South Africa'sAbsa Bank, which is owned by British Barclays' African subsidiary, Barclays Africa Group, said its headline earnings rose 12% y/y to ZAR 8.266bn (EUR 551.7mn) in 2013 on the back of improved credit impairments, particularly in retail mortgages and commercial property finance. Headline earnings per share, which exclude certain one-off items and are the major profitability gauge in South Africa, increased 11% to 2,180 cents.
Pre-provision profit fell 2% y/y to ZAR 19bn, as revenue growth improved in the second half of the year, but remained below cost growth that included substantial investment spending, the group said in a bourse filing. The group's return on equity (ROE) improved to 15.5% from 13.5%, above its 13.0% cost of equity. Net interest income increased 8% y/y to ZAR 23.565bn in 2013 as average interest-bearing assets grew 5% and net interest margin rose to 3.64% from 3.54% a year earlier. Impairments fell 27% y/y to ZAR 5.881bn, resulting in a lower credit loss ratio of 1.14% compared to 1.6% in 2012.
Absa Bank's total assets grew 3% to ZAR 789.4bn as of end-December. Loans grew 5% to ZAR 534bn, while deposits increased 4% to ZAR 488bn.