Absa surprises with 19% earnings rise

2011-08-02 09:08

Johannesburg - Absa Group [JSE:ASA], the South African bank majority owned by Barclays, reported a better-than-expected 19% rise in first-half profit on Tuesday, helped by a decline in bad loan charges and rising income from transactions.

South Africa's largest retail lender said diluted headline earnings per share totalled 638.5 cents in the six months to end-June, from 535.9c a year earlier.

The results compare with an expected 619c, according to the average of two analyst estimates taken by Thomson Reuters.

SA banks were hit hard by a 2009 recession that sparked a million job losses, eroded corporate demand for loans and left houses with ballooning debt.

Like its rivals in Africa's top economy, Absa's recovery has been slow as costs continue to rise and bad debts remain a concern. It has been on a push to rein in costs and take a cautious lending stance.

It is also looking to more business in Africa with parent Barclays. The two last month combined their African operations through a joint regional office.

Net interest income, a measure of earnings from lending, totalled R11.62bn compared with R11.29bn a year earlier.

Absa rival Nedbank Group [JSE:NED] posted a 26% rise in first-half earnings on Monday.

Absa shares are down 5% so far this year, making it the second-biggest decliner among Johannesburg's index of bank stocks.


  • Marcus Westin - 2011-08-02 09:21

    Not surprising considering how expensive ABSA's bank charges are compared to the other banks. They even charge internet banking subscription fees of R22pm where FNB does not have a monthly charge.

      Sportsjunky - 2011-08-02 15:26

      Im thinking of changing coz im tired of the 3-400 in bank charges i fork out each month. My wife and my brother pay 90 bucks for the same thing, why must i pay more

      Axiom - 2011-08-02 20:44

      You get what you pay for Buddy, surely Merc is more expensive than Hyundai?

  • 50something - 2011-08-02 10:15

    This should not be a surprise the bankcs are charging a fee for the most insignificant service.

  • safarisouthafrica - 2011-08-02 14:36

    This is no surprise! They have raised my monthly banking fee by 19% compared to last year.

      Sportsjunky - 2011-08-02 15:24

      LOL, funny. Eskom also said they made 29% more than last year... eerrrrhhh... that is coz yol are charging us 29% more

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