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Media release

Media release

Absa Group Delivered 17% Headline Earnings Growth Driven by Lower Impairments and Pre-Provision Profit Growth

18 August 2025

Salient points

  • Revenue rose 5% to R56.5 billion
  • Pre-provision profit increased 4% to R26.4 billion
  • Impairments decreased 14% to R7.2 billion
  • Credit-loss-ratio improved to 100 basis points (bps) from 123 bps
  • Headline earnings increased 17% to R11.9 billion
  • Operating costs grew 6% to R30.0 billion
  • Cost-to-income ratio increased to 53.2% from 52.7%
  • Dividend per share increased 15% to 785 cents
  • Return on equity increased to 14.8% from 14.0%
  • Common Equity Tier 1 (CET 1) ratio of 12.5%, slightly lower than prior year (12.7%)

 

Absa Group delivered strong earnings growth for the first half of 2025, reflecting successful execution of its strategic priorities. Headline earnings increased 17% as credit impairments declined and pre-provision profit grew.

Revenue increased, underpinned by strong non-interest income growth and stable net interest income, reflecting solid divisional revenue contributions. From a geographic perspective, double-digit earnings growth was delivered by the Group’s South African operations, mainly due to lower impairments, while Africa regions’ performance was mainly driven by strong pre-provision profit growth as underpinned by strong customer growth.

“Our interim earnings performance demonstrates good progress on strategic priorities during this period, including operational reorganisation and divisional alignment, and enhanced client focus. Headline earnings increased 17% and our return on equity continues to improve, showing the benefit of our diversified footprint with operations in 16 countries,” said Kenny Fihla, who joined Absa Group as Chief Executive Officer on 17 June 2025.

A 14% decrease in impairments played a significant role in delivering earnings growth and included a robust collections strategy, credit model enhancements, and changes to new-business lending criteria, particularly in vehicle asset finance and unsecured lending. The credit-loss-ratio reduced in line with guidance and is at the top end of Absa’s through-the-cycle target range at 100 basis points.

“Among the key contributors to our strong performance are a notable improvement in our credit-loss-ratio, strong growth in non-interest income particularly trading, and cost management supported by our productivity programme,” said Deon Raju, Absa Group Financial Director. To date, Absa has achieved R2.4 billion of the R5 billion savings it had committed to achieving by 2027 under a productivity programme launched in 2024.

“While we continue to operate in a highly competitive environment, we remain focused on identifying opportunities to grow our balance sheet, our customer base and maintain our competitive positioning across our markets,” added Raju.

Business unit performance

Absa Group business units’ performance in the first half of 2025 reflects the benefits of disciplined execution, with most business units reporting strong earnings growth.

Business unit headline earnings performance

Business unit June 2025 Headline earnings Change year-on-year
Personal and Private Banking R3.2 billion Increased 23%
Business Banking R1.7 billion Decreased 12%
Corporate & Investment Banking R6.4 billion Increased 10%
Absa Regional Operations Retail and Business Banking (ARO RBB) R1.1 billion Increased 35%

 

The newly formed Personal and Private Banking (PPB) business unit delivered strong earnings growth, primarily driven by a significant reduction in credit impairments, despite muted revenue growth due to modest industry loan expansion and a more conservative risk appetite in lending. PPB is continuing its investment in enhancing the bank’s digital capabilities to deliver a seamless, human-centered banking experience for its customers. The areas of focus include enhancing mobile and digital platforms, embedding artificial intelligence (AI) and data analytics and strengthening cybersecurity.

Business Banking (BB) earnings fell short of expectations and were impacted by subdued revenue growth and higher credit-related impairments.

Corporate and Investment Banking (CIB) reported solid earnings growth and benefitted from lower credit-related impairments and robust trading revenue, although net interest income growth remains constrained. CIB remains an anchor for the Group, contributing more than half of the Group’s earnings.

Absa Regional Operations Retail and Business Banking (ARO RBB) showed strong growth in revenue and pre-provision profit with a significant improvement in headline earnings. These results were supported by strong customer acquisition and fee income growth, which helped offset higher credit-related impairments.

Head Office, Treasury, and other operations reported a substantially lower earnings loss, reflecting the impact of asset and liability management optimisation and the discontinuation of hyperinflationary accounting in Ghana due to lower inflation in that market.

Non-financial performance

Absa Group’s customer base increased 2% to 12.8 million in the first half of the year and Group-wide digitally active customers increased 8% to 5 million customers.  Continued efforts in evolving product offering and digital channels were evident from, for example, the launch of our Kiganjani App in Tanzania, making it easier for customers to manage their finances from anywhere.

Absa increased its investment in IT-related spend, with costs increasing 5% to R8.2 billion, mainly reflecting investment into new digital capabilities resulting in higher cybersecurity, as well as software license and maintenance costs. Ongoing investments in new technologies, the use of AI and digitisation are expected to yield benefits through operational streamlining and automation which will further enhance delivery on client-centric solutions.

Absa is continuing its journey to advance its sustainable finance agenda and is refining its ESG strategy to focus on high-impact sectors while advocating for regulatory support to unlock further investment in industrial decarbonisation and infrastructure.

 

Outlook

Given the weak start to the year and the negative impact of the US trade tariffs, we expect the South African economy to grow just 0.9% in 2025. Our baseline forecast for our Africa region countries is that GDP will rise slightly to 4.8% in 2025. Although heightened global uncertainties have increased downside risks for all our markets, lower inflation and policy rates, ongoing infrastructure investment, favourable weather conditions, multilateral support and a strong focus on reform across the region continue to support the longer-term outlook.

For the full year, Absa’s guidance for 2025 is largely unchanged and expects mid-single digit revenue growth. Return on equity of around 15% is expected. We expect a weaker Rand to underpin earnings slightly in 2025, and Africa regions earnings growth should be noticeably stronger than South Africa.

 

For Group CEO video remarks and a video clip featuring our highlights during the first half of 2025, please visit News and Insights – Absa Group | Welcome to Absa Group Limited.

To view our SENS and investor materials, visit Financial results – Absa Group | Welcome to Absa Group Limited

18 August 2025

Salient points

  • Revenue rose 5% to R56.5 billion
  • Pre-provision profit increased 4% to R26.4 billion
  • Impairments decreased 14% to R7.2 billion
  • Credit-loss-ratio improved to 100 basis points (bps) from 123 bps
  • Headline earnings increased 17% to R11.9 billion
  • Operating costs grew 6% to R30.0 billion
  • Cost-to-income ratio increased to 53.2% from 52.7%
  • Dividend per share increased 15% to 785 cents
  • Return on equity increased to 14.8% from 14.0%
  • Common Equity Tier 1 (CET 1) ratio of 12.5%, slightly lower than prior year (12.7%)

 

Absa Group delivered strong earnings growth for the first half of 2025, reflecting successful execution of its strategic priorities. Headline earnings increased 17% as credit impairments declined and pre-provision profit grew.

Revenue increased, underpinned by strong non-interest income growth and stable net interest income, reflecting solid divisional revenue contributions. From a geographic perspective, double-digit earnings growth was delivered by the Group’s South African operations, mainly due to lower impairments, while Africa regions’ performance was mainly driven by strong pre-provision profit growth as underpinned by strong customer growth.

“Our interim earnings performance demonstrates good progress on strategic priorities during this period, including operational reorganisation and divisional alignment, and enhanced client focus. Headline earnings increased 17% and our return on equity continues to improve, showing the benefit of our diversified footprint with operations in 16 countries,” said Kenny Fihla, who joined Absa Group as Chief Executive Officer on 17 June 2025.

A 14% decrease in impairments played a significant role in delivering earnings growth and included a robust collections strategy, credit model enhancements, and changes to new-business lending criteria, particularly in vehicle asset finance and unsecured lending. The credit-loss-ratio reduced in line with guidance and is at the top end of Absa’s through-the-cycle target range at 100 basis points.

“Among the key contributors to our strong performance are a notable improvement in our credit-loss-ratio, strong growth in non-interest income particularly trading, and cost management supported by our productivity programme,” said Deon Raju, Absa Group Financial Director. To date, Absa has achieved R2.4 billion of the R5 billion savings it had committed to achieving by 2027 under a productivity programme launched in 2024.

“While we continue to operate in a highly competitive environment, we remain focused on identifying opportunities to grow our balance sheet, our customer base and maintain our competitive positioning across our markets,” added Raju.

Business unit performance

Absa Group business units’ performance in the first half of 2025 reflects the benefits of disciplined execution, with most business units reporting strong earnings growth.

Business unit headline earnings performance

Business unit June 2025 Headline earnings Change year-on-year
Personal and Private Banking R3.2 billion Increased 23%
Business Banking R1.7 billion Decreased 12%
Corporate & Investment Banking R6.4 billion Increased 10%
Absa Regional Operations Retail and Business Banking (ARO RBB) R1.1 billion Increased 35%

 

The newly formed Personal and Private Banking (PPB) business unit delivered strong earnings growth, primarily driven by a significant reduction in credit impairments, despite muted revenue growth due to modest industry loan expansion and a more conservative risk appetite in lending. PPB is continuing its investment in enhancing the bank’s digital capabilities to deliver a seamless, human-centered banking experience for its customers. The areas of focus include enhancing mobile and digital platforms, embedding artificial intelligence (AI) and data analytics and strengthening cybersecurity.

Business Banking (BB) earnings fell short of expectations and were impacted by subdued revenue growth and higher credit-related impairments.

Corporate and Investment Banking (CIB) reported solid earnings growth and benefitted from lower credit-related impairments and robust trading revenue, although net interest income growth remains constrained. CIB remains an anchor for the Group, contributing more than half of the Group’s earnings.

Absa Regional Operations Retail and Business Banking (ARO RBB) showed strong growth in revenue and pre-provision profit with a significant improvement in headline earnings. These results were supported by strong customer acquisition and fee income growth, which helped offset higher credit-related impairments.

Head Office, Treasury, and other operations reported a substantially lower earnings loss, reflecting the impact of asset and liability management optimisation and the discontinuation of hyperinflationary accounting in Ghana due to lower inflation in that market.

Non-financial performance

Absa Group’s customer base increased 2% to 12.8 million in the first half of the year and Group-wide digitally active customers increased 8% to 5 million customers.  Continued efforts in evolving product offering and digital channels were evident from, for example, the launch of our Kiganjani App in Tanzania, making it easier for customers to manage their finances from anywhere.

Absa increased its investment in IT-related spend, with costs increasing 5% to R8.2 billion, mainly reflecting investment into new digital capabilities resulting in higher cybersecurity, as well as software license and maintenance costs. Ongoing investments in new technologies, the use of AI and digitisation are expected to yield benefits through operational streamlining and automation which will further enhance delivery on client-centric solutions.

Absa is continuing its journey to advance its sustainable finance agenda and is refining its ESG strategy to focus on high-impact sectors while advocating for regulatory support to unlock further investment in industrial decarbonisation and infrastructure.

 

Outlook

Given the weak start to the year and the negative impact of the US trade tariffs, we expect the South African economy to grow just 0.9% in 2025. Our baseline forecast for our Africa region countries is that GDP will rise slightly to 4.8% in 2025. Although heightened global uncertainties have increased downside risks for all our markets, lower inflation and policy rates, ongoing infrastructure investment, favourable weather conditions, multilateral support and a strong focus on reform across the region continue to support the longer-term outlook.

For the full year, Absa’s guidance for 2025 is largely unchanged and expects mid-single digit revenue growth. Return on equity of around 15% is expected. We expect a weaker Rand to underpin earnings slightly in 2025, and Africa regions earnings growth should be noticeably stronger than South Africa.

 

For Group CEO video remarks and a video clip featuring our highlights during the first half of 2025, please visit News and Insights – Absa Group | Welcome to Absa Group Limited.

To view our SENS and investor materials, visit Financial results – Absa Group | Welcome to Absa Group Limited