Absa 1st Half Net Profit Falls 39% As Impairments Rise
August 03 2009 - 2:27AM
Dow Jones News
Absa Group Ltd. (ASA.JO), South Africa's largest retail lender,
Monday said its first-half net profit fell 39% after the value of
investment portfolios was dented by rising impairments and margin
contraction.
"Absa, however, remains profitable and well-capitalized," Chief
Executive Maria Ramos said.
Net profit for the period fell to 3.27 billion rand ($421.6
million) from ZAR5.34 billion a year earlier, the
Johannesburg-based company said. Net interest income was 2% higher
at ZAR10.77 billion, and non-interest income up 5.4% at ZAR10.21
billion.
Absa, majority owned by the U.K.'s Barclays PLC (BCS), said
credit impairments to average advances increased to 1.86% from
0.93% in June 2008. The impairment charge to income increased by
122% to ZAR4.83 billion. The financial services company also took
an almost ZAR1.1 billion impairment charge against stakes in four
Johannesburg-listed companies it took stakes in last December after
a client defaulted on stock futures deals.
Absa shares ended Friday at ZAR117.50, up less than 9% since the
start of the year compared with a roughly 12% gain in
Johannesburg's blue chip Top 40 index.
Company Web site: www.absa.co.za
-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848;
robb.stewart@dowjones.com