South African (SA) lender Absa Group reported an 8% rise in half-year headline earnings on Tuesday, supported by higher revenue and lower credit impairment charges.
Headline earnings grew to $787.61 million in the six-month period ended June 30.
Absa, the third-biggest lender by assets in SA, declared an interim dividend of 850 cents per share, up 8.3% year-on-year.
Revenue rose 4% to $3.6 billion as net interest income increased 3% to $2.1 billion, driven by growth in customer loans and deposits despite margin pressure.
The group’s net interest margin fell to 4.46% from 4.58%, as lower interest rates in its rest-of-Africa operations and competitive lending and deposit pricing in SA’s corporate and investment banking business offset the benefits of balance-sheet growth.
Non-interest income increased 6% to $1.2 billion, supported by growth in fee and commission income on increased client activity and higher lending volumes and a strong trading income contribution from Global Markets.
Operating expenses rose 4% to $1.9 billion, producing a slightly higher cost-to-income ratio of 53.4%.
Credit impairment charges declined 1% to $426 million., resulting in an improved credit loss ratio of 94 basis points from 100 basis points.
–Reuters–
