14 Aug 2019
South African lender Absa Group Ltd registered a 5% increase in first-half profit on Tuesday, as a result of its core business still growing successfully despite economic struggles, Reuters reports.
Absa has worked to regain confidence following its split from Barclays in 2017. It revealed that its headline earnings per share (HEPS) increased by 5% to 918.4 cents for first-half, from 877.8 cents in 2018.
The bank’s South African retail business reported a 4% rise in earnings, despite a 20% increase in impairments and higher costs.
On the other hand, Nedbank and Standard Bank, two key competitors, reported stagnant earnings at their domestic retail businesses following an increase in tension surrounding the economy and unemployment levels.
A higher non-interest income was credited for Absa’s success. This includes banking fees and growth in banking and car finance, which led loans to grow from 26 million rand to 122 million rand; unlike results seen in its corporate and investment bank, where earnings dropped by 10%.
Moreover, Absa has been focusing on growing its performance abroad, with its continental operations expanding by 8%.