SOUTH African lender Absa reported an around 14-fold leap in half-year profit on Monday and restored dividend payments, benefiting from a massive drop in bad debt charges that spiked at the height of the coronavirus crisis last year.
Absa said its headline earnings per share – the main profit measure in South Africa – stood at 984.6 cents ($0.6685) in the six months to June 30, compared with just 67.7 cents reported a year earlier, in the middle of its forecast range. It said it would make an interim dividend payment of 310 cents.
The bank was starting to enjoy the benefits of a turnaround plan when the COVID-19 pandemic all but wiped out profit last year. That was followed by the shock departure of Chief Executive Daniel Mminele after just 15 months in the role.
Absa had already flagged earlier in August that it anticipated a massive jump in profits – also 7% higher than during the same period in 2019 – and had previously guided toward a return to dividends.
It is the last South African lender to restore shareholder payouts after suspending them on guidance from the central bank last year.
“These results are testimony to the decisions that we took during the crisis … taking a cautious approach to preserving capital and liquidity,” Jason Quinn, Absa’s interim chief executive, said in a statement.
He added Absa had renewed confidence its strategic choices were correct. A dispute over strategy triggered the exit of former CEO Mminele in April. The statement made no mention of Absa’s search for a new boss.
