South Africaâ€™s largest money lender, Absa Group Ltd announced on Thursday that full-year earnings might be lower than 2005â€™s performance, in spite of reported strong first half-year earnings.
Absa, whose main shareholder is UK based Barclays PLC, reported that earnings in the interim period had increased by 22.4 percent to $507-million (ZAR3,460 billion).
Earnings per share increased by 20 percent to 520.7 cents (1$=ZAR6.82), resulting from increased interest income and higher credit card activity.
â€œSome deceleration in advances growth is expected over the next six months owing to possible further increases in interest rates. This may lead to the rate of headline earnings growth being somewhat lower for the full year, Absa said in a statement.
The South African Reserve Bank hiked up interest rates on Thursday by half a percentage point to 8 percent in a bid to curb the countryâ€™s rising inflation and consumer debt.
This has resulted in Absa increasing its prime overdraft rate to 11.5 percent which will be effective as of Friday.