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Absa, South Africa’s third-largest lender, is forecasting that its revenue growth in 2019 will outpace that of cost increases after slower economic growth and a battered consumer weighed on its ability to generate income.
Adjusted earnings per share, which excludes items related to the separation from former UK parent Barclays Plc, rose 4% to R19.1, Absa said in a statement.
The bank said consumer spending will probably remain constrained in South Africa this year, with the economy expected to expand 1.7%.
In its African operations outside its home market, gross domestic product will expand 5.9%, with infrastructure investment, improved mining output and agriculture supporting growth and helping to expand loans in the region faster than in South Africa.
Absa is one year into executing a turnaround plan after Barclays sold down its controlling stake. This has given the lender room to take on more risk in its retail banking unit, which accounts for more than half of its profits, after losing market share to its competitors in the last decade.
Absa has gained 6.5% this year after being the worst-performer in the six-member FTSE/JSE Africa Bank Index in 2018.
