Richard Stovin-Bradford

Richard Stovin-Bradford

Absa chief executive Steve Booysen played Billy Ocean's hit When the going gets tough, the tough get going before yesterday's interim results presentation.

And, as the big four banks' most exposed to beleaguered consumers - it has 9,3million customers - Absa showed its resilience in tough going by reporting an eight percent increase in headline earnings a share to 700 cents.

Few analysts were surprised by the seven percent decline in the retail banking area's contribution to R2billion.

Finance director Jacques Schindehütte said retail credit impairments leapt to 1,21percent of average advances from 0,65percent a year ago. Consumers were "under siege from the increase in the cost of living", he said.

Retail banking chief Louis von Zeuner said Absa had moderated its pace of credit extension a year ago. But it is reaping its share of bad loans. Absa repossesses 1300 vehicles a month and buys in about 40 houses a month.

It has a mammoth 2500 staff in the collections area, assisting clients in difficulty.

He said customers battling with repayments on luxury cars had been assisted to trade down to more modest vehicles.

Slower retail earnings were offset by robust growth in commercial banking and a 32percent leap in Absa Capital's contribution as the investment bank nibbles at the heels of Standard Bank and Rand Merchant Bank.