Consumers were already struggling to adjust to rapid interest rate rises that have led banks to increase their prime lending rate. It is expected to reach 11% next month. "It's not the actual rate that worries us, it's just that consumers need to adapt their monthly repayments quite quickly," he said.
Quinn said the biggest impact of blackouts was on small and medium enterprises as, unlike big corporations, they do not have the financial and operational wherewithal to set up renewable power to maintain production. If they fail, their employees lose their jobs and are unable to meet repayments on loans. For the year ending Dec. 31, Absa reported a 13% rise in its headline earnings per share, a profit measure, to 2,486 South African cents. For the coming year, it guided for a marginal increase in its 2023 return on equity (RoE) to around 17%, and for high single-digit revenue growth against 15% growth reported for last year.
The lender posted RoE - a metric of profitability used to compare banks - of 16.6%, up from 15.8% a year ago, and declared a dividend of 1,300 cents per share. Bank shares fell globally on Monday following Silicon Valley Bank's collapse. (Reporting by Promit Mukherjee; Editing by Christopher Cushing, Subhranshu Sahu and Barbara Lewis)
