First thing this morning, Absa published its earnings. And the market’s punished the share all day.
The share price closed just over 7% down.
Let’s take a look at the results…
The bank expects its “loan income to remain under pressure,” says Fin24
. This is due to the dwindling “demand for credit” as the economy struggles.
EPS grew “8% to R6.50,” notes IOL
. Analysts expected EPS to be more in line with R7.08, according to a survey by Bloomberg.
Headline EPS, at 8%, was way off an expected 18% increase, Ryan Wibberley, head of equity dealing at Investec’s Asset Management, told iAfrica
Absa’s much anticipated special dividend was lower than expected too, coming in at R7.08, notes iAfrica
. The interim dividend came in at R3.50, up 11% for the same period last year.
So it appears Absa disappointed on many fronts with its results.
As of Friday, Absa is Barclays Africa
The bank also said it wasn’t looking for “more big acquisitions,” notes BDLive
. This follows Absa buying Edcon’s loan book and “closing the acquisition of eight Barclays Africa operations last week
And don’t forget, from Friday, Barclays Africa is the new name for Absa on the JSE.
Absa’s parent company, Barclays also had a bad day on the market.
The British bank is to issue new shares to try and fill a “capital shortfall created by new regulatory demands,” says the BBC
. The new shares should raise about R84 billion, but Barclays need about R186 billion to “plug” the shortfall.
Barclays’ shares closed the day nearly 6% lower.
Let’s see if Absa can claw back some of its losses tomorrow.