Absa Bank earnings fall, CEO forgoes bonus
Absa Bank on Tuesday posted a worse-than-expected nine percent fall in diluted headline earnings per share to 1'224.6c for the period ended December 2012 from 1'350c a year earlier.

It ascribed the fall to higher credit impairments in retail mortgages and commercial property finance. Headline earnings were down nine percent to R8.807 billion.

The group's return on equity fell to 13.6 percent from 2011's 16.4 percent - marginally above its internal cost of equity.

Group CEO Maria Ramos (pictured), who is to forgo her bonus due to the group's "disappointing" results, said: "We expect mid-single digit loan growth in 2013. Improved momentum in our revenue growth and continued focus on efficiency should reduce our cost to income ratio again, while our credit loss ratio is expected to improve materially from 2012's elevated levels. We are building momentum in our business and this should become evident in our top line growth this year, which should improve from last year's modest levels, and should underpin a noticeable improvement in our Return on Equity."

Ms Ramos added: "We are reporting disappointing results ... our numbers reflect a difficult year."

Absa's results were hit by credit impairments in home loans and commercial property.

Absa's home loans swung to a headline loss of R992 million versus a profit of R516 million in 2011.

Image: Getty





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