FirstRand sees business subdued after H1 profit drops
JOHANNESBURG, (Reuters)
South Africa's FirstRand FSRJ.J 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 percent to 85.3 cents from 87.3 cents a year-ago.
Overall impairments fell 13 percent to 3.2 billion rand ($433.3 million) and the group's credit loss ratio stood at 1.52 percent of advances. While FirstRand said retail bad debts had peaked, it expects the corporate sector to remain under strain.
FirstRand's rivals, Absa ASAJ.J, Nedbank NEDJ.J and Standard Bank SBKJ.J 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.
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