South African bank puts on hold plans to expand business in Nigeria

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South African lender Absa has put on ice plans to expand into new business lines in Nigeria, a country previously at the centre of its African ambitions, interim boss Jason Quinn said on Monday.

Former Chief Executive Maria Ramos and others had previously touted growth in Nigeria beyond its existing securities business as key to the group’s aim of doubling market share in Africa.

But the COVID-19 pandemic, among other things, had disrupted those plans, Quinn told Reuters shortly after the bank announced an around 14-fold rise in half-year profit, saying it now wants to concentrate on its current business lines.

“As I look at it now, I’d rather we focus on capturing the opportunity that we currently preside over, as opposed to looking for new ones,” he said of the bank’s Nigeria plans.

Absa has previously said it would look to enter other markets like Ethiopia and Egypt in its bid to become a “truly pan-African bank”.

It has now combined its South African operations with those elsewhere on the continent, which Quinn said he hoped would lead to a pick-up in units that have lagged.

A hefty drop in bad debt charges helped drive the boom in Absa’s headline earnings per share (HEPS), which rose to 984.6 cents ($0.6685) in the six months to June 30 from 67.7 cents a year earlier.

Its interim HEPS, the main profit measure in South Africa, were also 7% higher than in 2019. Quinn said the results showed the bank’s strategic decisions were largely the right ones.

Quinn took over from former CEO Daniel Mminele who quit amid a strategy dispute in April after just 15 months after taking over from Ramos. Quinn would not be drawn on whether he would seek to stay on as CEO permanently.