistics disruptions — have weighed on the performance, Tshabalala said in a separate statement. Borrowing costs in South Africa have risen 450 basis points since the start of 2022, placing considerable pressure on consumers and businesses.

Still, headline earnings climbed 17% at Standard Bank’s South African home market.

Standard Bank dropped as much as 1.9%, before paring losses to 0.8% as of 12:25 p.m. in Johannesburg. Peers on the FTSE/JSE banks index declined 0.9%.

Other highlights from the earnings statement:

• Proposes an interim dividend of 6.9 rand per share
• Credit impairment charges rose 42% to 8.4 billion rand
• Credit loss ratio increased to 97 basis points; it’s expected to remain in the upper half of the group’s through-the-cycle target range of 70-100 basis points for the rest of the year
• Lender sees revenue growth to remain stronger than cost growth, even as the positive endowment generated by rising interest rates fades with the peaking of the interest-rate cycle.
• Bank has implemented a partial endowment hedge, and subsequently has cut its net interest income impact for any 100 basis point rate reduction to 1.2 billion rand, from 1.4 billion rand earlier.

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