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Media release

Media release

Absa Group grew Headline Earnings by 12% to R24.8bn driven by Pre-provision Profit and Lower Impairments

10 March 2026

Salient points

  • Revenue increased 5% to R115.7 billion
  • Pre-provision profit increased 4% to R53.5 billion
  • Impairments decreased 6% to R13.4 billion
  • Credit-loss-ratio improved to 88 basis points (bps) from 103 bps
  • Operating costs grew 6% to R62.2 billion
  • Cost-to-income ratio increased to 53.8% from 53.2%
  • Headline earnings increased 12% to R24.8 billion
  • Dividend per share increased 12% to 1635 cents
  • Return on equity increased to 15% from 14.8%
  • Common Equity Tier 1 (CET 1) ratio increased slightly to 12.7% from 12.6%

Absa Group delivered solid financial performance for the full year, achieving a 12% increase in headline earnings. This performance reflects lower credit impairments, disciplined cost management, and solid momentum across key business segments, particularly in Corporate and Investment Banking (CIB) and Africa Regions. The Group’s performance is further underpinned by deliberate strategic actions taken to strengthen revenue growth, enhance balance sheet resilience, and improve return on equity.

Revenue grew by 5% for the full year, supported by non‑interest income momentum, particularly robust trading revenue and a moderate net interest income growth, despite modest retail loan growth and margin compression. From a geographic perspective, Africa Regions delivered noticeably stronger earnings growth than South Africa, driven by solid pre‑provision profit growth and continued customer expansion, while South Africa benefited from a meaningful improvement in credit impairments across several portfolios.

“Our performance over the past year reflects clear progress on delivering on our strategic priorities supported by disciplined execution across the Group. We are seeing the benefits of our operating model changes, sharper client focus, and continued improvements in credit outcomes. Growth across several of our businesses, particularly in Corporate and Investment Banking and our Africa Regions operations, highlights the strength of our diversified franchise and our ability to deliver under evolving market conditions,” said Kenny Fihla, Group Chief Executive Officer.

Impairments decreased by 6% over the full year, with the Group’s credit loss ratio improving to 88bps, the mid-point of Absa’s through-the-cycle range when compared to 103bps in 2024.  This improvement was primarily driven by stronger performance across key Personal and Private Banking (PPB) portfolios in South Africa, Africa Regions, and CIB, underpinned by proactive risk management, enhanced collections effectiveness and a strategic repositioning of the portfolio.

“Our financial performance reflects disciplined execution in a year marked by improved credit trends, strong non-interest income growth, and continued cost containment. We are encouraged by the improvement in our credit loss ratio supported by better outcomes across key portfolios, as well as momentum in trading revenue and customer activity. This foundation enables us to continue investing in strategic priorities while maintaining balance sheet strength and a resilient capital position,” said Deon Raju, Group Financial Director.

As part of the Group’s productivity programme, Absa has achieved cumulatively R3.1 billion savings since its launch in 2024. These savings were achieved through optimisation of back office and channel, third party suppliers and software licensing.

“As we look ahead, we remain focused on enhancing operational efficiencies, driving sustainable revenue growth and delivering improved returns for our shareholders,” added Raju.

Business unit performance

The full-year performance of Absa Group’s business units reflects the effects of consistent strategic execution, with most units delivering solid earnings growth across the period.

Business unit headline earnings performance

Business unit 2025 headline earnings Change year-on-year
Corporate & Investment Banking (CIB) R13 billion Increased 14%
Personal and Private Banking (PPB) R7.5 billion Increased 7%
Business Banking (BB) R3.9 billion Decreased 8%
Africa Regions – Personal and Private Banking & Business Banking R2.5 billion Increased 51%

CIB delivered solid earnings growth, underpinned by the Global Markets business in a period of heightened volatility and strong market moves. Resilient client franchise growth, disciplined cost management and improved credit quality, partially offset by ongoing margin pressure in the lending and transactional banking portfolio supports sustainable growth going forward.

PPB delivered solid headline earnings growth, improved credit quality and enhanced returns, reflecting resilience supported by disciplined risk management and continued investment in strategic capabilities in a competitive, lower‑margin environment. The business is strengthening a high‑quality customer franchise, with strong gains emerging in higher-income segments, through initiatives that include positioning Absa Rewards as a key lever to drive value and influence customer behaviour and accelerating efforts to expand digital adoption.

BB delivered sound balance sheet growth, but earnings and returns were negatively impacted by margin compression, higher impairments, and cost pressures.

Africa Regions – Personal and Private Banking & Business Banking showed strong growth in earnings, supported by expanded margins and improved credit quality, demonstrating the resilience of the franchise and the benefits of disciplined risk management and continued investment, despite a challenging operating environment.

Head Office, Treasury, and other operations reported a lower earnings loss, reflecting the positive impact of asset and liability management optimisation and the discontinuation of hyperinflationary accounting in Ghana offset by a lower rate environment in key markets within Africa Regions.

Non-financial performance

Absa Group’s customer base increased to 13.1 million mainly driven by Africa Regions from targeted customer engagement initiatives and new-to-bank acquisition programmes.

Digitally active customers have increased to 5.4 million driven by the migration to digital channels (particularly driven by adoption of the banking app).

Absa increased its investment in IT-related spend, with spend increasing by 6% to R16.7 billion, reflecting investment into new digital infrastructure capabilities, investment in cybersecurity, data and cloud which was in part offset by continue optimisation of infrastructure costs.

Outlook

The global economic outlook remains highly uncertain due to volatile US policy dynamics and the ongoing conflicts in the Middle East and Ukraine. Rising geopolitical risks, particularly the potential for sustained higher energy prices, could weigh on global growth and limit the ability of major central banks to cut interest rates further.

In South Africa, economic growth of 1.9% was forecasted for 2026 (ahead of military action against Iran), with inflation expected to remain in the low‑3% range and a further 50bps of interest rate cuts anticipated. This environment should support a gradual improvement in household finances, employment, and consumer and business confidence. However, prolonged geopolitical tension, especially in the Middle East, could weaken the Rand, raise inflation, and reduce the scope for monetary easing.

Across Absa’s Africa Regions, GDP‑weighted growth is expected to rise to 5.3% in 2026, supported by recoveries in Botswana, Mozambique, and Zambia, and steady performance in other markets. Policy rates are generally expected to remain flat or decline, except in Botswana. Key risks stem from potential global energy market disruptions, which could push inflation higher, limit monetary policy easing, and create fiscal pressure if fuel subsidies return.

Based on these assumptions, and excluding further major unforeseen political, macroeconomic, or regulatory developments, our guidance for 2026 is largely unchanged and as follows:

The Group expects mid‑single digit revenue growth, with non‑interest income growing above net interest income. Customer loans and deposits are forecast to grow by mid‑ to high‑single digits. The credit loss ratio is expected to improve slightly into the bottom half of the 75bps to 100bps through-the-cycle target range.

Operating expenses are expected to grow by low to mid‑single digits, resulting in positive operating JAWS and mid‑single digit pre‑provision profit growth. Return on equity (RoE) is expected to be around 16%, with higher other reserves supporting NAV but diluting RoE.

The CET1 ratio is projected to end 2026 at the top end of the 11.0% – 12.5% target range, and the 55% dividend payout ratio is expected to be maintained. Rand appreciation is anticipated to be a headwind to revenue and earnings.

Medium‑term targets are reaffirmed, including a RoE of 16%-19% for 2027-2030, with the RoE improving to well within that range by 2028, driven in part by reducing the cost‑to‑income ratio to approach 50%.

10 March 2026

Salient points

  • Revenue increased 5% to R115.7 billion
  • Pre-provision profit increased 4% to R53.5 billion
  • Impairments decreased 6% to R13.4 billion
  • Credit-loss-ratio improved to 88 basis points (bps) from 103 bps
  • Operating costs grew 6% to R62.2 billion
  • Cost-to-income ratio increased to 53.8% from 53.2%
  • Headline earnings increased 12% to R24.8 billion
  • Dividend per share increased 12% to 1635 cents
  • Return on equity increased to 15% from 14.8%
  • Common Equity Tier 1 (CET 1) ratio increased slightly to 12.7% from 12.6%

Absa Group delivered solid financial performance for the full year, achieving a 12% increase in headline earnings. This performance reflects lower credit impairments, disciplined cost management, and solid momentum across key business segments, particularly in Corporate and Investment Banking (CIB) and Africa Regions. The Group’s performance is further underpinned by deliberate strategic actions taken to strengthen revenue growth, enhance balance sheet resilience, and improve return on equity.

Revenue grew by 5% for the full year, supported by non‑interest income momentum, particularly robust trading revenue and a moderate net interest income growth, despite modest retail loan growth and margin compression. From a geographic perspective, Africa Regions delivered noticeably stronger earnings growth than South Africa, driven by solid pre‑provision profit growth and continued customer expansion, while South Africa benefited from a meaningful improvement in credit impairments across several portfolios.

“Our performance over the past year reflects clear progress on delivering on our strategic priorities supported by disciplined execution across the Group. We are seeing the benefits of our operating model changes, sharper client focus, and continued improvements in credit outcomes. Growth across several of our businesses, particularly in Corporate and Investment Banking and our Africa Regions operations, highlights the strength of our diversified franchise and our ability to deliver under evolving market conditions,” said Kenny Fihla, Group Chief Executive Officer.

Impairments decreased by 6% over the full year, with the Group’s credit loss ratio improving to 88bps, the mid-point of Absa’s through-the-cycle range when compared to 103bps in 2024.  This improvement was primarily driven by stronger performance across key Personal and Private Banking (PPB) portfolios in South Africa, Africa Regions, and CIB, underpinned by proactive risk management, enhanced collections effectiveness and a strategic repositioning of the portfolio.

“Our financial performance reflects disciplined execution in a year marked by improved credit trends, strong non-interest income growth, and continued cost containment. We are encouraged by the improvement in our credit loss ratio supported by better outcomes across key portfolios, as well as momentum in trading revenue and customer activity. This foundation enables us to continue investing in strategic priorities while maintaining balance sheet strength and a resilient capital position,” said Deon Raju, Group Financial Director.

As part of the Group’s productivity programme, Absa has achieved cumulatively R3.1 billion savings since its launch in 2024. These savings were achieved through optimisation of back office and channel, third party suppliers and software licensing.

“As we look ahead, we remain focused on enhancing operational efficiencies, driving sustainable revenue growth and delivering improved returns for our shareholders,” added Raju.

Business unit performance

The full-year performance of Absa Group’s business units reflects the effects of consistent strategic execution, with most units delivering solid earnings growth across the period.

Business unit headline earnings performance

Business unit 2025 headline earnings Change year-on-year
Corporate & Investment Banking (CIB) R13 billion Increased 14%
Personal and Private Banking (PPB) R7.5 billion Increased 7%
Business Banking (BB) R3.9 billion Decreased 8%
Africa Regions – Personal and Private Banking & Business Banking R2.5 billion Increased 51%

CIB delivered solid earnings growth, underpinned by the Global Markets business in a period of heightened volatility and strong market moves. Resilient client franchise growth, disciplined cost management and improved credit quality, partially offset by ongoing margin pressure in the lending and transactional banking portfolio supports sustainable growth going forward.

PPB delivered solid headline earnings growth, improved credit quality and enhanced returns, reflecting resilience supported by disciplined risk management and continued investment in strategic capabilities in a competitive, lower‑margin environment. The business is strengthening a high‑quality customer franchise, with strong gains emerging in higher-income segments, through initiatives that include positioning Absa Rewards as a key lever to drive value and influence customer behaviour and accelerating efforts to expand digital adoption.

BB delivered sound balance sheet growth, but earnings and returns were negatively impacted by margin compression, higher impairments, and cost pressures.

Africa Regions – Personal and Private Banking & Business Banking showed strong growth in earnings, supported by expanded margins and improved credit quality, demonstrating the resilience of the franchise and the benefits of disciplined risk management and continued investment, despite a challenging operating environment.

Head Office, Treasury, and other operations reported a lower earnings loss, reflecting the positive impact of asset and liability management optimisation and the discontinuation of hyperinflationary accounting in Ghana offset by a lower rate environment in key markets within Africa Regions.

Non-financial performance

Absa Group’s customer base increased to 13.1 million mainly driven by Africa Regions from targeted customer engagement initiatives and new-to-bank acquisition programmes.

Digitally active customers have increased to 5.4 million driven by the migration to digital channels (particularly driven by adoption of the banking app).

Absa increased its investment in IT-related spend, with spend increasing by 6% to R16.7 billion, reflecting investment into new digital infrastructure capabilities, investment in cybersecurity, data and cloud which was in part offset by continue optimisation of infrastructure costs.

Outlook

The global economic outlook remains highly uncertain due to volatile US policy dynamics and the ongoing conflicts in the Middle East and Ukraine. Rising geopolitical risks, particularly the potential for sustained higher energy prices, could weigh on global growth and limit the ability of major central banks to cut interest rates further.

In South Africa, economic growth of 1.9% was forecasted for 2026 (ahead of military action against Iran), with inflation expected to remain in the low‑3% range and a further 50bps of interest rate cuts anticipated. This environment should support a gradual improvement in household finances, employment, and consumer and business confidence. However, prolonged geopolitical tension, especially in the Middle East, could weaken the Rand, raise inflation, and reduce the scope for monetary easing.

Across Absa’s Africa Regions, GDP‑weighted growth is expected to rise to 5.3% in 2026, supported by recoveries in Botswana, Mozambique, and Zambia, and steady performance in other markets. Policy rates are generally expected to remain flat or decline, except in Botswana. Key risks stem from potential global energy market disruptions, which could push inflation higher, limit monetary policy easing, and create fiscal pressure if fuel subsidies return.

Based on these assumptions, and excluding further major unforeseen political, macroeconomic, or regulatory developments, our guidance for 2026 is largely unchanged and as follows:

The Group expects mid‑single digit revenue growth, with non‑interest income growing above net interest income. Customer loans and deposits are forecast to grow by mid‑ to high‑single digits. The credit loss ratio is expected to improve slightly into the bottom half of the 75bps to 100bps through-the-cycle target range.

Operating expenses are expected to grow by low to mid‑single digits, resulting in positive operating JAWS and mid‑single digit pre‑provision profit growth. Return on equity (RoE) is expected to be around 16%, with higher other reserves supporting NAV but diluting RoE.

The CET1 ratio is projected to end 2026 at the top end of the 11.0% – 12.5% target range, and the 55% dividend payout ratio is expected to be maintained. Rand appreciation is anticipated to be a headwind to revenue and earnings.

Medium‑term targets are reaffirmed, including a RoE of 16%-19% for 2027-2030, with the RoE improving to well within that range by 2028, driven in part by reducing the cost‑to‑income ratio to approach 50%.