*Salient points:
- Revenue increased 3% to R40.1 billion
- Operating costs fell 2% to R21.6 billion
- Cost-to-income ratio improved to 53.9% from 56.7%
- Pre-provision profit increased 9% to R18.5 billion
- Impairments increased four-fold to R14.7 billion
- Headline earnings declined 82% to R1.46 billion
- Return on equity declined to 2.6% from 16.4%
- Group CET 1 ratio of 11%, well above regulatory requirements
- Zero dividend declared
Absa Group Ltd. today reported an 82% decline in normalised interim earnings after impairments increased four-fold to R14.7 billion. Impairment charges rose as customers and clients struggled to repay debt and as the Group took decisive action to increase impairment provisions against future potential credit losses.
Despite significantly higher credit impairments and the material impact of the lockdowns on transactional volumes, the Group, including all business units, remained profitable. The Group expects a continued difficult environment for the consumer and heightened uncertainty is expected to dampen business confidence and investment in the remainder of 2020.
“In the current economic climate, ensuring continued operational and financial resilience is paramount. We are therefore temporarily holding our growth ambitions in abeyance to focus on cost management and capital and liquidity preservation, while continuing to support customers,” said Daniel Mminele, Absa Group Chief Executive.
Absa extended significant support to customers and clients across its operating markets. In South Africa, the Group’s largest market, Absa implemented a comprehensive payment relief plan. Measures included credit payment relief, insurance premium relief, the temporary expansion of the Credit Life product to cover a wider definition of loss of income, the waiving of Saswitch fees, and supporting the distribution of social grants and pension payments.
No comments:
Post a Comment