Standard Bank Group Limited (SBK) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining the Standard Bank Group preclose call this afternoon. My name is Sarah Rivett-Carnac, and I'll be managing the call this afternoon. As you will be aware, we issued a voluntary earning update on SENS this morning. The purpose of this call is to cover the highlights of that announcement, and then we will open for Q&A. On the call today, we have Arno Daehnke, the Standard Bank Group Finance Director; Brooks Mparutsa, Barbara Bell and Thembelihle Ngema, the client segment CFO. I will now hand over to Arno. Thank you on over to you.

Thank you, Sarah. And good afternoon, and thank you for joining us this afternoon. Starting with the macro environment and particularly how things have evolved since we released our results in August. Since reporting in August 2022 sustained elevated inflation globally has prompted further monetary tightening between August 2022 and October 2022, interest rates increased in all our markets operation, except Angola and Zambia. In Angola, interest rates declined by 50 basis points since September 2022. And in Zambia, interest rates were flat. In addition, Ghana has experienced some sovereign spreads. The [ Kanan City has ] declined by over 50% relative to the South African rand year-to-date and inflation has spiked. In South Africa, inflation ticked up over the course of the first 6 months. It is broadly considered to have peaked in July at 7.8%. Inflation has moderated slightly to 7.6% in October. And Standard Bank Research expects inflation to average 6.9% for 2022. The South African Reserve Bank's Monetary Policy Committee decided at its November meeting to increase the repo rate by 75 basis points to 7%. This is the third consecutive 75 basis point increase. This takes the cumulative year-to-date increases to 325 basis points. It was interesting to note that the members voting changed from 3 to 2 was 75 basis points and 100 basis points in September to 322 or 75 basis points and 50 basis points in November. While the governor highlighted ongoing inflationary risks to the downside. We expect interest rate increases to be limited from here on. At this stage, Standard Bank Research expects a further 25 basis points in January 2023. From a currency perspective, on average, over the 10-month period, the South African rand has been weaker relative to the group's baskets of currencies. This has favorably impacted the group's reported earnings growth year-to-date. Turning to our performance and trends for the 10 months through the end of October this year. Starting with revenue. In the 10 months to 31st of October 2022, relative to the 10 months to 31st October 2021, and robust average balance sheet growth, combined with positive endowment tailwinds from higher average interest rates resulted in strong double-digit net interest income growth period-on-period. All 3 client segments recorded growth in average loans and advances year-on-year. Noninterest revenue growth remained robust, supported by growth in transactional activity trading revenue and insurance earnings. Transactional fee growth benefited from fee increases, combined with a larger client base. Trading revenue growth was still double digits, but slowed relative to the 21% increase in the first half of the year. I remind you that the second half of 2021 was a record performance setting a higher base. Insurance earnings growth was underpinned by higher fees, mainly due to annual fee increases, continued good funeral policy performance, and lower credit life claims compared to the prior period. Moving to costs. Cost growth was higher than expected. Driven by higher inflation and higher levels of activity, particularly in Africa regions. Despite upward pressure, cost growth was contained below the group's weighted average rate of inflation. And the group continued to record strong positive draws. With regards to credit, Group credit impairment charges increased period-on-period, influenced by the low base in the second half of last year. The consumer high net worth portfolio continued to benefit for better collections and the ongoing normalization of previous payments Holiday portfolios. This was partially offset by the increased impairment charges from new business strain as well as pockets of customer strain. The business and commercial client segments, credit impairment charges were broadly flat. Credit charges in South Africa declined as previous -- as provisions raised on the COVID guarantee lending in the prior year did not repeat. Charges in Africa regions increased period-on-period, driven by new book growth and lower write-off recoveries in the current year. Corporate and Investment Banking credit charges continued to normalize, with additional provisions raised due to portfolio growth, internal rating downgrades, and client-specific provisions. The group remains well provided and can weather an uptick in delinquencies. Turning to Liberty. Pleasingly, Liberty's earnings continue to recover as the pandemic impact waned, and Liberty remains well capitalized. The Liberty integration is going well, and we remain confident we will deliver the ZAR 600 million revenue synergies as well as the capital synergies previously outlined. We are taking actions to reduce Liberty solvency capital requirement cover ratio to within its new target range. For reference, the new target range was revised down in August this year from 1.5x to 2x to 1.3x to 1.7x. On ICBC Standard Bank plc, this entity continued to report a positive operational performance for the 10 months of 2022. The improved performance in Liberty, combined with the insurance settlement received by ICBCS in January 2022, boosted group earnings growth to above that recorded at the Standard Bank activities level. Year-to-date, the group's return on equity remained above the group's cost of equity and improved relative to the ROE of 15.3% reported in the first half of this year. As noted in our Pillar 3 report released last Friday, the group's common equity Tier 1 ratio as of 30th of September 2022 remained robust at 13.2%. Turning to our guidance for 2022. We expect 2022 total income growth and cost growth to be higher than guided in August 2022. This is largely due to faster than expected increases in interest rates higher inflation rates. We expect continued positive jaws for the year. The group's credit loss ratio is expected to remain in the lower half of the groups through the cycle target range of 70 to 100 basis points. And we will provide guidance for 2023 when we report in March next year. Lastly, while there are some clouds on the horizon in terms of slowing growth, the group continues to benefit on the strong momentum across all its businesses, and geographies. And we remain confident that we are on track to deliver against the targets we committed to at our strategy update in August 2021. More specifically, these targets include over the 4-year period to 2025, a revenue CAGR of 7% to 9% over the 4-year period. A cost-to-income ratio approaching 50% by 2025 and a return on equity in our target range of 17% to 20%. Thank you, Sarah. Back to you.

We will now move to questions. Chris, can I hand over to you to manage the questions. Thank you.

[Operator Instructions] Our first question is from James Starke of RMB Morgan Stanley.

Two questions from me, please. Just as we're looking to dividends and year-end, I mean, how are you thinking about the payout ratio? I mean has it changed since you last updated the market at prospects -- do you think there's of elevated capital return? The second question just relates to costs and your cost guidance. I just note you haven't reemphasized the 4% to 5% CAGR cost guidance to 2025. Can you just give us some sense on how you're thinking about longer-term cost evolution at this point? And I mean is that previous guidance still valid from a cost perspective?

Yes. Thanks, James. I could hear from you on dividends. So we have a payout range, which we've guided to the market of between 45% and 60% payout range. For the second half of this year, the dividends will be at the upper end of that payout range towards the upper end of the payout range. On cost guidance, yes. Look, historically, we've managed our costs below inflation, and we remain confident we can do that. When we gave that 4% to 5% range, I think we certainly do not expect inflation to run at such high levels. For your information, the weighted average inflation for the group weighted by cost base is currently 14%, 14%. And our cost growth is currently tracking below that have to be below that, but clearly, it's much higher than 4% to 5%. So we're missing that target for this year. In the longer term, as inflation rates may normalize, we at sort of track back to mid- to higher single-digit cost growth. But below inflation is an important parameter to think about here.

The next question is from Londiwe Buthelezi of Fin24.

Good afternoon. Thank you for the presentation. Just would increase by 1 entry in the trading update where you talk about pockets of consumer more on.

Sorry, Londiwe, your line is very, very bad. Can we ask it to just please disconnect and retry? We could not understand the word you were saying. Could you please disconnect and retry. I will, in the meantime, move on to the next question from Ross Krige of Investec.

Good afternoon. Thanks, everyone. A couple of questions from me. Just on the OpEx line, just to get an understand split between South Africa and Africa regions, if you could maybe just elaborate on that. And again, I guess to an earlier question on your longer-term forecast, do you think -- I mean, do you think this is a prolonged period of elevated inflation. And it sounds like you're still confident that you can reduce that certainly below what you expect top line to grow at on a view to 2025? Just maybe any comments on that? And then on asset quality in the consumer high-net-worth segment, you talked about pockets of consumer strength. Hoping you could just elaborate a bit on that, what product segments you're seeing that? And maybe just talk about the differences between the secured and unsecured portfolio. And sorry, finally, just on Liberty, if you could just elaborate on how much the improved claims expense has impacted that performance. And maybe just give a bit of data on underlying performance on new business and volumes and margins.

Yes. Thanks, Ross. I'll take 3 other questions and hand over to [indiscernible] for the consumer credit question. Yes, if you can take it just now. On OpEx, okay. So cost growth in South Africa is much lower than in Africa regions, obviously, on the back of inflation being much lower and not far off our previous targets we had of mid-single-digit cost growth in South Africa. So the much -- the higher cost growth for the group is really coming from Africa regions where we are facing higher inflationary pressures. But in both instances, our cost growth is below inflation, both in South Africa as well in Africa regions. That's the trend. In the longer term, we've just finished our planning cycle for next year, and obviously, we're giving guidance on that now, but we are seeing a reversal of inflation rates and our cost growth next year should be lower than what we've seen in 2022. For 2023, certainly some recovery in inflation dropping off and that's filtering into better cost management and cost growth. On Liberty, our continued pressure under margins is evident so that's something we're obviously very focused on. There's various interventions in place to continue to drive value of new business as well as manage the costs and ensure positive jaws in Liberty and then improve our margins on that -- and we have confidence that these various initiatives, technology-wise, products were salesforce-wise, including optimizing the sales teams between the bank actually and the Liberty tied and independent sales agents will drive higher value of new business, improved margins, improved ROE. And I mean that all forms part of the business case. And I mentioned the point early on that we do see ZAR 600 million per annum synergies at year 3 of integration to be achievable. And just on all of those synergies and the business case realization coming together, we plan to give a more comprehensive update when we release our results in March next year. Yes, I think I've covered OpEx, AR versus SA longer term, I've covered that at Liberty. I think hopefully, that answers your questions there. Lihle, if you want to deal with credit charges in consumer over to you?

Yes. Thanks, Arno. Maybe a couple of points from a consumer highness perspective. So what was evidenced in the last couple of months has really been some clients short paying. So we're actually seeing just increased millers. So some clients remaining in certain states. We also -- I think what we've really been tracking quite closely, also seen debt review, find going into derive also increase. But from a portfolio perspective, I think maybe the strain that we've noted has been mostly within the Web portfolio. We do see that portfolio quite sensitive to the interest rate hikes. We have implemented quite a lot of mitigation across the various portfolios, whether it's execution of [ E&S ] within the home loan portfolio, debt sales. So overall, at a portfolio level, we're still comfortable to be within the -- through the range at a portfolio level. I hope that, yes. So I hope that helps from an overall perspective.

Then our next question is from Londiwe Buthelezi from Fin24.

I hope that you can hear me fair enough. And I'm afraid I'm going to have to take you back to the question of pockets of consumer strain. I just rejoined now as you are addressing it and I just missed out on the response to that. But I wondered if you can give us just a little bit more color on which consumer segment and how bad the strain is? And in terms of figures, how many more -- how much delinquencies you've seen so far? And then the second question has to do with the updates on the activation of MIMO accounts, I thought that we were going to get a bit of update on the investigation out of this call. How fast the net bank is with that and how many people have been suspended now because the last time we spoke to SIM, we said although the suspension numbers, but there were many more people that were still being investigated. I just an update there.

Yes. Thanks, Londiwe And then I'll hand over again to Lihle. Lihle, you can just update us, again, please, on the consumer point. So on MIMO, obviously, we take this matter very seriously in fact, we just come to a board cycle where we discussed this in detail. We've found a very thorough investigation on this independently outsetting investigation. People have been found having conducted themselves in an inappropriate manner and actually is being taken against those people. This investigation is now nearing conclusion. and it hasn't been quite concluded yet. So I like to just pause on that point and then we'll update the markets through the appropriate channels once that's been completely concluded on that. And then I can give you we can formally release the final numbers and everything like that. So we'd prefer to do it like that. I say internally, we've done a conduct culture review. We continue to assess all sales up incentives, sales activity and what's driving that activity. And we haven't found any significant issues in outside an investigation, not so one, that's outside in. But we have found some areas where we can make improvements to make really sure this never happens again. So, if I can just ask you to leave it at that and then we'll update the markets in the near term once we've had all of the work completely done, and then you can have a comprehensive view on this. That's okay. You said Okay. Great. Yes. Lihle, if I can just take you back to the consumer credit question and then let and add some color.

So Londiwe, maybe let me start here, just to add a little bit more to what I said earlier. I think the first thing is -- just in terms of how we've lent throughout the cycle, we really have not lent into -- from -- in terms of our risk aside, we haven't really [ lengthened ] to low income. So I think that's the one piece. Our coverage in the cycle has been much higher. So we've had -- we are currently running the coverage of overpaid have seen into versus to 2019, we're running at like 4%. So that's the one piece. So where we are seeing some pressure in the portfolio right now, is really you do get some clients, and it really is a pocket. So we haven't seen like a complete lower, but consumers are under pressure. And therefore, you do get pockets where consumers are short tank. So we're finding just Miller's clients milling in one state, where we are able to, we do restructure some of those accounts. But I think the other one that is an indicator for us of clients being under pressure is the attribute. So we have seen the attribute portfolio growth from where we were last year. And then the portfolio that's worth mentioning is where we have seen pressure, and we do see that the portfolio being quite sensitive to the interest rate increases has been within the VA portfolio. So that we have seen pressure in that portfolio, in particular, relative to where we were in the prior year. But overall, at a consumer highest high net worth level, we are pretty much flat to last year from an overall impairment perspective, and we're quite comfortable within a through the cycle range.

The next question is from Chris Steward of Ninety One.

Yes. Good afternoon, one. Thank you very much for making available this afternoon. Just one quick question from my side, if I may. Can you just give a comment on the ability to expand your capital out of your -- many of your African subsidiaries. And I guess, therefore, given that in the absence of the ability to do that, a lot of the heavy lifting on the group dividend has to come from SBSA where capital levels are slightly less significantly above where you'd like them to be, then the balance of the group, if there were to be long-term issues with regard to expatriation of profits from some of the African subsidiaries, do you foresee that at any stage in the future sort of impacting your guidance as to where you'd like the dividend payout ratio to end up, please.

Thanks, Chris. Actually, we find increasing amount of capital, by means of dividends being able to extract out of Africa regions and we continue to actually attract a sizable portion of the group's dividend coming from Africa regions. Obviously, SBSA makes up the shortfall and other companies also into that. There are 2 entities currently, Chris, which are constrained, only 2, and that's Nigeria and you know about that and Ghana. On Nigeria, we updated you in August on that. There are constraints, FX constraints, and we continue to work with authorities to extract that capital. We managed to extract a little bit of capital or have a little bit of a dividend being paid to us declared by project paid dividend. And currently, as we speak, we are working with the Central Bank on extracting the rest of it. So that's on Nigeria. Obviously, we are so conscious that the elections are imminent there, and we do hope that some of the market constraints, which our current governor has put in place will be reducing going forward. But I hope to come back in March with better news that some of the capital has been extracted there. On Ghana, that's obviously quite a unique situation there. We own the Ghanaian sovereignty is under quite a bit of stress and there is some capital locked up there, which we previously haven't had any constraints in terms of dividend payments that is currently as the Ghanaian entity goes through with the Ghanaian entity goes through some of the restructuring initiated by the IMF, obviously, we expect some short-term constraints there. And Chris, on all other entities, including entities like Angola, Mozambique and Zimbabwe, some of the more difficult entities, we've been able to pay dividends as the full view and the cash lands in our bank accounts and is able to paying out to our shareholders. Going forward I see us remaining comfortable with the 45% to 60% payout range. I would like to say at the top end towards the top end of the payout range. And at this stage, I don't see any point or any reason to alerts our investors and shareholders that we will not be able to do that.

Are you at liberty to disclose the rate at which you are able to expatriate capital from Nigeria?

The small portion we've managed to extract was at the official exchange rate, which is still at 400 to 450 direct to the dollar.

The next question comes from Charles Russell of SBG Securities.

just 2 questions, please. On the Africa regions, you've commented that there is a currency tailwind because of the weaker rand. Can you comment on the underlying operational performance of the portfolio and at either 10 months or 9 months? And then in this 10-month update, you didn't include any guidance on where overall earnings lands up you did at the 9-month update. I think as I remember correctly, it was 42% on earnings, 38% on headline earnings. Has there been much of a change in that trend since the 9-month update?

Okay. I mean, on Africa regions, the tailwind is obviously due to the relatively weaker rand compared to foreign currency, so there's translation benefits. If we look at the constant currency numbers I have in front of you here, it's still a very strong performance from Africa region. And it's strong across South and Central Africa, particularly East Africa, particularly also in Western across all of our markets and all of our entities remain profitable on a constant currency basis. So that's the one point. So sorry, I should have written it down. Your second question was on just on the guidance that the overall earnings level versus. Yes, I think the earnings momentum stays intact. Obviously, we don't -- we can't guide to earnings closely at this point in time. But overall momentum remains intact, and we're pleased how the group is developing. So yes, continued good momentum, but we did have a very strong last 2 months last year. So we must understand the base of it coming there. But the trends we've shown the September numbers, and we've updated continue to point out to a strong performance this year.

The next question is from Harry Botha of Anchor Stockbrokers.

Just a quick question for me regarding the trends you've seen in the net interest margins for the second half of the year compared to the first half. I think how asset pricing and liability pricing trends developing in the second half compared to the headwinds you saw in H1?

Yes, great. Actually, it's an order, Harry, I will ask the business unit head to talk about specific assets pricing. Overall, at a group, obviously, we're seeing margins widening, but that's endowment, which is obviously helping us. On the asset side, let's start to lever a consumer then Barbara for business and commercial and then Brooks on CRP. [indiscernible] to you as surprising please?

Thanks, Arno I think the portfolio where we have seen quite a bit of pressure from a competitive pricing perspective has been within the home loans portfolio, particularly as all the players are back in the market. So that's definitely we've seen pressure. However, it still better than where we were in the interim in the first 6 months.

Barbara?

Thanks, Arno. Very similar to Lihle We continue to benefit from the endowment environment. Again, in B2G, we are largely deposit base that's naturally translate into our overall margin. So continued upward trend on margins. From a lending perspective, a little bit of compression relative to June, but continuing to trend upwards from a year-on-year perspective.

Brooks?

Thanks, Arno. Thanks, Harry. In terms of net interest margins for CIB, I think in light with the same as other BUs, we continue to see that improve over the first half of the year. And we are seeing some respite in particularly investment banking prices as we have grown our sort of book in the second half of the year. So net interest margins are improving over the first half of the year for the first 10 months of the year.

Thanks. Harry, anything else?

No, that's great.

The next question is from Kevin Harding of Investec.

Just a couple of questions on asset quality within CIB and BCC. Within CIB, just to get a sense of what the main driver behind the normalization of impairment charges are. You did call out specifically ratings downgrades and specific provisioning. So on balance, has been the new business strain or growth in the book that's driving the high impairment charge? Or do you have the ratings downgrades and specific provisions also had an outsized effect on that credit loss ratio. Within CIB, which sector saw the highest level of ratings downgrades and I guess, what are the drivers underpinning those ratings downgrades? And then on BCC, just to get a sense of -- with respect to those impairment charges rising in the Africa regions. Is it weakening credit health or new business strength?

Brooks and Barbs, over to you, starting with.

Okay. Thanks, Kevin. If I just reflect back to the first half of the year, I think the first half of the year related to one SA name in the SA consumer sector that's what's driving the impairment charge. If you look into the second half of the year, I think it's really relates to some of our exposures in Ghana as Arno mentioned, there have been some strain in terms of some of our exposure in the Ghana market. We have done some rapid risk reviews, and we continue to do so in Ghana for the exposures that we have there. So we have increased some of the provisioning there. And then the second element, Kevin, really relates to -- we've seen some growth. So we are starting to see us raising Stage 1 and Stage 2 provisioning as the loans and advances grow. I think the muted growth, particularly in investment banking in the first half means meant that we didn't see a lot of that in the first half of the year. But into the second half of the year, we are starting to see some of that growth come through in Stage 1 and Stage 2 provisioning. In terms of sectors, there are no particular sectors that we are particularly concerned about, I think really relates to some of the exposures that we have in Ghana, where as the country rerates and as a downward rerating we are -- we actually hold more provisioning rather less specific, but more specific to the geography. That's all from me.

Thanks, Arno. Can I please? Kevin, from a DTC perspective, there's probably 3 kind of key drivers, I would say. So the first 1 is Nigeria, we are seeing a normalization of our impairments from a Nigeria perspective, you'll recall that last year, we had quite significant postage recoveries in that environment. So really what we're seeing there is normalization of that credit charge. From a Ghana perspective, I guess, a little bit similar to some of what you're seeing in CIB, but also just a number of legacy accounts that we're sort of trending towards like for stage in line with regulatory requirements. So there's some topic of provisioning that we're seeing in that space of driving the Ghana performance at really West region being one of the predominant drivers around some of the impairment normalization and the increase that we've seen year-on-year. And then just in terms of the macroeconomic environment, we have read some additional provisioning centrally in response to some of the macroeconomic concerns that we have across the portfolio. So a little bit forward-looking in its nature, given some of the dynamics. Those are the broad teams that we're seeing. None of it really being new business strain in Ghana, we actually go back a little bit on this appetite for longer term and big ticket type exposures really sort of sticking to shorter term and longer lower value transactions given the economic environment and the interest rate environment. I hope that helps.

Perfect appreciate it.

The next question is from Keamogetse Konopi of Citi.

Just a question on asset quality. Can you please give a sense on a follow-up to Kevin's questions. Can you please give a sense on whether there has been a divergence in passive quality sort of in other regions of the Eastern South and Central sort of African regions relative to West Africa. And also just given the higher cost growth within Africa regions are you still expecting positive jaws sort of to year-end in the region, in Africa regions.

Yes. Yes, we're expecting strong positive jaws in Africa regions, notwithstanding a much higher cost, strong positive jaws in Africa regions. On the asset quality, again, maybe it's best to talk to the business units on any specific divergence between the different regions? Lihle, maybe you want to start first? Do you see any specific divergence in the different regions?

No. There isn't -- there isn't one that really sticks out maybe just -- I mean, the market for us where in the East than we have seen a pick up more than what we stated was from a Kenya perspective. But other than that, I think a lot of the portfolios have been in line with some of the book growth that we've had in that market. And overall, the portfolio still makes sense. So there isn't a particular region to collate.

Okay. Thanks, Barbara?

Nothing specific. There is sort of general upwards teams and some of the I guess there's some elevation in Kenya, but it's not outside of our expectations and largely offset by some of the positive we've seen in the rest of the region. So it's really in our space, it's been really more in the West region that we've seen that elevation as we see normalization impact.

And Brooks, anything you'd like to highlight? And you mentioned Ghana already. So that's one of them.

Yes. Nothing else other than Ghana. I think the only other name is a single legacy name in East Africa, but no divergence with the question. Nothing. Okay. So I don't think there's strong regional trends here, but rather sort of localized specific obligors.

Our last question is from Baron Nkomo of JPMorgan.

Just 2 quick questions on Liberty. Number one, how do your life APE sales compared to the prior period and then secondly, on your pandemic reserve, you had a balance of ZAR 46 million in H1. How much of that has been utilized so far? And do you intend release whatever is left into P&L anytime soon? Okay. Great. On your first question, where you see the trend similar to what we saw earlier on this year. Yes. On the pandemic reserve, we are seeing continued higher mortality rates in the people over 60 years of age. We do think those are lingering on longer-term COVID type impact, and we are gradually using some of the pandemic provision to reset some of the persistency and the mortality curves on the back of that. We still have excess corporate provisions, which allow us to continue to allow us to manage those excess steps over the 6 year category. I think in August, we set the provisions for COVID amounted to approximately ZAR 800 million. We've utilized roughly half of that year-to-date. So there's roughly around ZAR 400 million left over we are probably not going to release that to P&L, but rather ensure we are appropriately provided for specifically any lingering longer-term COVID type impacts and providing for this.

The next question is from Bankole Ubogu, Bank of America Securities.

Just 2 quick questions from me. The first one is if you could just give some color on your customer gains or client numbers, especially on light obviously, the MIMO incident. That's the first. The second question, if could give some sense as to whether the benefits you're seeing at least for the second half on higher interest rates is being offset or more than offset by the high inflationary environment. Thank you.

Okay. Customer numbers I'm going to refer to lease because I assume interested mostly in the consumer space, where they matter. On the second question, no, the net endowment benefits certainly exceeding the marginal uptick we're seeing in credit impairment charges. So net-net, the group at this point in time is benefiting out of the higher interest rates you would say how does it also impact the higher costs? Again, net-net, are the environment exceeds the additional pressure we are seeing through the cost line driving this very strong NII, which I referred to. Lihle, on customer numbers, you just want to summarize active number of customers year-to-date.

Yes, thanks. So we continue to see growth in terms of our clients or client numbers. Year-to-date I mean, from a year-on-year perspective, we see sitting at a growth of mid-single digits on a growth perspective. But the mix is quite interesting. So we're actually seeing faster growth from an affluent perspective. So private banking in particular, we've seen that improve it a bit from last year as well as we continue to see the growth from a use perspective. But certainly, it has moderated from the highs that we saw in the prior year.

Then the next question is from Simon Nellis of Citibank.

Just a quick one for me on risk-weighted asset growth. I think from the Pillar 3, it was up 7% quarter-on-quarter, so a nice acceleration. Can you just unpack that? Is it mostly due to credit growth yes? And do you think this momentum will be continued in the coming quarters?

Yes. Actually, we're seeing a continued momentum on that sort of basis. So mid- to high single-digit loans and advances growth driving our risk-weighted asset growth. we're seeing a strong pipeline in CIB, in particular, and maybe Brooks can give some details if you need those. But we also see continued good growth in the consumer and in the business and commercial segments. Across the portfolio, a good growth, but I guess CRB slightly stronger than some of the other portfolios. But long -- medium term and short term, certainly mid- to high single RWA growth is what we're seeing coming through. Thank you very much.

Sir, we have no further questions in the queue.

Please join the call this afternoon. Arno, would you like to make any closing comments before we close? Just to thank everyone for dialing in and obviously looking forward to meeting all of you in March. Are you going to be releasing our numbers. And yes, and we're looking forward then to talking about a strong year, which we've had this year. So hopefully, good momentum behind the business and evidence that to you. I wish all of you, obviously, a good festive season and hopefully you can take a break, and then we'll see you soon after that.

Thank you very much, sir. Ladies and gentlemen, that then concludes today's conference, and you may now disconnect.