Absa Group has announced a 16% increase in its earnings during the first half of 2025, despite facing a challenging global economy. The bank’s revenue grew by 5% to R56.49 billion, with net interest income rising 3% and non-interest income increasing by 10%. Its headline earnings grew 17%, and the bank declared an interim dividend of 785 cents, a 15% rise from the previous year. The return on equity improved slightly to 14.8%.
However, due to ongoing global uncertainties, especially caused by recent volatile US trade policies, Absa has lowered its South African GDP growth forecast for 2025 to just 0.9%. The bank expects the economy to improve slightly in 2026, reaching around 1.4%, supported by structural reforms and lower interest rates. Despite the weaker economic outlook, Absa remains confident in its long-term prospects, especially across Africa, where growth is projected to be slightly higher.
The bank’s outlook remains largely unchanged for 2025, with expectations of mid-single digit revenue growth, strong non-interest income, and steady loan and deposit increases. Absa also anticipates that its credit loss ratio will improve, maintaining a target of around 75 to 100 basis points across the cycle.
Looking ahead, Absa aims for a return on equity of around 15% in 2025, increasing to 16% by 2026. It also expects the weakening rand to support earnings this year, with Africa’s growth outpacing South Africa’s. Despite the global economic headwinds, the bank remains committed to its strategic reforms and long-term growth ambitions, confident that ongoing investments and favourable regional conditions will support its outlook.
While global uncertainties pose risks, Absa’s focus on infrastructure, reform, and regional support continues to underpin its positive long-term vision, keeping its guidance largely intact despite a cautious short-term outlook.