Absa Group, a South Africa-based financial services conglomerate run by prominent banking executive Jason Quinn, is on track to pay out a dividend of R7.85 ($0.519) per share, the group’s first in the post-pandemic period, as earnings exceed pre-pandemic levels.
The dividend issued by the group’s board of directors is linked to the group’s strong financial performance at the conclusion of its 2021 fiscal year.
According to the group’s financial report, its headline earnings climbed by 195.2 percent from R6.04 billion ($399.3 million) in 2020 to R17.83 billion ($1.18 billion), which is much higher than its pre-COVID-19 level of R16.3 billion ($1.08 billion) in 2019.
The triple-digit percent increase in earnings was fueled mostly by the economy’s recovery, as well as management initiatives implemented by Quinn, which achieved predicted results for the leading lender.
These effective strategies resulted in substantial pre-provision profit growth for the bank, as well as decreased impairments, with the group’s credit impairment losses falling by 59 percent from R20.57 billion ($1.36 billion) in 2020 to R8.5 billion ($562.1 million).
Upon the conclusion of the reporting period, the group’s total assets rose by seven percent, from R1.53 trillion ($101.2 billion) to R1.64 trillion ($108.5 billion), representing an eight-percent increase in net loans and advances and a 23-percent increase in investment securities, as excess liquidity was deployed in treasury bills.
The group’s successful treasury policies also helped its liquidity sources grow by 16 percent to R301 billion ($20 billion), equivalent to 28 percent of client deposits, as deposits due to consumers increased by double digits.
While discussing financial results, Quinn stated that the group more than doubled headline earnings in 2021 as the economy rebounded quicker than predicted and credit losses were reduced.
As of March 15, the group’s shares were trading at R175.16 ($11.59), 1.3-percent lower than their opening price on the Johannesburg Stock Exchange.
Absa Group’s market capitalization is R150 billion ($9.93 billion) at the current share price.