* Earnings hit by one-off BEE charge
* Shares up 4 percent
* Strong balance sheet for 2009
(Adds CEO comments, details, shares)
By Serena Chaudhry
JOHANNESBURG, Nov 24 (Reuters) - South Africa's African Bank Investments Ltd (Abil) reported a 21 percent drop in full-year headline EPS on Monday but said its balance sheet for 2009 was strong and its shares gained more than 4 percent.
The country's biggest mass-market lender said headline earnings per share for the year to end-Sept fell to 211.6 cents, in line with its own forecast, as it was hit by a one-off charge and a weak performance at its newly acquired Ellerines unit.
Stripping out the one-off 291 million rand ($27.68 million) charge related to a black economic empowerment deal, headline EPS fell 6 percent to 252.1 cents.
Investors focused on the banking performance and Abil shares gained 4.14 percent at 22.62 rand by 0941 GMT, outpacing the Johannesburg financial index, which was 0.42 percent higher.
"I think most people are discounting the bad Ellerines' numbers and focusing on the banking group itself which had reasonably robust numbers," Tubby Goodwin, a trader at Investec Securities said.
Chief Executive Leon Kirkinis said he expected advance book growth at its core lending unit African Bank to slow to 25 percent in 2009 from 45 percent this year.
Its bad debt would stay at about 10 percent of average advances -- above a current target range of 8.5-9.5 percent, which Kirkinis said would be reviewed.
"I think that we've moved into a period where a 10 percent bad debt range is more the norm for our bad debt models," Kirkinis told Reuters. "I actually think that we will stay at around this 10 percent level."
African Bank posted an 8 percent rise in headline earnings to 1.442 billion rand and the company said in a statement it was confident the business would double its advances portfolio in the next four years.
While South African banks have been shielded from the worst of the global financial credit crisis thanks to strict exchange controls, the country's big four banks have all reported higher bad debts at their retail units as rising borrowing costs dent consumer demand.
Kirkinis said while he expected profit growth to slow in line with receding global markets, Abil was focused on maintaining a healthy liquidity profile.
Nedbank forecast no growth in full-year headline earnings earlier this month due to mounting bad debts, while Standard Bank said last month tough conditions at its corporate and investment banking divisions were hurting its revenue in South Africa.
Abil's furniture unit Ellerines was also hit by bad debts and a weak sales performance, and reported headline earnings of 368 million rand. There were no comparative figures for Ellerines, which Abil bought in December.
"We see 2009 as being a period where the (Ellerines) performance will pick up from here, so you should start seeing it as a positive contributor," Kirkinis said.
"Economic activity has increased since the nine months that are encapsulated in this set of results ... (but) it is still going to be a difficult environment over the next few years."
Ellerines peer JD Group also reported a fall in full-year profit earlier this month due to lacklustre consumer spending but said sales were improving this financial year.
(Reporting by Serena Chaudhry; Editing by Rupert Winchester)