Absa will pay special dividend after deal

File photo: Simphiwe Mbokazi

File photo: Simphiwe Mbokazi

Published Jul 30, 2013

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Johannesburg - Absa Group, the South African bank controlled by Barclays, said it will pay a special dividend as first-half profit rose 13 percent and it completed plans to buy most of the UK bank’s African operations.

The special dividend for the six months through June amounts to R7.08 per share, while net income for the period rose to R4.7-billion from R4.17-billion a year earlier, the Johannesburg-based lender said in a statement on Tuesday.

Earnings per share excluding one-time items rose eight percent to R6.50, less than the median estimate of R7.08 by four analysts in a Bloomberg survey.

“Improved credit impairments, particularly in retail mortgages and commercial property finance, were the main reasons for higher earnings,” the banks said in the statement. “An interim dividend per share of 350 cents, and a special dividend of 708 cents were declared after considering regulatory changes, the group’s strong capital position, strategic plans and near- term business objectives.”

Absa in December said it would buy the bulk of Barclays’ African assets in an all-share deal worth R18.3-billion.

“We expect mid-single digit loan growth this year and a broadly stable net interest margin,” Absa said.

Absa is the second-worst performing stock on the six-member FTSE/JSE Africa Banks Index after Standard Bank Group, having dropped 7.5 percent to R151.67 this year. - Bloomberg

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