Absa Fails to Impress

The recently rebranded Business Day TV satellite link bombed this morning, and was initially unable to transmit CEO Maria Ramos’ presentation of the latest Absa interim results, leading to a delay in the event, to which many had battled through rush-hour traffic. Maybe this was a service to the viewers, as the heavily-scripted and wooden presentation lacked lustre. The numbers were not awful, with headline earnings up 8%, and there was a special dividend of 708 cents a share. Bad debts seem more under control, but are still a concern. The outlook is cautious. The market, however, was not impressed with the results, and the share price slumped. Parent Barclays will no doubt welcome the dividend flow. There was some talk of how Absa is combining forces with Barclays to become what it calls Africa’s Go-To bank. They seem to think this is a great catch phrase, but it doesn’t rattle my cage. And the much anticipated re-branding is now to happen. Bye bye Absa: hello Barclays Africa Group on the JSE. But the high street Absa brand remains in SA Finally, it was a bit absurd for Ramos to thank Barclays for help in launching the Absa app – as they are well behind the pack in an innovation which could and should have been developed in SA under more tech savvy management?…..What did our experts make of the results?

Ron Klipin of Cratos Wealth

The results were very disappointing and below expectations. The presentation and outlook was very subdued. Operating conditions are very challenging going ahead. Barclays Africa will prove to be a major growth area, but this will take a lot of time and a lot of investment. Their lending book growth has been subdued because of concern about the economy.

Independent analyst Ian Cruickshanks

This was disappointing. There could have been more warning to the market. I think they must retain the strong brand in South Africa. They are doing the right things, but have woken up late. Is this because Barclays took too long to put their mark on Absa’s African strategy? Will Barclays be milking SA performance to feed the Barclays group, which needs the money?

Lavan Gopaul. 28E Capital

Ten years after the Barclays Absa ’merger’ I have yet to see the value add – of the Africa connection and the promised synergies of corporate banking that we were led to expect. The payment of the special dividend is an admission of not being able to place capital during a period post the National Credit Act which made lending in SA very difficult…


Bankers are not required to be interesting, but with strict parent Barclays pulling the strings from London, there is a much room for improvement in presentation and performance.

Tweet of the day:

Denis Leary (@denisleary): Pope to gays: I accept you. Gays to Pope: bring back the red Prada shoes.

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