CEO of Absa Group Limited Maria Ramos. Picture: Nhlanhla Phillips/African News Agency/ANA

DURBAN - Absa Group, formerly known as Barclays Africa, reported an 8 percent increase in normalised earnings to R8 billion for the six months to June, boosted by growth in the group’s retail and business banking business in South Africa, its banking business outside of South Africa, and in the wealth, investment management and insurance unit.

The group said this was partially offset by a 6 percent decrease in earnings from the group’s corporate and investment banking business in South Africa.

The group reported its first set of financial results as Absa Group after being renamed on July 11 after it separated from the international Barclays Plc group.

Revenue increased by 3 percent to R37bn while diluted headline earnings a share also increased by 3 percent, 5 percent on a constant currency basis, to 949.5 cents a share.

Operating expenses were up by 4 percent to R20.8bn and cost-to-income ratio deteriorated slightly to 56.2 percent.

The group increased declared an interim dividend of 490c a share, up by 3 percent as compared to last year’s 475c.

Chief financial director Jason Quinn said: “Our performance was in line with our guidance and should be considered against the tough macro backdrop in South Africa.”

The group said South Africa, which accounts for more than three-quarters of the group’s total earnings, recorded a 2.2 percent contraction in gross domestic product in the first quarter.

RBB South Africa credit impairments decreased 6 percent to R2.73bn, resulting in a 1.15 percent credit loss ratio from 1.28 percent.

Retail Banking South Africa credit impairments declined 7 percent to R2.52bn, reducing its credit loss ratio to 1.24 percent from 1.39 percent.

Home Loans’ charge fell 61 percent to R181m. Card and Payments' credit loss ratio declined to 4.23 percent from 5.36 percent and Vehicle and Asset Finance credit impairments grew 25 percent to R594m.

The share price declined by 2.42 percent to R167.10 a share on the JSE after the release of the results.