JOHANNESBURG, Feb 17 (Reuters) - Absa Group Ltd , South Africa's third-biggest lender by assets, said on
Friday its full-year profit was likely to rise 10% to 15%,
driven by strong growth on the back of high interest rates.
The bank expects normalised headline earnings per share,
which strips out exceptional and non-recurring items, of between
24.17 rand ($1.32) and 25.27 rand for the year ending Dec. 31.
Absa also forecast a "substantial pre-provision profit
growth in the mid-20s" for the full year.
South African lenders, one of the biggest in the continent,
had a good run last year, but a worsening operating environment
in the country, primarily due to frequent rolling blackouts have
dampened the mood for continued strong growth.
Increasing interest rates have also led to worries of bank
loans going sour in a country jostling with high unemployment
and anaemic growth.
Absa, which has over 80% of its assets in South Africa, said
considering its strong Tier 1 capital ratio, a measure of a
bank's financial strength and ability to absorb losses, it could
increase its dividend payout ratio to at least 50% for the year.
However its credit impairments, recognised as a loss in the
financial statement, will increase significantly due to its
exposure to sovereign loans to Ghana, Absa said, without
revealing the extent of the losses.
The company is scheduled to announce its full-year earnings
on March 13.
($1 = 18.2738 rand)
(Reporting by Promit Mukherjee; Editing by Shounak Dasgupta)
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