Mercantile Bank Holdings advised on Thursday that after taxation earnings and headline earnings per share for the year ending 31 December 2009 are expected to decrease by 60%
to 70% compared to the earnings and headline earnings per share reported for the year ended 31 December 2008.
The group said that earnings and headline earnings per share before taxation are expected to decrease by 5% to 25% compared to the earnings and headline earnings per share before taxation reported for the year ended 31 December 2008 due to the negative endowment effect resulting from the significantly lower interest rate environment in South Africa and the high level of capital of the company.
"During the second half of 2008, a deferred taxation asset of R162 million was raised, which resulted in after taxation profits increasing by such amount whereas for 2009, taxation will be charged against income.
"Consequently, after taxation earnings and headline earnings per share for the year ending 31 December 2009 are expected to decrease by 60% to 70% compared to the earnings and headline earnings per share reported for the year ended 31 December 2008," it stated.
The results for the year ending 31 December 2009 are expected to be published at the beginning of March 2010.
