Absa Group reported a 10% rise in full-year headline earnings, driven by improved performance in its South African operations. Total income for the year increased by 5% to R109.9 billion, while headline earnings reached R22.06 billion. The group’s SA division performed well, with earnings climbing 14%, largely due to better credit performance in its Everyday Banking and Product Solutions Cluster. Growth in non-interest revenue also supported these results. Absa’s operations in Africa experienced an 8% rise in headline earnings, although currency fluctuations and Ghana’s hyperinflation impacted overall performance. The bank declared a dividend of 1,460c per share, up 7% from the previous year.
Key performance metrics reflected steady progress, with gross loans and advances increasing by 6.2% and deposits rising 12.2%. The group’s net interest income rose 4.5% to R71.1 billion, supported by growth in customer advances and deposits. However, slight margin pressure due to higher cash reserve requirements and slower lending in certain portfolios limited further gains. Absa’s return on equity increased to 14.8%, with the latter half of the year showing stronger returns of 15.5%. Lower impairments, which dropped to R14.3 billion from R15.5 billion, contributed to improved credit performance. The bank’s Product Solutions Cluster saw the strongest earnings growth at 38%, followed by Everyday Banking with an 18% increase.
Looking ahead, Absa remains optimistic about South Africa’s economic outlook, citing positive developments such as improved Eskom performance, early signs of Transnet’s recovery, and higher household incomes. The group expects SA GDP growth of 2% in 2025 and 2026. Absa also forecasts Africa’s regional growth to accelerate to 5.3%, supported by improved weather conditions, infrastructure investment, and multilateral funding. The bank expects to improve its credit loss ratio to the upper end of its target range and aims to maintain a dividend payout ratio of about 55% in 2025. Absa is targeting an ROE of over 15% for 2025 and 16% for 2026.