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| Absa Group, Chief Executive Officer - Kenny Fihla. |
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 (CET1) ratio of 12.5%, slightly lower than the prior year (12.7%)
Absa Group delivered strong earnings growth for the first half of 2025, reflecting the successful execution of its strategic priorities. Headline earnings rose 17% as credit impairments declined and pre-provision profit grew.
Revenue growth was underpinned by strong non-interest income and stable net interest income, reflecting solid divisional contributions. Geographically, the Group’s South African operations delivered double-digit earnings growth, mainly due to lower impairments, while Africa regions’ performance was supported by strong pre-provision profit growth and customer acquisition.
“Our interim earnings performance demonstrates good progress on strategic priorities during this period, including operational reorganisation, 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% decline in impairments played a significant role in driving earnings growth, supported by a robust collections strategy, credit model enhancements, and changes to lending criteria, particularly in vehicle asset finance and unsecured lending. The credit-loss ratio improved to 100 bps, at the top end of Absa’s through-the-cycle target range.
“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 target by 2027 under the productivity programme launched in 2024.
Business Unit Performance
The performance of Absa’s business units in the first half of 2025 reflects disciplined execution, with most reporting strong earnings growth.
| Business Unit | June 2025 Headline Earnings | Year-on-Year Change |
|---|---|---|
| Personal and Private Banking | R3.2 billion | ↑ 23% |
| Business Banking | R1.7 billion | ↓ 12% |
| Corporate & Investment Banking | R6.4 billion | ↑ 10% |
| Absa Regional Operations – Retail & Business Banking | R1.1 billion | ↑ 35% |
- Personal and Private Banking (PPB) delivered strong earnings growth, driven mainly by lower credit impairments, despite muted revenue due to modest loan growth and conservative lending risk appetite. Investments in digital capabilities remain a focus, including AI, data analytics, and cybersecurity enhancements.
- Business Banking (BB) underperformed, impacted by subdued revenue growth and higher credit-related impairments.
- Corporate and Investment Banking (CIB) reported solid earnings growth, benefiting from lower impairments and strong trading revenue, although net interest income remains constrained. CIB contributed more than half of Group earnings.
- Absa Regional Operations Retail and Business Banking (ARO RBB) posted strong results with revenue and pre-provision profit growth, supported by customer acquisition and fee income, offsetting higher credit-related impairments.
- Head Office, Treasury, and Other Operations reported a substantially reduced loss, aided by asset-liability optimisation and the discontinuation of hyperinflationary accounting in Ghana.
Non-Financial Performance
- Customer base increased 2% to 12.8 million.
- Digitally active customers rose 8% to 5 million.
- Digital innovation included the launch of the Kiganjani App in Tanzania, making financial management easier for customers.
- IT-related costs increased 5% to R8.2 billion, reflecting investments in digital capabilities, cybersecurity, and software licensing. These investments are expected to yield long-term benefits through automation, AI, and enhanced client solutions.
Absa also advanced its sustainable finance agenda, refining its ESG strategy to focus on high-impact sectors and advocating for regulatory support to unlock investment in decarbonisation and infrastructure.
Outlook
- South African economy expected to grow 0.9% in 2025 due to a weak start and the impact of US trade tariffs.
- Africa region GDP growth forecast at 4.8% in 2025.
- Despite global uncertainties, lower inflation, policy rate cuts, infrastructure investment, favourable weather, and reform momentum are expected to support the medium-term outlook.
For the full year 2025, Absa maintains guidance for mid-single digit revenue growth and a return on equity of around 15%. A weaker rand is expected to support earnings, with Africa regions’ performance anticipated to outpace South Africa.
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