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JSE ABSP
ABSP
ABSP - ABSA Bank Limited - Profit and dividend announcement, unaudited interim
financial results for the six months ended 30 June 2008
ABSA BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1986/004794/06)
ISIN: ZAE000079810
JSE share code: ABSP
(Absa Bank, the Bank or the Company)
ABSA BANK: PROFIT AND DIVIDEND ANNOUNCEMENT
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
BANK SALIENT FEATURES
Six months ended Year ended
30 June 31
December
2008 2007* Change 2007
(Unaudited (Unaudited % (Audited)
) )
Income statement (Rm)
Headline earnings** 3 746 3 371 11,1 7 476
Profit attributable to 4 359 3 360 29,7 7 620
ordinary equity holder of the
Bank
Balance sheet (Rm)
Total assets 685 027 508 563 34,7 587 059
Loans and advances to 474 081 406 301 16,7 443 120
customers
Deposits due to customers 339 186 286 422 18,4 304 877
Financial performance (%)
Return on average equity 21,6 25,3 26,4
Return on average assets 1,11 1,45 1,48
Operating performance (%)
Net interest margin on 3,17 3,48 3,54
average
assets
Net interest margin on 3,62 3,69 3,82
average
interest-bearing assets
Impairment losses on loans 0,94 0,49 0,54
and
advances as % of average
loans and
advances to customers
Non-interest income as % of 44,7 43,0 41,5
total
operating income
Cost-to-income ratio 50,3 55,7 54,2
Effective tax rate -
excluding 25,2 29,3 29,2
indirect taxation
Share statistics (million)
(including "A" ordinary
shares)
Number of shares in issue 359,1 337,3 337,3
Weighted average number of 350,0 337,3 337,3
shares
Weighted average diluted 350,0 337,3 337,3
number of
shares
Share statistics (cents)
Earnings per share 1 245,5 996,1 25,0 2 259,4
Diluted earnings per share 1 245,5 996,1 25,0 2 259,4
Headline earnings per share 1 070,4 999,6 7,1 2 216,4
Diluted headline earnings per 1 070,4 999,6 7,1 2 216,4
share
Dividends per ordinary share 315,6 465,9 (32,3) 789,8
relating to income for the
period/year
Dividend cover (times) 3,4 2,1 2,8
Net asset value per share 9 415 8 315 13,2 9 149
Tangible net asset value per 9 346 8 241 13,4 9 081
share
Capital adequacy (%)***
Absa Bank 13,5 12,9 12,5
*The comparatives for the six months ended 30 June 2007 have been reclassified
for certain assets and liabilities, interest as well as IFRS 7
reclassifications. The comparatives have been reclassified throughout. See
section on "Reclassifications" below.
**After allowing for R220 million (June 2007: R114 million) profit attributable
to preference equity holders of the Bank.
***June 2007 and December 2007 reflect Basel I numbers as previously published.
BANK INCOME STATEMENT
Six months ended Year ended
30 June 31
December
2008 2007 2007
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Net interest income 9 642 8 098 19,1 17 915
Interest and similar 33 518 23 399 43,2 52 213
income
Interest expense and (23 876) (15 301) (56,0) (34 298)
similar charges
Impairment losses on loans and (2 115) (943) >(100,0) (2 207)
advances
Net interest income after 7 527 7 155 5,2 15 708
impairment losses on loans and
advances
Net fee and commission income 5 284 4 900 7,8 10 155
Fee and commission income 5 641 5 216 8,1 10 729
1.1
Fee and commission (357) (316) (13,0) (574)
expense
Gains and losses from banking 1 462 837 74,7 1 536
and trading activities
1.2
Gains and losses from 27 38 (28,9) 108
investment activities
1.3
Other operating income 1 028 325 >100,0 897
Operating income before 15 328 13 255 15,6 28 404
operating expenditure
Operating expenditure (9 237) (8 353) (10,6) (17 286)
Operating expenses (8 766) (7 913) (10,8) (16 584)
2.1
Non-credit related (0) (28) 99,9 (58)
impairments 2.2
Indirect taxation (471) (412) (14,3) (644)
Share of retained earnings 30 15 100,0 85
from associated undertakings
and joint venture companies
Operating profit before income 6 121 4 917 24,5 11 203
tax
Taxation expense (1 542) (1 443) (6,9) (3 267)
Profit for the period/year 4 579 3 474 31,8 7 936
Attributable to:
Ordinary equity holder of the 4 359 3 360 29,7 7 620
Bank
Preference equity holders of 220 114 (93,0) 313
the Bank
Minority interest 0 0 - 3
4 579 3 474 31,8 7 936
Headline earnings 3 3 746 3 371 11,1 7 476
NOTES TO THE INTERIM FINANCIAL RESULTS
1. NON-INTEREST INCOME
Six months ended Year ended
30 June 31
December
2008 2007 2007
(Unaudited (Unaudited) Change (Audited)
)
Rm Rm % Rm
1.1 Fee and commission income
Credit-related fees and 5 047 4 528 11,5 9 557
commission
Cheque accounts 1 421 1 212 17,2 2 536
Credit cards 746 788 (5,3) 1 543
Early redemption penalty 93 114 (18,4) 187
income
Electronic banking 1 378 1 226 12,4 2 657
Foreign exchange fees and
commissions 143 121 18,2 325
Savings accounts 1 004 847 18,5 1 795
Other 262 220 19,1 514
Project finance fees 170 214 (20,6) 515
External administration fees 127 168 (24,4) 246
Commission received 282 295 (4,4) 383
Portfolio and other management 11 5 >100,0 16
fees
Unit and property trust income 4 6 (33,3) 12
5 641 5 216 8,1 10 729
1.2 Gains and losses from
banking and trading activities
Net gains on investments 408 414 (1,4) 856
Fair value through profit 402 412 (2,4) 855
and loss
Available-for-sale - 2 (100,0) -
Loss on disposal of and
dividend income from
associated undertakings and 6 - 100,0 1
joint venture companies
Net trading income 797 603 32,2 1 076
Economic hedges 267 (139) >100,0 (382)
Other (including ineffective (10) (41) 75,6 (14)
hedges)
1 462 837 74,7 1 536
1.3 Gains and losses from
investment activities
Fair value through profit and
loss
Investment gains 27 21 28,6 69
Dividend income from
associated undertakings and
joint venture companies - 3 (100,0) 3
Profit realised on disposal of
subsidiary - 14 (100,0) 36
27 38 (28,9) 108
2. OPERATING EXPENDITURE
Six months ended Year ended
30 June 31
December
2008 2007 2007
(Unaudited (Unaudited) Change (Audited)
)
Rm Rm % Rm
2.1 Operating expenses
Amortisation on intangible 43 10 >(100,0 63
assets )
Audit fees 33 43 23,3 53
Barclays synergy costs - 300 100,0 675
Cash transportation 151 127 (18,9) 268
Depreciation 390 369 (5,7) 743
Equipment rental and 108 19 >(100,0 258
maintenance )
Information technology 624 549 (13,7) 1 034
Lease rentals on operating 391 421 7,1 755
leases
Marketing costs 475 415 (14,5) 856
Other operating costs 731 547 (33,6) 1 212
Other professional fees 469 273 (71,8) 843
Printing and stationery 135 121 (11,6) 276
Staff costs 4 886 4 427 (10,4) 8 936
Telephone and postage 330 292 (13,0) 612
8 766 7 913 (10,8) 16 584
2.2 Non-credit related
impairments
Computer software development - 28 100,0 21
costs
Repossessed Properties 0 - (100,0) 37
0 28 99,9 58
3. DETERMINATION OF HEADLINE EARNINGS
Six months ended Year ended
30 June 31
December
2008 2007 2007
(Unaudited (Unaudited) Change (Audited)
)
Rm Rm % Rm
Headline earnings* is
determined as follows:
Profit attributable to
ordinary equity holder of the 4 359 3 360 29,7 7 620
Bank
Adjustments for:
IAS 16 net profit on
disposal of property and (26) (11) >(100,0 (57)
equipment )
IAS 21 recycled foreign
currency translation reserve,
disposal of investment in - - - (38)
foreign operations
IAS 27 net profit on
disposal of subsidiaries - (10) 100,0 (26)
IAS 28 and 31 net loss on
disposal of associated
undertakings and joint venture - - - 6
companies
IAS 28 underlying
associated undertakings and
joint ventures companies` (11) (8) (37,5) (45)
earnings
IAS 38 profit on disposal
and impairment of intangible (636) 20 >(100,0 (43)
assets )
IAS 39 release of
available-for- sale reserves 60 20 >100,0 59
Headline earnings 3 746 3 371 11,1 7 476
*The net amount is reflected after taxation and minority interest.
BANK BALANCE SHEET
30 June 31
December
2008 2007 2007
(Unaudited (Unaudited) Change (Audited)
Rm Rm % Rm
Assets
Cash, cash balances and 14 575 12 136 20,1 15 069
balances
with central banks
Statutory liquid asset 27 962 20 755 34,7 22 957
portfolio
Loans and advances to banks 60 303 17 681 >100,0 52 691
Trading assets 62 150 17 577 >100,0 25 876
Hedging assets 2 032 795 >100,0 725
Other assets 17 359 15 964 8,7 5 002
Current tax assets 528 25 >100,0 168
Non-current assets classified
as held-for-sale 2 254 - 100,0 -
Loans and advances to 474 081 406 301 16,7 443 120
customers
Loans to Absa Group companies 10 313 7 349 40,3 8 308
Loans to holding company 1 461 1 171 24,8 1 130
Deferred tax assets 55 84 (34,5) 48
Investments 5 300 3 930 34,9 6 109
Investments in associated
under- takings and joint 1 620 754 >100,0 1 370
venture companies
Intangible assets 242 250 (3,2) 228
Property and equipment 4 792 3 791 26,4 4 258
Total assets 685 027 508 563 34,7 587 059
Liabilities
Deposits from banks 70 435 28 594 >100,0 65 167
Trading liabilities 55 184 17 717 >100,0 22 947
Hedging liabilities 4 815 2 993 60,9 2 226
Other liabilities and sundry 22 926 16 263 41,0 10 113
provisions
Current tax liabilities 3 345 (99,1) 56
Deposits due to customers 339 186 286 422 18,4 304 877
Debt securities in issue 142 295 112 024 27,0 134 023
Deferred tax liabilities 1 583 1 789 (11,5) 2 259
Policyholder liabilities
under 62 70 (11,4) 67
insurance contracts
Borrowed funds 10 935 9 796 11,6 9 796
1
Total liabilities 647 424 476 013 36,0 551 531
Equity
Capital and reserves
Attributable to equity holders
of the Bank:
Share capital 303 303 - 303
Share premium 9 415 5 415 73,9 5 415
Preference share capital 1 1 - 1
Preference share premium 4 643 4 504 3,1 4 643
Other reserves (84) 1 757 >(100,0 1 605
)
Retained earnings 23 315 20 569 13,4 23 535
37 593 32 549 15,5 35 502
Minority interest 10 1 >100,0 26
Total equity 37 603 32 550 15,5 35 528
Total equity and liabilities 685 027 508 563 34,7 587 059
Contingent liabilities - 54 128 54 909 (1,4) 53 464
banking related
NOTES TO THE INTERIM FINANCIAL RESULTS
BORROWED FUNDS
30 June 31
December
2008 2007 2007
(Unaudited (Unaudited) Change (Audited)
)
Rm Rm % Rm
Subordinated callable notes
14,25% (AB02) 3 100 3 100 - 3 100
10,75% (AB03) 1 100 1 100 - 1 100
3-month JIBAR + 0,75% (AB04) 400 400 - 400
8,75% (AB05) 1 500 1 500 - 1 500
8,10%(AB06) 2 000 2 000 - 2 000
8,80% (AB07) 1 725 1 725 - 1 725
3-month JIBAR + 0,97% (6.25% 890 - 100,0 -
Nacs)
3-month JIBAR + 0,97% (6.25% 104 - 100,0 -
Nacs)
3-month JIBAR + 0,97% (3.97% 86 - 100,0 -
Nacs)
3-month JIBAR + 1.20% (6.25% 266 - 100,0 -
Nacs)
3-month JIBAR + 1,00% (6.25% 179 - 100,0 -
Nacs)
Accrued interest 328 299 9,7 297
Fair value adjustment* (743) (328) >(100,0 (326)
)
10 935 9 796 11,6 9 796
*The fair value adjustment relates to subordinated callable notes designated as
hedged items in a hedging relationship.
BANK STATEMENT OF CHANGES IN EQUITY
30 June 31
December
2008 2007 2007
(Unaudited (Unaudited) Change (Audited)
)
Rm Rm % Rm
Share capital 303 303 - 303
Opening balance 303 303 - 303
Shares issued 0 - 100,0 -
Share premium 9 415 5 415 73,9 5 415
Opening balance 5 415 5 415 - 5 415
Shares issued 4 000 - 100,0 -
Preference share capital 1 1 - 1
Opening balance 1 1 - 1
Shares issued - 0 (100,0) 0
Preference share premium 4 643 4 504 3,1 4 643
Opening balance 4 643 2 991 55,2 2 991
Shares issued - 1 518 (100,0) 1 658
Costs incurred - (5) 100,0 (6)
Other reserves (84) 1 757 >(100,0 1 605
)
Opening balance 1 605 1 682 (4,6) 1 682
Movement in foreign currency
translation reserve 105 45 >100,0 (53)
Movement in regulatory general
credit risk reserve (430) 400 >(100,0 381
)
Movement in available-for-sale
reserve (15) 17 >(100,0 61
)
Movement in cash flow hedges (1 409) (437) >(100,0 (540)
reserve )
Movement in associated
undertakings and joint
ventures companies` retained 30 15 100,0 85
earnings reserve
Share-based payments for the 51 55 (7,3) 75
period/year
Transfer from share-based
payments reserve (21) (20) (5,0) (86)
Retained earnings 23 315 20 569 13,4 23 535
Opening balance 23 535 18 334 28,4 18 334
Transfer to regulatory
general credit risk reserve 430 (400) >100,0 (381)
Transfer to associated
undertakings and joint venture
companies` retained earnings (30) (15) (100,0) (85)
reserve
Transfer from share-based
payments 21 20 5,0 86
reserve
Profit attributable to
ordinary equity holder 4 359 3 360 29,7 7 620
Profit attributable to
preference equity holders 220 114 93,0 313
Dividends paid during the
period/year (5 220) (844) >(100,0 (2 352)
)
37 593 32 549 15,5 35 502
Minority interest 10 1 >100,0 26
Opening balance 26 0 >100,0 0
Acquisition of subsidiary - - - 25
Other reserve movements (16) 1 >(100,0 (2)
)
Minority share of profit 0 0 - 3
Total equity 37 603 32 550 15,5 35 528
GROUP CASH FLOW STATEMENT
Six months ended Year ended
30 June 31
December
2008 2007 2007
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Net cash (utilised)/generated (805) (2 822) 71,5 4 732
from operating activities
Net cash utilised from (1 668) (500) >(100,0) (4 234)
investing activities
Net cash generated from 305 2 394 (87,3) 1 025
financing activities
Net (decrease)/increase in (2 168) (928) >(100,0) 1 523
cash and cash equivalents
Cash and cash equivalents at 5 023 3 498 43,6 3 498
the beginning of the
period/year 1
Effect of exchange rate (2) 1 >(100,0) 2
movements on cash on cash
equivalents
Cash and cash equivalents at 2 853 2 571 11,0 5 023
the end of the period/year
2
NOTES TO THE CASH FLOW
STATEMENT
1 Cash and cash equivalents
at the
beginning of the
period/year
Cash, cash balances and
balances 4 673 3 619 29,1 3 619
with central banks
Loans and advances to banks 350 (121) >100,0 (121)
5 023 3 498 43,6 3 498
2 Cash and cash equivalents
at the
end of the period/year
Cash, cash balances and
balances 2 790 2 393 16,6 4 673
with central banks
Loans and advances to banks 63 178 (64,6) 350
2 853 2 571 11,0 5 023
PROFIT CONTRIBUTION BY BUSINESS AREA
Six months ended Year ended
30 June 31 December
2008 2007* 2007*
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Banking operations
Retail banking 1 942 2 066 (6,0) 4 944
Absa Wealth 15 22 (31,8) 46
Retail Bank 1 117 873 27,9 2 341
Absa Home Loans 319 581 (45,1) 1 287
Absa Card 258 330 (21,8) 706
Absa Vehicle and Asset 233 260 (10,4) 564
Finance
Absa Corporate and Business 999 853 17,1 1 981
Bank
Absa Capital 866 657 31,8 1 533
Corporate centre 785 20 >100,0 (140)
1 & 2
Capital and funding centre (13) 90 >(100,0) 94
Total earnings from business 4 579 3 686 24,2 8 412
areas
Synergy costs (after tax) - (212) 100,0 (479)
3
Profit attributable to
preference equity holders (220) (114) (93,0) (313)
Profit attributable to
ordinary equity holder 4 359 3 360 29,7 7 620
Headline earnings adjustments (613) 11 >(100,0) (144)
Total headline earnings 3 746 3 371 11,1 7 476
REVENUE CONTRIBUTION BY BUSINESS AREA
Six months ended Year ended
30 June 31 December
2008 2007* 2007
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Banking operations
Retail banking 11 911 9 549 24,7 20 710
Absa Wealth 143 118 21,2 251
Retail Bank 7 508 5 415 38,7 11 784
Absa Home Loans 1 789 1 712 4,5 3 881
Absa Card 1 296 1 181 9,7 2 466
Absa Vehicle and Asset 1 175 1 123 4,6 2 328
Finance
Absa Corporate and Business 3 476 3 166 9,8 6 687
Bank
Absa Capital 2 147 1 425 50,7 3 595
Corporate centre (208) 18 >(100,0) (484)
1 & 2
Capital and funding centre 117 40 >100,0 103
Total revenue 17 443 14 198 22,9 30 611
NOTES
African operations have been moved to Corporate centre during the period under
review.
In the current year Corporate centre includes the profit on VISA IPO shares.
Synergies relate to the integration of Absa and Barclays following the
acquisition by Barclays of a majority share in Absa. Synergy costs are one-off
costs incurred in achieving synergy benefits.
The comparative periods have been restated for:
Absa Development Company Holdings (Proprietary) Limited was moved from Corporate
centre to Absa Corporate and Business Bank in August 2007. The June 2007
position has been restated to reflect this.
Commercial Asset Finance was moved from Retail banking to Absa Corporate and
Business Bank during the period under review.
Properties in Possession was moved from Retail banking to Corporate centre
during the period under review.
Group Payment Systems was moved from Corporate centre to Retail banking during
the period under review. The December 2007 position has been restated to reflect
this.
RECLASSIFICATIONS
BANK BALANCE SHEET
Reclassification of certain assets and liabilities
30 June 30 June
2007 2007
(Unaudited) (Unaudited)
(As Reclassi-
previously
Rm Commentar reported) fication (Restated)
y s
Assets
Cash, cash balances and
balances with central banks 12 136 - 12 136
Statutory liquid asset
portfolio 20 755 - 20 755
Loans and advances to banks 17 681 - 17 681
Trading assets 17 577 - 17 577
Hedging assets 795 - 795
Other assets 15 989 (25) 15 964
Current tax assets - 25 25
Non-current assets
classified as held-for-sale - - -
Loans and advances to 1 407 359 (1 058) 406 301
customers
Loans to Absa Group 7 349 - 7 349
companies
Loans to holding company 1 171 - 1 171
Deferred tax assets 84 - 84
Investments 1 2 872 1 058 3 930
Investments in associated
undertakings and joint
venture companies 754 - 754
Intangible assets 250 - 250
Property and equipment 3 791 - 3 791
Total assets 508 563 - 508 663
Liabilities
Deposits from banks 28 594 - 28 594
Trading liabilities 17 717 - 17 717
Hedging liabilities 2 993 - 2 993
Other liabilities and
sundry 16 263 - 16 263
provisions
Current tax liabilities 345 - 345
Deposits due to customers 286 422 - 286 422
Debt securities in issue 112 024 - 112 024
Deferred tax liabilities 1 789 - 1 789
Policyholder liabilities -
under 70 70
insurance contracts
Borrowed fund 9 796 - 9 796
Total liabilities 476 013 - 476 013
Equity
Capital and reserves
Attributable to equity
holder of the Bank:
Share capital 303 - 303
Share premium 5 415 - 5 415
Preference share capital 1 - 1
Preference share premium 4 504 - 4 504
Other reserves 1 757 - 1 757
Retained earnings 20 569 - 20 569
32 549 - 32 549
Minority interest 1 - 1
Total equity 32 550 - 32 550
Total equity and 508 563 - 508 563
liabilities
BANK INCOME STATEMENT
Six months Six months
ended ended
30 June 30 June
2007 2007
(Unaudited) (Unaudited)
(As Reclassi-
previously
Rm Commentar reported) fication (Restated)
y s
Net interest income 2 & 3 8 101 (3) 8 098
Interest and similar 23 458 (59) 23 399
income
Interest expense and (15 357) 56 (15 301)
similar charges
Impairment losses on loans (943) - (943)
and advances
Net interest income after
impairment losses on loans 7 158 (3) 7 155
and advances
Net fee and commission 5 110 (210) 4 900
income
Fee and commission 3 & 4 5 161 55 5 216
income
Fee and commission 3 (51) (265) (316)
expense
Gains and losses from 3 860 (23) 837
banking and trading
activities
Gains and losses from 38 - 38
investment activities
Other operating income 4 380 (55) 325
Operating income before 13 546 (291) 13 255
operating expenditure
Operating expenditure (8 644) 291 (8 353)
Operating expenses 3 (8 202) 289 (7 913)
Non-credit related (28) - (28)
impairments
Indirect taxation (414) 2 (412)
Share of retained earnings
from associated 15 - 15
undertakings and joint
venture companies
Operating profit before 4 917 - 4 917
income tax
Taxation expense (1 443) - (1 443)
Profit for the period 3 474 - 3 474
Attributable to:
Ordinary equity holder of 3 360 - 3 360
the Bank
Preference equity holders 114 - 114
of the Bank
Minority interest 0 - 0
3 474 - 3 474
Headline earnings 3 371 - 3 371
COMMENTARY ON THE RECLASSIFICATIONS
Equity and shareholder loans
Shareholder loans granted to Private Equity, Commercial Property Finance and
Incubator Fund clients have been reclassified as part of the net investment in
that entity. Previously these were shown as "Loans and advances to customers".
Reclassification of interest
Hedging income and expenses have been reclassified to better eliminate
mismatches.
Fee expenses and similar items
While implementing IFRS 7, the Group adopted a policy where all fees paid
relating to either a financial instrument or fee income, should be classified as
a fee expense. Similarly any fees related to trading should be moved to "Gains
and losses from banking and trading activities".
Fees from trust and other fiduciary activities
Unit and property trust income has been reclassified from "Other operating
income" to "Fee and commission income".
PROFIT AND DIVIDEND ANNOUNCEMENT
Introduction
Absa Bank is a wholly-owned subsidiary of Absa Group Limited (Absa Group or the
Group), which is listed on the JSE Limited (the JSE).
Absa Bank and its subsidiaries` financial results for the six months ended 30
June 2008 and its preference dividend declaration for the period 1 March 2008 to
31 August 2008 are contained in this announcement.
Commentary pertaining to the operating environment and the results of Absa
Bank`s core subsidiaries are set out in the Absa Group`s interim financial
results announcement. The Absa Group announcement was released on the JSE
Securities Exchange News Services (Sens) and Absa Group`s website
(www.absa.co.za) on 7 August 2008, and will be published in the press on 8
August 2008.
Basis of presentation and changes in accounting policies
The Absa Bank`s interim results have been prepared in accordance with
International Financial Reporting Standards (IFRS) and the disclosures comply
with International Accounting Standard (IAS) 34.
The Bank has elected to early adopt IFRS 8 - Operating Segments, during the
period commencing 1 January 2008. The statement requires that an entity disclose
information to enable users of its financial statements to evaluate the nature
and financial effects of the types of business activities in which it engages
and the economic environment within which it operates. This information should
be disclosed in the same manner as presented to the entity`s chief operating
decision-maker(s). The adoption of the standard had no impact on the reported
profits or financial position of the Bank.
The Bank adopted IFRS 7 - Financial Instruments: Disclosures and IAS 1 -
Presentation of Financial Statements: Capital Disclosures (amendment) during the
year ended 31 December 2007. The adoption of IFRS 7 and the amendment to IAS 1
impacted disclosures made in the financial statements. The Bank also made some
reclassifications to the June 2007 income statement and balance sheet as a
result of the implementation of IFRS 7. The adoption of the standard had no
impact on the reported profits or financial position of the Bank.
Declaration of dividend number 5: Absa Bank non-cumulative, non-redeemable
preference shares (Absa Bank preference shares)
The Absa Bank preference shares have an effective coupon rate of 63% of Absa
Bank`s prevailing prime overdraft lending rate (prime rate). Absa Bank`s current
prime rate is 15,5%.
Notice is hereby given that preference dividend number 5, equal to 63% of the
prime rate as at 31 August 2008, per Absa Bank preference share has been
declared for the period from 1 March 2008 to 31 August 2008. The dividend is
payable on Monday, 1 September 2008, to shareholders of the Absa Bank preference
shares recorded in the register of members of the Company at the close of
business on Friday, 29 August 2008. Should the prime rate change prior to 31
August 2008, the actual amount of the dividend will be adjusted accordingly.
A confirmation of this dividend declaration for the Absa Bank preference shares
will be made on the first business day following the public announcement of the
repo interest rate decision of the South African Reserve Bank`s Monetary Policy
Committee (MPC). The MPC meeting has been scheduled for 13 and 14 August 2008.
Based on the current prime rate, the preference dividend payable for the period
1 March 2008 to 31 August 2008 would indicatively be 4 797,49 cents per Absa
Bank preference share.
In accordance with the provisions of Strate, the electronic settlement and
custody system used by the JSE, and the JSE Listings Requirements, the following
salient dates for the payment of the preference dividend are applicable:
Last day to trade cum dividend Friday, 22 August 2008
Shares commence trading ex dividend Monday, 25 August 2008
Record date Friday, 29 August 2008
Payment date Monday, 1 September 2008
Share certificates may not be dematerialised or rematerialised between Monday,
25 August 2008, and Friday, 29 August 2008, both dates inclusive.
On Monday, 1 September 2008, the dividend will be electronically transferred to
the bank accounts of certificated shareholders who use this facility. In respect
of those who do not, cheques dated 1 September 2008 will be posted on or about
that date. The accounts of those shareholders that have dematerialised their
shares (which are held at their participant or broker) will be credited on
Monday, 1 September 2008.
On behalf of the board
S Martin
Group Secretary
Johannesburg
7 August 2008
Please note that the preference dividend calculation dates are 28 (29) February
and 31 August of each year and that the payment date may not be later than 45
days after the preference dividend calculation date.
Enquiries
Jacques Schindehutte
Group executive director
Absa Group Limited
5th floor, Absa Towers East, 170 Main Street, Johannesburg
Tel: (+2711) 350-4850, Fax: (+2711) 350-8433
e-mail: jacquessc@absa.co.za
Eric Wasserman
Group Executive: Group Finance
Absa Group Limited
4th floor, Absa Towers East, 170 Main Street, Johannesburg
Tel: (+2711) 350-5887, Fax: (+2711) 350-6487
e-mail: ericwas@absa.co.za
Sponsor
Merrill Lynch South Africa (Proprietary) Limited
Date: 07/08/2008 08:00:43 Produced by the JSE SENS Department.
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