Johannesburg — STANDARD Bank has released the best results in the industry this season, according to the numbers. But the figures out of Standard Bank, Absa and Nedbank were far from perfect.

Nedbank showed some of the worst metrics. Its headline earnings per share grew the least, its dividend cover was the lowest, its cost-to-income ratio the highest, its capital adequacy ratio was the lowest, and it suffered the steepest decline in earnings from its retail business.

Yet Nedbank's operating expenses were the most tightly contained and its credit loss ratio, at 0,96%, was better than its peers, even if it was outside of Nedbank's target band.

Nedbank CE Tom Boardman had expected his bank's results to be in the middle band of the industry's figures, but with only the FirstRand group left to report, he may have overestimated Nedbank's position.

On the retail banking side, where Nedbank's earnings fell 18,6%, Boardman said clients were taking pain, particularly on home loans

"That's the biggest borrowing most people have got," he said. And although he thought impairments (bad debt) would level off in some areas, he reckoned the next pain would be in credit card balances.

All of the banks tried to contain costs and Absa went so far as to retrench 100 senior managers. Standard Bank had a hiring freeze in SA and Nedbank had increased staff only when rolling out more branches.

All of the banks had beefed up their collections teams and all of them have said this trend is likely to continue as consumers struggle to pay back loans.

All the banks in the six months to June benefited from the sale of their shares in Visa, the credit card company, which went on to launch an initial public offering. The extra cash from the sale of the Visa shares, and increases in capital adequacy, meant in all instances that the return on equity ratio fell.

Poor conditions in the retail banking market meant the institutions were making their lending criteria stricter.

Jacques Schindehütte, financial director at Absa, said despite SA's need to lend to low-income earners, Absa was not going to lend to anyone who could not pay the bank back.

Sim Tshabalala, CE of Standard Bank in SA, said his bank had also tightened up lending criteria and bodies, such as the Congress of South African Trade Unions, that complained about the lower end of the market not being serviced, had a legitimate gripe.

However, both Absa and Standard Bank pointed out that their main duties were to protect depositors' money and look after shareholders.

"The net result is that people at the lower end of the income scale will battle to qualify (for loans)," Tshabalala said.

While retail earnings fell, corporate banking earnings rose across the board, but Reserve Bank Governor Tito Mboweni has warned that corporate debt is expected to climb next year. Schindehütte said if corporate and investment banking growth slowed into the next year, Absa would have a serious issue on its hands.

"We're hoping the infrastructure spending, much of which has to happen by the World Cup soccer, will save the day and provide some stimulus to corporates." Yesterday's decision to put interest rates on hold, however, is a bonus for all the banks. While Absa had forecast a 50-basis-point increase, all three were holding thumbs for a hold. Not only will it help earnings and reduce impairments, it will boost banks' share prices. Since June, all banking stocks gained some ground. At its worst, the JSE's banking index was down almost 30%, but late yesterday it was 11% down on the year.

A scourge the banks were not keen to talk about was the spate of ATM bombings. Tshabalala said estimates were the bombings this year had cost the industry about R290m.

The cost of replacing an ATM was sitting at about R400000 for Standard Bank. This would suggest that about 700 ATMs had been bombed countrywide. Tshabalala said 79 of them belonged to Standard Bank and had cost a total of R42m.

No one had a clear solution yet. Closing down ATMs at night would inconvenience clients too much, Jacko Maree, CE of the Standard Bank group, said this week.

He said despite a possibility of dye staining the notes in case of a bombing, there was a market for dye-stained notes.

Tshabalala said a wider solution was called for - this entailed fixing the problems in SA.