COMPANIES
Absa earnings up by 22%
Posted Fri, 04 Aug 2006
Absa on Thursday announced solid earnings growth for the six months ended 30 June. Headline earnings in the interim period increased by 22.4 percent to R3.460-billion compared with pro forma headline earnings of R2.827-billion for the same period of the previous year. Headline earnings per share increased 20.4 percent from 432.3 cents to 520.7 cents per share.
Absa's group chief executive Steve Booysen said, "Absa delivered a return of 24.7 percent on average shareholders' equity compared to 24.2 percent for the six months ended 30 June 2005 and declared an interim dividend of 208 cents per share, which represents a dividend cover of 2.5 times. "This is 30 percent higher than the dividend declared for the six months ended 30 September 2005." Booysen said that the group's interim reporting period changed from the six months ended 30 September to the six months ended 30 June.
He indicated that this change was necessitated by the need to align Absa's
financial reporting with that of its controlling shareholder, Barclays PLC. The main driver of the group's performance was strong advances growth, which was instrumental in boosting net interest income by 28.2 percent from R5.588-billion to R7.163-billion for the six months ended 30 June 2006. Mortgage loans and credit cards grew by 35.1 percent and 49.1 percent respectively from June 2005. Interest margins remained relatively stable compared with the period ended 30 June 2005.
Booysen said that he was pleased with the progress made with the Absa/Barclays transaction. "In the first six months of this year, R197-million of synergy benefits have been delivered while integration costs amounted to R262-million," he said. He added that the group was on target to achieve the objectives previously communicated to the market. He also indicated that Absa has agreed in principle to acquire the nine Barclays sub-Saharan African businesses.
Sapa
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