Absa reports 3 percent rise in full-year profit

SOUTH African lender Absa posted a 3 percent increase in full-year profit on Wednesday, but warned it would take longer to achieve its 18 percent to 20 percent return on equity (ROE) target as the economy splutters.
The results are the first under new chief executive Daniel Mminele, who took the helm in January, as local lenders struggle with an economy long characterised by stagnant growth, high unemployment and rising living costs, and which tipped into recession in the final quarter of last year.
Like rival Nedbank, the bank said it would likely not meet its target on ROE, a key profitability metric, on time. It had hoped to achieve this by 2021.
“We still believe that a RoE target of 18 percent to 20 percent is appropriate for our group, although we do not envisage achieving it until 2022 at the earliest, which is heavily dependent on the state of SA’s economy,” the lender said in a statement.
The bank’s headline earnings per share — the main profit measure in South Africa — stood at 1, 750,1 cents (US$1,10) in the year to December 31, compared with 1 703,7 cents a year earlier. — IOL