Africa-Press – Uganda. Absa Group delivered strong earnings growth for the first half of 2025, reflecting the successful execution of its strategic priorities.
Headline earnings increased 17%, supported by lower credit impairments and solid pre-provision profit growth.
Revenue increased, underpinned by robust non-interest income growth and stable net interest income. Double-digit earnings growth was achieved in South Africa, mainly due to lower impairments, while the Africa region’s performance was driven by strong customer growth and higher pre-provision profits.
“Our interim earnings performance demonstrates good progress on strategic priorities, including operational reorganisation, divisional alignment, and enhanced client focus. Headline earnings rose 17% and return on equity continues to improve, underlining the benefit of our diversified footprint across 16 countries,” said Kenny Fihla, Absa Group Chief Executive Officer, who assumed the role on June,17 2025.
A 14% decrease in impairments significantly supported earnings, reflecting improvements in collections, credit models, and new lending criteria, particularly in vehicle asset finance and unsecured lending.
The credit-loss ratio reduced in line with guidance, sitting at 100 basis points – the top end of Absa’s through-the-cycle target range.
“Key contributors to our strong performance include a notable improvement in the credit-loss ratio, robust growth in non-interest income – especially trading – and disciplined cost management supported by our productivity programme,” said Deon Raju, Absa Group Financial Director.
Absa has achieved R2.4 billion of the R5 billion savings committed under its productivity programme, launched in 2024, and is on track to deliver the full target by 2027.
“While operating in a highly competitive environment, we remain focused on opportunities to grow our balance sheet, expand our customer base, and strengthen competitive positioning across markets,” added Raju.
Absa Group business units’ performance in the first half of 2025 reflects the benefits of disciplined execution, with most units reporting strong earnings growth. The newly formed Personal and Private Banking (PPB) business unit delivered strong earnings growth, primarily from reduced credit impairments.
Revenue growth remained muted due to modest industry loan expansion and a conservative risk appetite. PPB continues to invest in digital platforms, AI, data analytics, and cybersecurity.
Business Banking (BB) earnings underperformed, impacted by subdued revenue growth and higher impairments.
Corporate and Investment Banking (CIB) reported strong earnings growth on the back of lower impairments and robust trading revenue, though net interest income growth remained constrained. CIB continues to be the Group’s earnings anchor, contributing more than half of Group earnings.
Absa Regional Operations Retail and Business Banking (ARO RBB) delivered strong revenue and profit growth, driven by customer acquisition and fee income, partially offset by higher credit impairments.
Head Office, Treasury and other operations reported a smaller earnings loss, supported by asset-liability optimisation and the discontinuation of hyperinflationary accounting in Ghana.
On the non-financial front, Absa Group’s customer base grew 2% to 12.8 million, with digitally active customers up 8% to 5 million.
The launch of the Kiganjani App in Tanzania has enhanced mobile banking accessibility. IT-related spend increased 5% to R8.2 billion, reflecting investment in digital capabilities, AI, and cybersecurity.
The Group continues to advance its sustainable finance agenda and refine its ESG strategy, focusing on high-impact sectors while advocating for regulatory support to unlock further investment in industrial decarbonisation and infrastructure.
Looking ahead, the South African economy is expected to grow 0.9% in 2025 amid trade tariffs and weak activity.
Africa region GDP is forecast at 4.8%, supported by reforms, multilateral support, favourable weather, and infrastructure investment.
Full-year 2025 guidance remains largely unchanged, with mid-single-digit revenue growth and return on equity around 15% expected. A weaker rand is likely to provide a modest earnings boost, while Africa regions’ earnings growth is expected to outpace South Africa.
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