Absa feels the Covid-19 pinch as earnings topple

Absa, one of South Africa’s leading financial institutions, has notified investors that earnings are likely to fall by more than half when compared to the prior period. This doesn’t come as much of a surprise, given the substantial expected credit loss provisions that all the big banks have accounted for as a result of the pandemic. The banking sector has seen a sharp recovery in the last few months, after being dealt one of the slower recoveries post the Covid-19 induced sell-off in March of last year. Banking expert, Kokkie Kooyman, still sees value in the industry at current share prices as he outlines his investment thesis in the podcast below. – Justin Rowe-Roberts

Absa SENS statement:

Trading statement for the year ended 31 December 2020

In accordance with section 3.4(b) of the JSE Listings Requirements, and updating Absa Group’s trading statement published on 19 November 2020, shareholders are advised that there is more certainty regarding our financial results for the year ended 31 December 2020 and we are able to provide a narrower earnings range. Moreover, the trends set out in our previous trading statement remain relevant.

Read also: Big four bank bosses not feeling festive cheer; Absa warns profits could plunge 40%

Absa Group’s IFRS headline earnings per share (HEPS) and earnings per share for the year ended 31 December 2020 are expected to decline by 55% to 60% from the 2019 comparatives of 1750.1 cents and 1717.6 cents, respectively. Normalised HEPS for the period is expected to decrease by 50% to 55% from the 1926.0 cents in 2019.

The Group expects to release its financial results for the year ended 31 December 2020 on 15 March 2021.

Visited 622 times, 1 visit(s) today