FirstRand expects business volumes to remain subdued after posting lower first-half profit as bad debts continue to hurt its corporate unit.
The banking group said on Tuesday diluted headline earnings per share for the six months to end December fell 2% to 85,3 cents from 87,3 cents a year ago.
Overall impairments fell 13% to R3,2-billion and the group’s credit-loss ratio stood at 1,52% of advances. While FirstRand said retail bad debts had peaked, it expects the corporate sector to remain under strain.
FirstRand’s rivals, Absa, Nedbank and Standard Bank have all reported lower 2009 profit as credit-squeezed customers pushed bad debts up.
However, local banks have remained relatively well capitalised throughout the economic crisis and are keen to expand their presence elsewhere on the African continent.
FirstRand, the first foreign bank to confirm it is interested in buying one of Nigeria’s troubled banks, also highlighted Zambia, Mozambique, Tanzania and Angola as key markets. — Reuters