* FY EPS 1,224.6 cents vs 1,265 cents consensus
* Hit by 63 pct spike in bad debt costs
* Shares flat so far this year
JOHANNESBURG, Feb 12 Absa Group, the
South African bank majority owned by British lender Barclays Plc
, posted a worse-than- expected 9 percent drop in
full-year earnings on Tuesday after bad debts spiked.
Absa, the first of South Africa's top four banks to report
earnings this season, said diluted headline earnings per share
totalled 1,224.6 cents in the year to end-December, from 1,350
cents a year earlier.
That was worse than the 6.3 percent decline to 1,265 cents
forecast by StarMine's SmartEstimate, which gives more weight to
forecasts from top-ranked analysts.
Headline EPS, which excludes certain items, is the main
measure of profit in South Africa.
Net-interest income, or profit made from lending, fell 1
percent to 24.11 billion rand ($2.7 billion). Non-interest
revenue, or income from charges such as fees and commissions,
grew 6 percent to 22.7 billion rand.
Credit impairments rose 63 percent to 8.29 billion rand.
Absa beat expectations with a 684 cents per share dividend,
unchanged from the previous year. Analysts had expected a 0.3
percent decline to 682 cents.
Barclays is expected to raise its stake in Absa to 62.3
percent from 55.5 percent this year, in a $2 billion deal that
will see the British lender hand over most of its African
operations to the South African bank.
Absa's focus has been slashing costs in the near term but
analysts expect the merger with Barclays will create growth
opportunities on mainland Africa, where it previously did not
The bank acquired the store credit card business of Edcon,
an unlisted domestic retailer last year, hoping to boost its
single-digit loan growth with high margin unsecured lending.
Absa shares are up 0.5 percent this year, lagging behind a 4
percent rise by the Top-40 index.