Absa hit by lower profit
Johannesburg - Banking group Absa's profit before tax decreased by 19% to about R1.481bn in the first quarter of 2011 from about R1.832bn in the first quarter of last year, the group's UK parent Barclays said in an interim management statement on Thursday.
It said favourable foreign exchange movements and the improved performance of the underlying Absa Group [JSE:ASA] business were offset by a £54m one-off credit in 2010 in relation to the South African group's recognition of a pension fund surplus.
"Excluding the one-off credit in 2010 profit before tax increased 19% driven by the impact of currency movements, income growth and significant improvements in impairment charges as a result of a continued improving economy. Operating expenses increased reflecting currency movements and inflationary pressures," Barclays noted.
In a separate note, Absa said: "Investors should note that this update includes the effects of currency translation from South African rand into pound sterling and excludes the results of Absa Card and Absa Capital. It is prepared in terms of London Stock Exchange rules and Barclays accounting policies and includes Barclays consolidation adjustments."
So Absa actually improved on 2010 figures (if you exclude the one-off credit in 2010). Wonder what Standard Bank will have to say about that, seeing that they were adamant that the banking industry would do worse than the previous year across the board, and that their retrenchments were justified and would be the first but not the last in the industry. Too late for the retrenched workers if they turn out to be wrong, though.
So why does Mrs Ramos get a multi million rand package,as well as obscene incentive bonusses? Of course,shareholders will keep quiet.