South African banking group Absa reported an 8% increase in first-half net profit on Tuesday, driven by revenue growth and a reduction in credit impairment charges.
Absa recorded net profit of approximately $787.61 million for the six months ended 30 June.
South Africa's third-largest bank by assets declared an interim dividend of 850 cents per share, up 8.3% from the same period a year earlier.
Revenue grew 4% to approximately $3.62 billion, while net interest income rose 3% to approximately $2.30 billion, supported by growth in loans and customer deposits despite margin pressure.
The net interest margin contracted to 4.46% from 4.58%, as interest rate cuts across the group's operations in the rest of Africa and competitive pressure on lending and deposit rates in its South African corporate and investment banking segment weighed on margins, offsetting the benefits of balance sheet growth.
Non-interest income increased 6% to approximately $1.32 billion, underpinned by growth in fees and commissions from higher client activity and increased credit volumes, as well as a strong contribution from global markets trading revenues.
Operating expenses rose 4% to approximately $1.93 billion, nudging the cost-to-income ratio slightly higher to 53.4%.
Credit impairment charges declined 1% to approximately $436.72 million, contributing to an improvement in the credit loss ratio, which narrowed from 100 basis points to 94 basis points.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=531596
