ABSA Bank SA has anticipated losing its revenue growth owing to Ghana’s sovereign debt crisis, regardless of life insurance revenue growth boosting its profits.
That notwithstanding, the bank expects earnings per share to soar between 12% to 18% to reach between 2,396 cents and 2,525 cents per share.
“Excluding the impairment charges on Ghana’s sovereign-related exposures, our normalized Heps (Headline earnings per share) for 2022 is expected to increase by more than 20%.”ABSA
The South African lender anticipates a double-digit increase in earnings for the 2022 fiscal year, despite the impact of Ghana’s sovereign debt crisis on its financial performance.
The big six bank announced that it expects to report a 10% to 15% rise in its headline earnings per share (Heps) for the current reporting year, with an estimated range of 2,362 cents to 2,469 cents per share, surpassing the previous year’s results.
In the face of Ghana’s current major sovereign debt challenges, the banking group was able to boost its profits. The highly indebted West African nation has been under heightened economic pressure and has failed to make significant payments on its Eurobonds and commercial loans.
In 2022, Ken Ofori-Atta, Ghana’s Finance Minister, announced its government’s plan to restructure its debt through the Domestic Debt Exchange Programme (DDEP) to enable it bring its debt to sustainable levels. The debt exchange plans would see GHc137.3 billion Ghanaian cedis value of bonds exchanged for new ones, its finance ministry said in a statement.
As a result, today, Friday, February 17th, 2023, ABSA said it expects an uptick in credit impairments.
“With greater certainty on the terms of the proposed debt exchange programme with the Ghana sovereign, we expect our credit impairments to increase significantly year-on-year, mainly due to impairments on sovereign investment securities and related exposures in the banking book.”ABSA
The banking group managed to increase its profits amidst Ghana’s significant sovereign debt challenges. The West African nation, which is currently struggling with high levels of indebtedness has caused the bank increased economic pressure and missed payments on its Eurobonds and commercial loans.
“Consequently, our 2022 cost-to-income ratio is expected to improve noticeably to the low 50s, in line with the first half 2022 ratio.”ABSA
ABSA’s Outstanding Accomplishments Amidst The Crisis
ABSA Bank Ghana, despite the economic turmoils seems to be fairing well as opposed to its parent company at SA. ABSA Bank Ghana is being recognized for its great feats in the industry. Recently, the Bank was ranked from KPMG’s Banking Industry Customer Experience Survey as among the top three banks in Ghana, highly noticed for customer satisfaction.
The survey highlighted several key areas of strength for the bank making it stand out among others. These areas identified include: empathy, personalization, time and effort, exceeding expectations, integrity, resolution and the act of providing support to both prospective and existing customers, most especially, illiterates.
ABSA again, recently as part of bringing the possibilities of its customers to life, has redefined its manual account opening process by introducing digital account opening.
“We are always listening and innovating to meet the needs of our new and existing customers. The pandemic taught banks a lot of things…The age of ‘branchless banking’ is here and our digital account opening platform, highlights the extent we are willing to go to make their lives better and more comfortable.”Charles Addo, ABSA Bank Ghana Retail Banking Director