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ABSA BANK LIMITED - ABSP - Unaudited interim results for the reporting period ended 30 June 2019 and interim preference share dividend

Release Date: 13/08/2019 07:09
Code(s): ABSP     PDF:  
 
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ABSP - Unaudited interim results for the reporting period ended 30 June 2019 and interim preference share dividend

Absa Bank Limited
Registration number: 1986/004794/06
Incorporated in the Republic of South Africa
JSE share code: ABSP
ISIN: ZAE000079810
Bond Issuer Code: BIABS
(“Absa Bank” or the “Company”)

Unaudited interim results for the reporting period ended 30 June 2019 and interim preference share
dividend

We are an African Bank, inspired by the people we serve and determined to be a bank that is globally
respected and that Africa can be proud of. We are committed to finding local solutions to uniquely local
challenges and everything we do focuses on adding value.

2019 priorities

To achieve sustained above-market growth, our immediate and highest priorities are to:
1. Gain market share in Retail and Business Banking South Africa (RBB SA) and better serve customers
across their life stages to retain them.
2. Deliver the Separation from Barclays PLC successfully in Corporate and Investment Bank (CIB)
through the right prioritisation of the 2019 change project portfolio.
3. Deepen our core Corporate and Investment Bank capabilities and expand our coverage model and
integrated transaction banking solutions.
4. Enhance digital customer enablement (full end-to-end self-service).
5. Drive an integrated bank assurance delivery model within our business, leveraging the capabilities
and resources of the Bank to deliver efficiencies.

Normalised financial results as a consequence of Barclays PLC separation

A normalised view of the 2019 interim results is provided which adjusts for the consequences of the
separation from Barclays PLC. This view better reflects the Bank’s underlying performance.

International Financial Reporting Standards (IFRS) compliant financial statements will continue to be
presented as required by the Companies Act and the JSE Limited (“JSE”) Listings Requirements and
include a reconciliation between the normalised and IFRS views. Normalised results will be presented
for future periods to the extent that the financial impact of the Separation is considered material.

Performance overview for the period ended 30 June

Total income
 2019                             Increase 2%       2018
 R26 065m                         IFRS              R25 445m

 2019                             Increase 5%       2018
 R25 980m                         Normalised        R24 857m

Headline earnings per ordinary share
 2019                             Increase 3%       2018
 953.6 cents                      IFRS              927.7 cents

 2019                             Decrease 3%       2018
 1 057.1 cents                    Normalised        1 087.2 cents

Basic earnings per share
 2019                             Increase 7%       2018
 947.1 cents                      IFRS              884.9 cents

 2019                             Increase 1%       2018
 1 050.4 cents                    Normalised        1 044.4 cents

Net asset value per ordinary share
 2019                              Increase 7%      2018
 18 035 cents                      IFRS             16 907 cents

 2019                             Increase 10%      2018
 16 183 cents                     Normalised        14 652 cents

Return on equity
 2019                             Decrease          2018
 11.0%                            IFRS              11.0%

 2019                             Decrease          2018
 13.7%                            Normalised        15.0%
Cost-to-income ratio
 2019                              Decrease       2018
 63.2%                             IFRS           64.4%

 2019                              Decrease       2018
 60.9%                             Normalised     60.5%

Net interest margin
 2019                              Decrease       2018
 3.48%                             IFRS           3.69%

 2019                              Decrease       2018
 3.46%                             Normalised     3.68%

Dividend per preference share
 2019                              Increase 2%    2018
 3 595.89 cents                    IFRS           3 542.67 cents

Strong loans and deposits
Loans and advances to customers
R770bn
(30 June 2018: R684bn)
Deposits due to customers
R659bn
(30 June 2018: R591bn)
Well managed Risk profile
Stage 3 loans ratio to gross loans and advances
4.59%
(30 June 2018: 5.09%)
Credit loss ratio
0.71%
(30 June 2018: 0.69%)
Sound capital
Common equity tier 1 ratio
12.2%
(30 June 2018: 13.5%)

Administrative information

This short-form announcement is the responsibility of the directors of Absa Bank. It is only a summary
of the information in the full announcement.

Any investment decisions by stakeholders should be based on consideration of the full announcement
published on https://www.absa.africa/absaafrica/investor-relations/jse-regulatory-announcements/
and on the following JSE link: https://senspdf.jse.co.za/documents/2019/jse/issh/ABSP/Interim19.pdf.

Copies of the full announcement may be requested from Absa Group Limited Investor Relations at
IR@absa.co.za.

Registered office
7th Floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001

Board of directors
Independent non-executive directors
C Beggs, A B Darko(1), M J Husain (Lead Independent Director), W E Lucas-Bull (Group Chairman), M S
Merson (2)

Executive directors
J P Quinn (Financial Director), R van Wyk (Chief Executive Officer)

(1) Ghanaian
(2) British

Declaration of interim preference share dividend number 27

Absa Bank non-cumulative, non-redeemable preference shares (Absa Bank preference shares)

The Absa Bank preference shares have an effective coupon rate of 70% of Absa Bank’s prevailing prime
overdraft lending rate (prime rate).Absa Bank’s current prime rate is 10.00%.

Notice is hereby given that preference dividend number 27, equal to 70% of the average prime rate for
1 March 2019 to 31 August 2019,on the assumption that there are no further changes in the prime rate
between the declaration date and 31 August 2019,per Absa Bank preference share has been declared
for the period 1 March 2019 to 31 August 2019. The dividend is payable on Monday,16 September 2019, 
to shareholders of the Absa Bank preference shares recorded in the Register of Members of the Company 
at the close of business on Friday, 13 September 2019.

The directors of Absa Bank confirm that the Bank will satisfy the solvency and liquidity test
immediately after completion of the dividend distribution.

Based on the average prime rate, the interim preference dividend payable for the period 1 March 2019
to 31 August 2019 would indicatively be 3595.89 cents per Absa Bank preference share, subject to any 
further change in the prime rate.

The dividend will be subject to dividends withholding tax at a rate of 20%. In accordance with
paragraphs 11.17(a)(i) to (ix) and 11.17(c) of the JSE Listings Requirements, the following additional
information is disclosed:
*The dividend has been declared out of income reserves.
*The local dividend tax rate is twenty per cent (20%).
*The gross local dividend amount is 3595.89 cents per preference share for shareholders exempt from
the dividend tax, subject to any change in the prime rate between the date of declaration and 31
August 2019.
*The net local dividend for shareholders subject to withholding tax at a rate of 20% amounts to
2876.712 cents per preference share, subject to any change in the prime rate between the date of
declaration and 31 August 2019.
*Absa Bank currently has 4 944 839 preference shares in issue.
*Absa Bank’s income tax reference number is 9575117719.

In compliance with the requirements of Strate, the electronic settlement and custody system used by
JSE, the following salient dates for the payment of the dividend are applicable:

 Last day to trade cum dividend                              Tuesday, 10 September 2019
 Shares commence trading ex-dividend                         Wednesday, 11 September 2019
 Record date                                                 Friday, 13 September 2019
 Payment date                                                Monday, 16 September 2019

Share certificates may not be dematerialised or rematerialised between Wednesday, 11 September
2019 and Friday, 13 September 2019, both dates inclusive. On Monday, 16 September 2019, the
dividend will be electronically transferred to the bank accounts of shareholders.

On behalf of the Board

N R Drutman
Company Secretary

Johannesburg
13 August 2019

Absa Bank Limited is a company domiciled in South Africa. Its registered office is 7th Floor, Absa
Towers West, 15 Troye Street, Johannesburg, 2001.

Sponsors
Independent sponsor
J. P. Morgan Equities South Africa Proprietary Limited

Joint sponsor
Absa Bank Limited (Corporate and Investment Bank)

Date: 13/08/2019 07:09:00
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