Davos - Absa Group
[JSE:ASA], which is majority owned by Britain's Barclays, expects 2011 growth of around 3.8%, with a possible interest rate hike towards the end of the year.
"Corporate balance sheets (are) to remain very strong and there is a lot of cash. We're looking for a much stronger year," CEO
Maria Ramos told Reuters Insider television at the annual meeting of the World Economic Forum.
"Interest rates are below the levels of 30 years and that's the sign of where the economy has been. We think the Reserve Bank will maintain the rates pretty flat this year, with a probable uptick towards the end of the year."
Ramos said Absa, South Africa's largest retail lender, sees Africa as a big growth area as part of the Barclays group.
"Africa is a great destination. Since 2000 Africa has grown 4.9% in the compounded annual growth rate. We'll be growing strongly in Africa," she said.
Banks have struggled to post growth as weak demand for credit has kept revenue under pressure. While bad debt costs are receding across the sector, analysts expect income to remain squeezed by the weak economy.
Its rivals are also struggling with higher costs. Standard Bank Group
[JSE:SBK], Africa's largest lender by assets, has said it will shed more than 2 000 jobs to cut expenses.