Absa posted a 9 percent drop in headline earnings to R8.8 billion ($980 million) in the full year to December as higher credit impairments took their toll, South Africa’s biggest retail bank said on Tuesday.

David Hodnet, Absa’s financial director, described this performance as “clearly disappointing, no doubt.”

“Large credit impairrments dominated our results this time around. They increased 63 percent to R8.3 billion,” Hodnet told a gathering of analysts and journalists in Johannesburg.

The bank added credit and business banking headline earnings fell 27 percent due to large impairments and large commercial property equity investment write downs.

The bank said global economic growth remained subdued during the reporting period. It said South Africa’s economic growth slowed down to 1.8 percent in the third quarter.

This was the slowest growth since the country emerged from the global economic recession in 2009.

But the company said despite a difficult and challenging year, a 3 percent increase in pre-provision profit to R21 billion ($2.3 billion) was evidence of momentum within the business and showed that its core operations remain strong.

During the reporting period, the company implemented a number of operating model changes and did a thorough review of its businesses.

It said following this review,  its balance sheet was stronger after increasing provisions, writing down investments, improving funding mix and liquidity and maintaining high capital ratios.

Maria Ramos, Group CE of Absa, said headline earnings for 2012 did not meet the company’s expectations.

“But we made significant changes to the Group, creating a solid platform for growth. Momentum in our underlying businesses has improved, our balance sheet remains strong and we are well positioned to execute our One Africa strategy,” Ramos said.