Absa and Barclays talks continue

South Africa biggest retail bank Absa has said it is still in talks with UK bank Barclays over the sale of majority stake in the group.

In November, Absa said it was close to striking a deal with Barclays. But the group said Barclays is still waiting for the approval of South Africa's banking and competition authorities to make a formal offer. Absa also announced that it expects to see earnings grow by 20-25% in its current financial year.

"Discussions with Barclays are continuing, but shareholders are advised that no agreement has been reached as to any offer being made by Barclays to acquire a majority stake in Absa," Absa said in a statement. If Barclays buys a stake in Absa it will be one of the largest foreign investments in South Africa in recent years. Absa currently has a market value of about $8.5bn (£4.4bn). Analysts said Absa's earnings forecast was better than expected. However, the company warned that headline earnings growth would be trimmed by about four percentage points because of share options for a black economic empowerment transaction and a staff share incentive scheme. The South African group will release its results for the year to 31 March on 30 May.