DURBAN – Absa on Monday joined the growing list of financial services institutions hard hit by Covid-19, warning its shareholders that it expected the trading environment in the second half of the year to be extremely difficult.
Absa said its profits would decline more than 80 percent during the six months to the end of June on impairment charges as consumers struggled to repay debt.
The group said its earnings fell 82 percent to R1.46 billion, with impairment charges increasing 297 percent to R14.66bn from R3.7bn last year.
It said it took a conscious decision to increase impairment provisions against future potential credit losses.
Absa said diluted normalised headline earnings per share (Heps) tumbled 82 percent to 173.4 cents despite revenue increasing 3 percent to R40.1bn. It said operating expenses fell 2 percent to R21.6bn.