* Says H1 profit to fall as much as 10 pct
* Shares set for biggest one-day fall since 2008
* Rival banks also hit in sell-off
(Recasts, adds analyst comment)
JOHANNESBURG, June 26 (Reuters) – South African bank Absa
Group stunned the market with a profit warning on
Tuesday citing an increase in mortgage-related bad debts,
sending its shares tumbling and raising fears a sector-wide
recovery was losing steam.
Absa, majority owned by Barclays, which like other
South African banks has been on the mend after a surge in bad
debts in 2009, warned its first-half earnings could fall as much
as 10 percent as bad debt costs related to mortgages increased
more than it had expected.
It also said revenue growth remained subdued, raising
concerns that other lenders in Africa’s top economy could be set
for another downturn.
“It is a huge disappointment,” said Charles Russell, an
analyst at Macquarie First South Securities in Johannesburg.
“They are saying it is just on the impairments on their
mortgage book… I cannot imagine that is the only thing that
has gone wrong. The fact that they are not growing any revenue,
that is more of a pervasive thing than just relating to their
mortgage portfolio.”
Absa shares were down 7.7 percent at 144.49 rand at 1136
GMT, putting them on track for their biggest one-day percentage
decline in nearly four years.
Continued…
