Absa says it won't retrench employees

Absa wont retrench staff, despite a 7% decline in earnings

There will be no job losses in the retail banking sector of South Africa's biggest retail bank, Absa, despite a 7% decline in earnings in the sector. The group released its interim results in Johannesburg yesterday.

Group executive director, Jacques Schindehutte says they don't believe in retrenching staff. CEO Steve Booysen has warned that the bank's retail business is likely to see an increase in bad debt because of deteriorating market conditions.

The retail banking arm has already seen bad debts rise by more than 129% to over R2 billion. The bank says higher interest rates and inflation have resulted in a rising number of accounts in arrears. It is feared that another possible interest rate hike this month could aggravate the situation. The bank has however posted an 8% rise in first half earnings.