Absa sees profit up more than 20%

JOHANNESBURG – South Africa’s biggest consumer bank Absa, majority owned by Barclays Plc, expects its first-half headline earnings per share grew by more than 20 per cent, the company said yesterday.

“The continued low interest rates and favourable retail trading environment have resulted in an improvement in the operating performance of the retail operations and a reduction in credit impairment levels of the group,” Absa said in a statement to the Johannesburg bourse. Absa said it saw both headline EPS – the key profit measure used by South African companies which excludes non-trading, capital and certain extraordinary items – and full earnings per share growing by “slightly in excess of 20 per cent”.Absa’s fiscal first half ended on September 30 and its results are due to be released on November 21.Shares in Absa rose 1,75 per cent to 86,49 rand, outperforming the Johannesburg Securities Exchange’s blue-chip Top-40 index which was up 1,3 per cent by 0839 GMT.One Johannesburg-based analyst said the earnings forecast was above market expectations and investors expected a solid performance from all the bank’s business units.”It is above market expectations and I think it is a combination of accounting issues and a very strong operating performance in a favourable environment,” the analyst said.”I think they are trying to signal that they have had a strong operating result across the board – retail, investment banking and financial services”.Absa said a strong equity market performance further boosted the company’s results in the six-month period.Earnings of South African banks have been boosted by the lowest interest rates in over two decades, which has spurred demand for home and personal loans.Barclays acquired a 56,1 per cent stake in Absa in July for around 28 billion rand.-Nampa-ReutersAbsa said it saw both headline EPS – the key profit measure used by South African companies which excludes non-trading, capital and certain extraordinary items – and full earnings per share growing by “slightly in excess of 20 per cent”.Absa’s fiscal first half ended on September 30 and its results are due to be released on November 21.Shares in Absa rose 1,75 per cent to 86,49 rand, outperforming the Johannesburg Securities Exchange’s blue-chip Top-40 index which was up 1,3 per cent by 0839 GMT.One Johannesburg-based analyst said the earnings forecast was above market expectations and investors expected a solid performance from all the bank’s business units.”It is above market expectations and I think it is a combination of accounting issues and a very strong operating performance in a favourable environment,” the analyst said.”I think they are trying to signal that they have had a strong operating result across the board – retail, investment banking and financial services”.Absa said a strong equity market performance further boosted the company’s results in the six-month period.Earnings of South African banks have been boosted by the lowest interest rates in over two decades, which has spurred demand for home and personal loans.Barclays acquired a 56,1 per cent stake in Absa in July for around 28 billion rand.-Nampa-Reuters