Thank you all for joining us as we present our results for the first half of twenty twenty one. One of the leading board members yesterday said something remarkable to us. It was actually quite dramatic. And she said, You launch straight into the hardheaded operating environment and competitive issues, and you say nothing about a 1 in-one 100 year event that has had a profound impact on humanity and is probably the single biggest plague a pandemic that humankind has known. In response to what she said, I think it's appropriate even today for us Just to mark the impact on humanity that COVID has had and just to nod to those that have fallen and to the gallant people that fighting this pandemic, whether they be clients, shareholders or our own staff.
Just half a second, please. Thank you. If you are joining on BlueJeans and would like to ask a question, Please do so by clicking the Q and A link on the right hand side of your screen. Despite the additional uncertainty and restrictions caused by the delta variant, The world economy began to recover from the pandemic during the first half as wide vaccine coverage enabled a return to a more normal way of life and level of economic activity. The economies of Sub Saharan Africa contracted less than most in 2020, but the continent's recovery from the pandemic may be prolonged by the slow vaccine rollout in most of the continent.
In South Africa, a very deep contraction in 20 '20 has been followed by a fairly rapid recovery, supported by strong commodity prices. The vaccine program in South Africa has now gained good momentum. Even I had my jab this Sunday, my second one, delighted to report. And it is reasonable to expect that most adults will have been vaccinated by the end of the year, which should enable a more rapid and more inclusive short run recovery. The intense and large scale unrest experienced in South Africa in mid July, has caused significant economic and social damage and has powerfully reinforced the case for further structural and governance reforms.
However, while these events have been extremely destructive and distressing. We are encouraged that South Africa's constitutional democracy has survived and even been reinforced by the severe stress test that we've just seen. It's clear that the vast majority of South Africans are committed to peace, to our democracy and to the rule of law. The shock we've received may also help us speed up the structural reforms that our economy so desperately needs. As we did during 2020, we continued to manage the pandemic using the 3 phase approach that we introduced last year: First, response to the immediate threat second, recover and help to accelerate the return to growth and third, reimagine to adapt to the new normal.
Fortunately, as you will see today and then In more detail, if you care to join us at our strategy day tomorrow, the balance of our work has shifted away from respond, and we are firmly focused on recover and reimagine. We've made good strategic progress over the half. Our colleagues have adapted well to our new structures and remain highly engaged with our employee Net Promoter Scores remaining well above the industry average. Our disbursement volumes, activity levels and franchise have all developed positive momentum and are all growing again. The single most notable strategic development over the half was, of course, the announcement of our intention to achieve 100% ownership of Liberty and to integrate Liberty's capabilities more tightly into the broader group.
I'll say a bit more about this in a minute. We're pleased with the strong recovery in our earnings over the past 6 months. We're making good progress. However, as we've said before, full recovery from the effects of the pandemic will take more than a year. Returns have improved throughout the group.
Group ROE is up 4.40 basis points on the prior period, and we are pleased to be able to declare an interim dividend of $0.03 per share. We intend to draw Liberty's formidable capabilities more closely into the wider Standard Bank Group. This will enable both Liberty and Standard Bank to better compete against our peers by providing both sets of clients with more relevant and attractive set of services and solutions. In other words, This transaction completes the foundations of our platform business. Our proposed buyout will be by way of a share and cash offer.
Once the transaction is completed, Liberty's minority shareholders will hold approximately 3.5% of the Standard Bank Group shares. The combination of Liberty and Standard Bank will produce greater revenues accompanied by better operational and capital performance than if they had remained as they are now. I must emphasize that Liberty remains a listed entity and quite independent till the transaction is complete. And indeed, the same applies to Liberty 2 Degrees. But we do expect Liberty to be delisted in the Q1 of next year.
We've delivered many new solutions for our clients during the half, ranging from easy ways to make payments to further add ons to our mobile banking app, allowing clients to access all their solutions on a single platform to innovative, unified digital platforms. For instance, clients enjoyed the convenience of making peer to peer payments using QR codes, with payments growing to more than ZAR60 1,000,000 per month. And our clients are now able to buy shares in top U. S. Companies and ETFs from the Shift app.
Unaiyo, A unified digital platform, which operates across our segments and the continent, has been launched in 3 countries and will soon launch in a number of others. Two examples of innovation from our wholesale business our PowerPulse, which is a digital platform that links electricity producers and consumers in South Africa and beyond and 1Hub, an online marketplace where our wholesale clients can access digital solutions provided by the bank as well as third party solutions provided by our trusted partners. You will hear more about these one and many other new services and solutions in more detail if you are able to join us tomorrow. Indeed, we announced just this morning a fantastic partnership Pick N Pay. The growth we see in the numbers of active clients in our consumer and high net worth And business and commercial client franchises in both South Africa and Africa regions is a positive reflection of the changes we made to improve our client experience.
We're proud to have arranged a number of sustainable finance firsts over the half. We partnered with Netcare to launch Africa's 1st sustainability linked bond and with Woolworths to execute South Africa's 1st sustainability linked loan in the retail sector. We were the sole arranger for Invested Property Fund Sustainability Linked Bond, the 1st South African REIT to issue such a bond. And we partnered with TUF to list the 1st social bonds under JSE's sustainability segment. We're also pleased to report that SPSA launched its debut JSE listed social bond last week.
The bonds were issued under the group sustainable bond framework, and their proceeds will be used to fund mortgage lending affordable housing with a focus on women borrowers. Our CFO, the inimitable Doctor. Arnaud Denker, We'll now describe our financial results for the half year in more detail. Over to you, Arnaud.
Thank you, Sim, and good morning, ladies and gentlemen. I'm now going to take you through the financial outcome for the group for the 6 months ended 30th June 2021, starting on Slide 9. In the first half of twenty twenty one, the group delivered headline earnings of ZAR11.5 billion, up 52% on the prior period and a strong common equity Tier 1 ratio of 13.5%. This robust result allowed the declaration of a dividend of $3.60 per share after no dividend was declared in the prior period due to regulatory constraints. Return on equity recovered to 12.9% from 8.5% in the prior period.
Headline earnings Growth was supported by a significantly lower credit charge shown here as a credit loss ratio of 88 basis points. We covered from 160 basis points in June last year. Negative jaws for the period resulted in a higher cost to income ratio of 58.3%. On Slide 10, we show some of the underlying drivers of revenue growth in the period. On the left, you can see targeted lending growth continuing in our retail portfolios.
In the middle, we have shown transactional activity levels recovering meaningfully from lows in the pandemic period last year. And on the right hand side, we show franchise momentum, illustrated by the number of active clients increasing by 5% in consumer and high net worth clients and 6% in business and commercial clients. Increased activity levels translated into strong underlying revenue growth. This is masked in reported revenues, however, by 3 large impacts in the period. First, on NII, Shown in the first chart, we continued to feel the endowment impact of lower rates across most of the markets in which we operate.
While we are reporting NII down 4%, excluding the impact of endowment, NII would have been up 3%. We are encouraged that margins have now stabilized. Secondly, On non interest revenue, in the middle chart, the impact of an outsized performance in trading revenue in the prior period has resulted in non interest revenue being flat overall. We are encouraged by the 3% increase in fees And we can see that trading revenue is 21% up on a more normalized base in the first half of twenty nineteen. Thirdly, which we will discuss later in the pack, the strong rand diluted revenues earned from outside of South Africa.
Lower credit impairment charges in the 3rd chart drove performance and this result was better than what we had anticipated. Slide 12 walks through the headline earnings growth by income statement line item to end at ZAR 11,500,000,000. The standout performance is clearly the recovery in credit impairments shown as the large gold bar in the center of the chart. At the bottom of the chart, we have shown the rand and the constant currency growth rates for the various income statement line items. As you can see, the strength of the rand had a large impact In dampening results from non SA entities in the period, headline earnings growth of 52 Rands translates to 64% when measured in constant currency.
Slide 13 is our usual income statement table, but we have included a column for the first half of twenty nineteen For comparison against the more normalized period, using this analysis, we can see that revenues are back at 2019 levels, Costs are slightly higher and the credit charge is still higher than 2019 levels. This slide also illustrates the impact of constant currency on this period's results. And while translating revenues into a relatively stronger Whilst translating revenues into a relatively stronger rand dampened revenue growth, the currency impacts also clearly flattened cost growth. Pre provision profit is up 1% on a constant currency basis. This is despite the endowment impact and despite the high base of trading in the prior period I mentioned earlier.
Standard Bank activities headline earnings growth was 41% in rands and 49% in constant currency. And after including ICBCS and Liberty, this improved group earnings growth to 52%. Using this slide as an anchor, as we move through the income statement, I'm now going to discuss the 4% decline in NII. As you can see within loans, average retail balances grew 7% with the larger portfolios of mortgages up 7% and vehicle asset finance up 5%. This contributed at a group level to average interest earning Assets up 3% on the prior period.
Average corporate loans were lower given high lending balances this time last You can also see that average interest earning liabilities were up 5% in this period. And within this deposits, Strong growth in current savings and cash management was experienced and lower reliance was placed on comparative expensive capital market Funding as a result. The balanced growth that we have discussed helped drive NII growth, But declining margins more than offset the balance growth to result in NII down 4%. Compared to 1H 2020, Margins declined 26 basis points to 3 61 basis points with the main driver clearly being endowment, a 27 basis point impact or ZAR2.2 billion in NII. As anticipated, the second half of twenty twenty was a low point for margins.
I'm now going to cover non interest revenue, which was flat period on period. Within NRR, net fee and commission income increased 3% as consumer activity levels and transactional volumes improved. In South Africa, fee income was negatively impacted by pricing adjustments On account and ATM fees as well as lower cash related fees as customers switched from branch to ATM and electronic channels. While the latter had a negative impact on fees, it is in line with our strategy to drive our clients to digital panels and to de cash our branches where possible. Reducing branch sizes and removing cash are key to our ongoing drive to lower distribution costs.
Electronic banking fees recorded 14% growth as clients increasingly embraced our innovative and convenient digital solutions. Trading revenue declined from record levels last year. Volatility related gains were replaced with strong client flows in Angola, Ghana, South Africa, Uganda and Zambia. In the prior period, Other revenue and other gains and losses were dampened by equity revaluation losses, hence the high growth rate of this income statement line item this year. I'm now going to discuss the largest driver of our results, the halving of our credit impairment charge.
On Slide 20, We show that the growth in provisions matched the growth in balance sheet for the period. Balance sheet provisions of ZAR51.6 billion resulted in a total coverage ratio of 3.8%, flat on the year end position. Stage 3 loans as a percentage of the loan book remained at 5.5%. And as you can see here, the Stage 3 coverage ratio improved slightly to 47%. Forward looking provisions have remained largely intact since year end.
On Slide 21, we compare the first half of twenty twenty one with prior periods. Net provisions raised in the period have reduced as lower forward looking provisions were required and customers resumed payments or repaid loans. Offsetting this somewhat, the South African card portfolio saw continued strain in the expired payment holiday book and this required increased provisions. Write offs increased period on period. This was the result of the write off of certain legacy assets in the corporate portfolio and due to the resumption of bad debt book sales in card and personal unsecured portfolios.
The credit impairment charge for the period of ZAR5.8 ZAR1 1,000,000,000 is an 88 basis points credit loss ratio. And this is back inside the group's through the cycle target range of 70 to 100 basis points. This ratio, the 88 basis points, is lower than anticipated and flattered by a net recovery in the Wholesale Clients segment. The financial impact of the unrest and riots in South Africa in July this year on our customers is yet to be finalized. However, the impact is expected to be limited predominantly due to client insurance.
On Slide 23, we can see the credit employment charge splits by client segment. A net release in wholesale amounted to ZAR278 1,000,000 as client exposures matured were paid down. A large decline in credit provisions of 31% in consumer and high net worth clients is evident Given the expiration of payment holidays and a generally improved operating environment, in the business and commercial portfolio, Provisions declined by 20% compared to prior period, masked by prior period year recoveries. The CHNW and BCC charges include the current period impact of provisions relating to client relief portfolios. Active client relief portfolios, and you remember a year ago when we spoke about that, These amounts to ZAR118 1,000,000,000 and ZAR21 1,000,000,000 as of December have further reduced to ZAR6 1,000,000,000.
Within the client relief portfolios, we continue to provide for performing loans that have been identified as high risk or permanent distress as Stage 3 loans and we will continue to do so until 6 months of performance has been reestablished. We have retained the ZAR500 1,000,000 Judgmental credit provision held in the center in the prior period given the uncertain operating environment. The CHNW segment's credit loss ratio of 160 basis points remains slightly above the through the cycle target range of 100 basis points to 150 basis points for this portfolio. BCC at 167 basis points is also above the range of 100 to 120 basis points. The wholesale client segment, on the other hand, was below target, bringing the group ratio to 88 basis points.
And as I indicated, this is within our 70 to 100 basis points through the cycle credit loss range. I'm now turning to operating expenses, which grew 1% period on period or 8% in constant currency. The 8% constant currency growth is lower than the group's weighted average inflation, which we calculated to be 9.5% for the period. In the first half of twenty twenty one, the largest drivers of costs were staff costs up 2% and information technology costs up 9%. Staff costs were impacted by overnight increases and an increase in variable remuneration expected For the 2021 financial year.
IT costs increased as we continue to invest in new capabilities and I will expand on that later. Other OpEx, this is the last bar in the waterfall chart, benefited from an insurance recovery on a card fraud event in Japan On Slide 27, we illustrate trends in the shape of our operating expenses. As you can see here, expense line items of amortization, Premises costs as well as headcount have all been impacted by our continued digitization efforts. Amortization has slowed down as big projects Close and fewer projects are capitalized. Premises are being optimized and branch costs are reducing as more transactions move to digital channels.
Headcount is reducing as we digitize and automate our operations. The savings illustrated on the previous slide have allowed us to invest in technology and capabilities to compete in the 4th industrial revolution. While IT cost growth is slowing compared to prior periods, we continue to invest in cloud, in productivity tools and in data and analytics capabilities to drive personalization and an even better client experience. We are investing in critical skills development and are reducing our reliance on contractors to deliver change programs. Our new operating model, you will hear more about tomorrow about this, consolidates technology, operations, security, data and real estate into one engineering portfolio.
We do this to identify and leverage synergies and deliver value. Through this operating model change, we have already started to see the benefits of the combined portfolio, and we will also see many more to come in the periods to come. Through the use of technology, our operations function is seeing a decrease in costs compared to the same period in 2020. This is driven through the usage of more than 100 robotic process automations across 145 processes. We have freed up capacity to deliver on new platforms, including the launch of Onayo in Africa regions, which Sim referred to, and the launch of 1 Hub as a platform connecting our corporate clients, which Sim also referred to.
In addition to this, we now have more than 1,000 VAF dealerships On our new VAF platform, through our resolute focus on customer experience, we have seen a marked improvement in our mobile banking app ratings in South Africa and a 19% increase in volumes period on period. Finally, through continued digital enablement of our customers and our employees and a shift to hybrid working spaces, We continue to reduce our real estate services and in this period had a 5% reduction. I'm now turning to the results from Standard Bank, ICBC Plc and Liberty. ICBCS recorded a profit of $72,000,000 in the period. The business continues to make good operational progress and it is becoming more integrated with ICBC.
The group's 40% share of earnings equated to ZAR29 1,000,000 or ZAR420 1,000,000 after translating into rands. Liberty's performance in the reporting period was much improved from the prior year, albeit still negatively impacted by the pandemic. In the period, initial prospective pandemic reserves raised together with excess risk claims amounted to ZAR1.1 billion post tax. Improved global and South African financial market conditions positively impacted the shareholder investment portfolio performance. As you can see here, Liberty reported IFRS headline earnings of ZAR222 1,000,000 compared to a loss of ZAR2.3 billion in the prior period.
After adjusting for treasury shares, The group share of earnings amounted to ZAR163 1,000,000. Liberty remains well capitalized with a solvency capital cover ratio of 1.73x 3 times as it ends June this year. As Sim mentioned earlier, on 15th July The group and Liberty jointly announced the group's intention to buy out the Liberty minority shareholders and to integrate Liberty more closely to the greater group. Transaction is expected to close in the Q1 of 2022, obviously subject to Liberty shareholder and regulatory approvals. Moving to capital and liquidity, Slide 33 provides an overview of the group's Capital stack and common equity Tier 1 ratios over the last four years as well as our liquidity ratios.
Over this period, the group has maintained robust capital and liquidity positions. Our capital levels increased to ZAR207 1,000,000,000 with a strong CET1 ratio of 13.5%. The group's liquidity positions remain strong with an ex stable funding ratio in excess of the 100% regulatory requirements. Similarly, The group's Basel III liquidity coverage ratio amounted to 141 basis points also above regulatory requirements. As we saw in the previous slide, the group ended the period with a CET1 ratio of 13.5%.
You can see this is up from 13.3% at year end. The waterfall graph provides a summary of the key drivers of the increase in the CET1 ratio in the period. As you can see, the profit increase in profit for the period was a key driver. Risk weighted asset growth was ZAR30 1,000,000,000 in the period, spread across most risk types. The group ROE recovered to 12.9% in the period and while improved on the prior period remains below our cost of equity of 14.5%.
This recovery in returns and robust capital levels shown earlier enabled a faster than expected recovery in the dividend payout ratio to 50%. Over the last 40 years, half of which are shown here, we have an unbroken record of dividend payments. On Slide At 37, we have sliced earnings three ways. The first and primary segment is client segments based on client types. We have recently changed our operating model and organized ourselves into 3 new client segments.
The consumer and high net worth Client segment includes all revenues, credit charges and costs related to individual clients. The business and commercial client segment covers small and medium sized enterprises. The wholesale client segment covers large corporate, prices. The wholesale client segment covers large corporate and regional corporates as well as sovereigns and multinational clients. This disclosure pivots our reporting to a pure client view as, for example, Vecon Asset Finance is now split Between all the segments, depending on the clients, where previously it was housed as a product in the old PBB.
Retail FX Another example that was previously housed in CRB, now reflected in each client segment where the client takes up that offering. Of course, we do still show a product view, what we call it a client solution view shown here in the middle chart. In this view, banking products dominate. In our detailed booklet, we break down banking further into home services, vehicle and asset financing, transactional banking, global markets, Investment Banking, etcetera. In our current reporting, Liberty is excluded from insurance and investments products.
And we intend changing this in future periods should the proposed minority biotransaction be successful. Most of you will already be familiar with our regional segmental split where we use legal entities as a proxy for regions. In this period, Africa Regions comprised 35% of Sandibank Group earnings. The top 6 contributors to Africa region's headline earnings remained Angola, Ghana, Kenya, Mozambique, Nigeria and Uganda. The pie charts clearly demonstrate the diversity and breadth of our client franchise across client segment, Client solution and geography.
The diversity and breadth of our franchise has proven to provide exceptionally resilient performance even during a 1 in-one 100 year pandemic stress event. Here we show client segment income statements. Our CHNW client segment delivered a good set of results in a difficult environment. Headline earnings improved by 132 percent to ZAR2.4 billion and ROE increased to 9.7% from 4.3%. An improving trend in client experience scores, growth in active clients, increasing digital capabilities and robust balance sheet growth are indications of underlying franchise momentum.
Our BCC segment headline earnings increased 1% to ZAR2.2 billion And ROE improved to just under 21%. The decline in revenues in BCC was driven principally By lower NII due to a sizable negative endowment impact, client transactional activity and turnover increased And client demand for lending to support business growth was evident. Improvements in global trade supported the trading environment across most of our markets. Our wholesale client segment delivered headline earnings of ZAR6.6 billion, an increase of 27% On a really strong first half of last year, an ROE of 20% was achieved. Revenue pressures We're more than offset by tailwinds from impairment releases, equity fair value write downs suffered last year and good cost containment.
This slide shows income statements by solution. Banking solution headline earnings of ZAR9.8 billion improved considerably, up 39% period on period. Banking solution revenue declined 2%. Costs within banking were well contained, increasing only 2% after absorbing annual salary increases, ongoing work from home costs, Higher digital capability development costs and the normalizing of performance related incentive costs. Negative jaws were mitigated by lower credit charges.
The franchise grew clients and balances and transactional and account activity improved relatively to the low level seen during the lockdown last year. A return on equity of 14.9% was achieved. The insurance business recorded growth on policies and gross written premiums, and revenues were up 6% to ZAR2.3 billion. Revenue growth more than offset higher claims leading to headline earnings growth of 4% to ZAR1 1,000,000,000. Long term insurance Gross written premiums increased by 13% and funeral gross written premiums growing by more than 20%, supported by strong growth in the underlying policy base.
Short term insurance recorded a 2% increase in gross written premiums. Claims increased across almost all products due to the COVID-nineteen pandemic as well as a difficult economic environment, resulting in higher loss ratios in both short term and long term insurance results. Our Capite Light Insurance business continues to deliver a strong return on equity. The investment business continued to grow assets under management And headline earnings. Total AUM as at end of June this year amounted to just under ZAR500 ZAR1 1,000,000,000 splits approximately 50% South Africa, 40% Africa Regions and 10% International.
Africa Regions AUM relates primarily to Nigeria and international to Isle of Man in Jersey. Due to the sizable non rand denominated AUM and revenue contribution, the stronger rand impacted period on period performance. Headline earnings grew 6% to ZAR427 1,000,000, up 39% in constant currency, 39% And ROE of 42% was achieved 40% was achieved. As previously mentioned, the excellent results achieved in the insurance and investment businesses are inextricably linked to a large and diversified banking interests banking businesses. Finally, by region, The group's regional performance reflects underlying recovery trends in the countries of operation.
The group's South African business rebounded strongly, recording earnings of 2.8 times those of the prior period. Client demand and activity improved, Dispersions and fees recovered and credit charges declined from elevated levels. Standard Bank of South Africa's return on equity recovered to just under 12%. Africa Regions performance was significantly As you can see here by currency movements, as an example, revenue declined 11% in rand but grew 10% in constant currency. Underlying growth was underpinned by ongoing balance sheet and client franchise growth.
Constant currency cost growth of 27% in Africa Warren's explanation. The largest drivers in this cost growth were overnight staff increases averaging 8%, Compounded by cost of living adjustments in Zimbabwe. IT cost growth of 27% as a result of increased digitization efforts to support clients and balanced growth. A proportion of these IT costs are U. S.
Dollar denominated, which further exacerbated the growth rates in costs. Thirdly, deposit insurance and Amcon costs in Nigeria and Ghana linked to the balance sheet Size of these growing businesses increased significantly. This level of negative jaws is not sustainable, And we are confident that they are not that they will not be expected to continue. Credit impairments declined by 20% in constant currency. You can see here also the Africa region's ROE dropped to 17%.
In East Africa, revenues held up well in constant currency and credit impairments improved. IT costs drove up costs in constant currency and despite negative jaws, headline earnings grew 3% in constant currency. In RANs, headline earnings declined by 9% and ROE dipped to just below 15%. In South and Central Africa, revenues grew strongly despite low interest rates. Fees bounced back After the lifting of waivers in most markets in the prior period.
Credit impairments declined as operating environments improved. Costs increased meaningfully in constant currency due to the translation impact of U. S. Dollar denominated costs, cost of living adjustments in Zimbabwe, I mentioned already, and higher IT costs. Headline earnings reduced in constant currency, but increased in rands to ZAR 1,800,000,000.
Return on equity was a strong 19.2%. In West Africa, strong balance sheet growth was not enough to offset the impact of declining interest rates and therefore NII declined. Fee income growth was strong, but trading revenues declined giving the excellent trading performance in the prior period. Credit losses in West Africa were lower. Operating expense growth was high in constant currency, driven by deposit insurance costs in Nigeria and Ghana.
West Africa headline earnings declined to ZAR1.4 billion and ROE reduced to 16.3%. That brings the interim results analysis to a conclusion. I will now hand over to Sim to discuss the outlook for the remainder of the year. Thank you.
Thank you, Arne. Looking at the macros for the second half of the year, Barring the arrival of a very dangerous new variant, which, as we understand it, isn't likely, We expect that the world economy will continue to recover rapidly from the pandemic. China's economy, for instance, is expected to grow at 8.4% this year, while the U. S. Economy is forecast to expand by 6.4%, the U.
K. By 5.3% and the euro area by 4.4%. Of course, these growth rates reflect sharp contractions experienced in 2020 as well as the rapid recovery this year. The base effect is less pronounced in sub Saharan Africa, which contracted relatively less in 2020 and will grow relatively less quickly in 2021 as a result, probably at around 3.4%. Further waves of the pandemic are also likely in much of the continent, but it's also likely that vaccine coverage will improve over the next year.
As I said at the start, we think that the recent unrest, while extremely disturbing and destructive, has also demonstrated that South Africa's democracy and rule of law are well consolidated. Unless similar events occur, we expect that the negative effects on confidence and investment will fade And that South Africa's economy will continue to recover quickly in the short term, supported by strong commodity prices, accommodative monetary policy and accelerating investment in public infrastructure. There are, of course, fiscal risks to the downside. But on balance, we expect that the fiscal outlook will slowly continue to improve. As has been the case for more than a decade, the medium and long run prospects for South Africa depend to a large extent on the pace and scale of the structural reforms.
We've been encouraged by the reforms made over the one, past 6 months in the energy and logistics sectors and by the positive signal sent by the partial privatization of SAA. Since we last reported to the market in March this year, we have been more certain there has been more certainty about how we the full year to shape up. We're optimistic that the positive momentum in our business will accelerate. We are therefore able to provide an updated and clearer outlook for certain of our key drivers. We expect that our net interest margin for the full year of 2021 should be similar to the first half of 2021, which, as you have seen, was 361 basis points.
6 months ago, We expected our credit loss ratio for 2021 to improve from 151 basis points reported for the full year of 2020 but to remain above our through the cycle range. Given the improvements we have seen in our book, We now expect that the full year credit loss ratio will be within or through the cycle range of between 70 basis points and 100 basis points. The full year of 2021, we expect to deliver more than 20% headline earnings growth and an ROE which is higher than last year but still lower than the cost of equity. We anticipate the trends we've announced today will continue, demonstrating progress towards full recovery. Lastly, We have updated the outlook for the dividend payout ratio for the full year to approximately 50%, a return to pre pandemic levels.
Looking beyond the next year or so, we remain firmly bullish on Africa's medium and long term prospects. This confidence is based on the fact that Africa's population will This will be happening just as populations elsewhere are getting older and more dependent. We believe that Africa has the potential to become the breadbasket, the workshop and serve a center of the world over the next 30 years, particularly in those countries which have the right policy settings. Our corporate purpose, as always, remains unchanged. Africa is our home.
We drive our growth. We therefore remain committed to 3 things: firstly, accelerating Africa's recovery from the pandemic secondly, generating market beating sustainable returns for our investors and third, supporting inclusive and sustainable growth and development over the long term. Our strategic priorities are also unchanged, but we have radically reorganized our structure and extended our capabilities to ensure that we are more able to meet these three goals. We look forward to describing our strategic progress and plans in detail tomorrow, and we hope you can join us. We'll now go into questions, and I'll invite Fonaga, Arnaud, Kenny and David to join me on the stage.
And some may ask, why David? We recently announced the retirement of We're in the process of finalizing his replacement. As a consequence, we have asked David to act as the CE of business and commercial as we finalize the process with the regulatory authorities and make the appropriate announcements in due course. With that, let me turn it then to Q and A. Just as a reminder, to submit a question on BlueJeans, Please do so by clicking on the Q and A link on the right hand side of your screen.
If you've joined us on the conference call, I will, in fact, now hand you over to the operator for that purpose. Operator, any questions from the conference call?
Thank you very much, sir. The first question comes from James Stark of R and R Morgan Stanley.
Hi, good morning, Arnaud, Sum and the team. Three questions for me. Firstly, on ICBC standard, very pleasing performance, I thought. Can you give us a Sense of how persistent that might be going forward and if there's any prospect of receiving dividends from that investment? The second question relates to SPSA.
If you could give us some comments around the outlook for that entity's ROE From here and if you can lift it from the current 11.5%, perhaps touching on what kind of RWA growth of capital demand you see in the SA context? And then lastly, on the group's core equity Tier 1 ratio at 13.5%, if you could give us some color on how you see that evolving from here? Thank you.
Thank you very much, James. Let me let Arnaud answer all three. In fact, Arnaud, do you want to take all 3?
Yes. Thank you. Thanks, James, and good to hear from you again. On ICBCS, we've been pleased by the continued integration of this business into the bigger ICBC franchise. I think it's quite clear now after quite a few quarters, we have shown good Sustainable revenue growth driven by franchise as opposed to by once off trading type tailwinds.
And this is evident from steady P and L, which is coming through every month. So we're very pleased about that. We are unlikely to get a dividend out of this, but we obviously are continuing to work with our ICBC colleagues in Beijing to have this entity fully integrated and then to have our 40% stake sold to ICBC. And these discussions are ongoing at the moment, and we expect a further announcement to be making next year on developments in that respect. On SPSA, absolutely, the ROE of 11.5% is below our cost of equity.
As the South African businesses normalize, And that means from a credit point of view as well as increased revenue driven by endowment impact As well as the additional client activity, which we continue to see normalizing and close to client growth trajectory, we expect ROE to improve above cost of For T4 SA. On SBG, 13.5% CET1 ratio, that is quite a bit above the greater than 11% target we give. And this also informed our slightly more generous dividend payout. We expect to continue to manage our CET1 ratio a little bit tighter, A little bit towards our 11% greater than 11% target ratio and that will also then inform possibly a slightly higher dividend payout ratio going forward. Thanks, James.
I'm hoping those are addressing all your points.
Thank you.
At this stage, there are no further questions on the lines.
Thank you. Sarah?
Thank you, Sim. The first question is The question is one for Fonika in relation to the recently announced Pick N Pay partnership. How much additional cost do you expect to incur from the Pick N Pay branches? Was it always part of your strategic plan? Or is it an indication that you might have lost The market share in the entry market post the closure of the branches in 2019.
Thank you. Thank you for the question. The Relationship that we've announced today with Pick N Pay is part of the broader plan or strategic plan of creating additional value for our clients as well as for Pick N Pay as well as Standard Bank. As far as Standard Bank is We see it as an incredible way of increasing access for our clients, not just in terms of access To new services, but also in terms of existing clients having access, being able to pick up a card while you're shopping at Pick N Pay, for example. But it's also That it does give us access to clients that we wouldn't have seen before.
I do want to say that this is really about broader strategic partnership and more will come out of it. You will see you will have noted that we have actually increased clients in the first half of the year. And 4% in the main markets, We've increased our clients by 4%. So we definitely are seeing significant amount of growth that's starting to come there. From a cost perspective, it's going to be minimum.
The big contribution of this partnership in the financial statements really starts to show as we start to optimize the big branch infrastructure that we have to continue the journey that we started in 2019. Thank you.
Thank you, Fonika. The next Question is for Fonika, David and Kenny. It comes from Asif Mohammed. Please can you give us the client net Vanessa, if we can start with you. Thank you.
Thank you. Thank you, Asif, for that question. We have certainly seen a significant amount of improvement in the Natline In the net promoter score, we measure it every time a client do a transaction on any client engagement platform, whether it be digital, physical, call center, And the trends are consistent. We have seen a significant improvement, including this year, even with what we've seen in terms of Disturbances around COVID and our ability to serve some of our clients. Overall, we definitely are seeing Strong improvement in terms of COVID.
A big driver of that has definitely been, firstly, The work that we've done, we continue to do in partnership with our engineering team to really strengthen the improve the experience on our digital channel because 90 one. And of our client engagement platforms come from there. And you only have to look in the Ios store as well as Android store to see very strong ratings there of over 4. And earlier in the year, we saw quite a pleasing story in terms of both the releases of, Firstly, a South African's client satisfaction index that placed our app 3rd in the market confirmed later on by Culuminate That actually saw an increase in our rating of our app from 71 to 78, which place us 3rd in the market. So just to think about that sort of demonstrates how much we've done to really, really close the gaps in key, key areas of our client engagement?
Thank you.
Yes, thanks for the question, From the BCC side, we've definitely seen a continued trend, upward trend in the NPS score. I guess there's some specific actions that have been taken that have landed already that I think been successful. So in the enterprise area, a model like our enterprise direct, we've almost got 90% of our services being able to handle through enterprise direct. And in our Business and Commercial segment, it's really down to our relationship managers and the strength of our relationship managers. I think the really exciting stuff is that we've got More things in the pipeline that should further improve the score.
So you'll hear in the strategy day, I was talking about more additions to our mobile offerings and onboarding etcetera. So I think we see even further upward trend in the NPS. Thanks.
If I may comment on the client satisfaction index amongst corporates and large institutions, We have definitely seen a continuous improvement over the last couple of years. We undertake detailed They've been covered this year up to date, suggests that that trend, which is an upper trend, continues to improve. We're currently sitting at 8 point 2 out of 10. And when we started a couple of years ago, the CSI scores were around 7.8. So clearly, over the last 4 to 5 years, We've seen an upward trend.
We continue to work on that. I'll only be happy once we get over 9, but I'm happy with the direction of travel for now.
Thank you, Kenny. The next question is for Arnaud, also from Asif Mohammed with regards to credit loss provisions. Arnaud, banks including Standard Bank have benefited from significant reversals of credit loss provisions. Are you confident that the remaining Provisions are adequate in light of the continued challenging conditions?
Yes, the short answer is we absolutely are confident. We are appropriately provided. And the proof points are that we have in excess of ZAR2.5 billion of forward looking provisions for a Declining operating environment, we do hold the ZAR500 1,000,000 central provision. And on our vulnerable portfolios, which were the payment holidays portfolios, I mentioned That amounted to ZAR118 1,000,000,000 this time last year. We continue to provide very conservatively for those.
And in fact, we only move those clients out of Stage 3 once there is a proven 6 months record of repayments and I mentioned that off the podium just now. The short answer is we're very comfortable with our provisioning and certainly can cater further stress as we go through possibly another wave For also in South Africa and other markets.
Thank you, Arne. And Sim, the next question is for you. Congratulations on an improving trend on results and a hugely positive outlook. Could you share some insights on the platform business narrative?
I think we have used the notion of a platform business to describe our thinking about competing in the 4th industrial revolution, where we recognize that in order to be a winner, you need to be in a position to manage the relationships between importers, exporters, buyers, sellers, depositors and lenders. And we want to be in a position to manage those relationships through the infrastructure and the governance processes that we've got as a group. We have a vast set of relationships with vendors, with clients and with governments as well. And we want to put ourselves in a position to be the orchestrator of all of those relationships. It is our firm belief that the winners in this context will be those that do it the fastest and have the largest scale.
All of us are reading the same textbooks, we are talking to the same consultants, we're talking to the same clients and all the banks, I'm sure, are saying exactly the same things, that Secret here is going to be the ability to execute. We've made references for you to a number of relationships that we've built. And we announced, as we did this morning, the Pick and Pay relationship. That is one example of what we're doing in the context of a platform business. In addition to that, we've got a series of activities that we are seized with, including our relationship with Salesforce.
And Salesforce, in this context, is the essence of the is the kernel of the customer engagement model that the group has got. We're using that platform to manage our relationships with our customers, whether they be individuals or corporates. I might just add that, that relationship with Salesforce has existed for over a decade. It was developed by our business in CIB, and our CIB uses that platform successfully. We're now using that capability throughout our group.
And so in summary, you will end up then with IT or software platforms that are relevant to payments, global markets, trading and lending. But the platform business that we are referring to is in the nature, as we've used the example of a mall, where we'll be having people having their ability to sell their products and services inside Standard Bank, something we already do quite extensively in South Africa and on the continent, and we will be doing the same in other people's systems and platforms. And we are well advanced in doing that, and it's showing up in our results. I hope that covers it.
Thank you, Sam. Arnaud, the next question is for you is from Francis Baskop. What is your opinion on the interest In South Africa.
Yes, we expect interest rates to remain as they are for the remainder of this year and then have 3 rate hiking cycles next year in January, in May September of 25 basis points each, so 75 basis points up in total in SA.
Thank you. The next question is also for you, Arnaud, from Siobonga Langa. Thank you for the great results in the challenging environment. What measures are you using to rapidly reduce your cost to income ratio From the level it is at the moment.
Great. Siobhan, I hope you're joining us for the Strategy Day tomorrow. We'll be talking a lot about that. Clearly, at 58.3 percent, our cost to income ratio is not within our target band. And tomorrow, we'll be elaborating in detail how we're going to be growing the top line, the revenue line as well as maintaining our costs to sub inflationary growth to bring down the cost to income ratio to our stated target and I'll leave that for tomorrow.
Please join us then.
Thank you. Feneke, coming back to you with regards to active client numbers. Thank you for it's from Charles Russell. Thank you for the presentation. Can you comment on the strong Increase in active clients in the first half of twenty twenty one in consumer high net worth.
And what do you attribute this to? And is it sustainable?
Thank you for the questions, Charles. We are definitely pleased to see an increase in client numbers South Africa and not only in the main markets, but also into our affluent client base. For us, this has been a long Time coming in retail, you do a lot of things for a while and then they start to give you the steamroll effect and that's where we are. It's been a combination of the journey we started in 2019 by of actually building or changing Making significant changes to our client value proposition, particularly in main markets that we culminated in launching solutions such as MIMO as well as our new funeral plan product called a Flexi Pay. In addition to that, in 2019, When we started the work, when we closed the 100 branches, we also started the work of taking about 3,000 of our colleagues whose jobs was only service and actually starting a retooling process.
That actually started to come Full force in maturity in the second half of the year, but this year, definitely. So what we are seeing is a significant change Step change in productivity. So our run rate of new clients acquired is now 3x higher than what it was in 2019. We believe this is sustainable. We think there's more to come.
And partnerships such as Pick N Pay are there to help us to Even accelerate this more. Thank you.
Thank you, Vanessa. The next question is from Kea Pierre Konopi from Sanddepank Research. Please can you provide a little bit more color on the NPL sales in the period And how material these were to boosting your recoveries? And what do you think the trend will be in the second half, Feneqa? Thank you.
Thank you. Thank you for that question. So we have most certainly started or resumed the sale of NPLs. And definitely, we're expecting a lot of that one. Those to accelerate.
What's interesting is the point that Anno made earlier on that as we're starting to see a lot more clients come out of NPL, A vast majority of those are out of payment holidays. Those clients are actually starting to pay. But because of the decision that we have made to keep them in Stage 3 for 6 more months until it sticks before we take it back to Stage 1 as an important one. So what's very important to note is that our Stage 3 is, in fact, flat from December to January, just really reflecting if you exclude the impact of these expired NPL. So a very big part of this recovery really does have to do with underlying strength of payments that we are receiving every month and start of debt sales.
But most certainly, we are expecting to see a much bigger impact into the second half.
Thank you very much, indeed. That's all we have time for today. Thank you very much, everybody, for joining the call and joining on the webcast. Thank
you very much, Sarah. Thank you very much, everybody. Have a good day.