South Africa · Delayed Price · Currency is ZAR · Price in ZAc Absa Group Earnings Call Transcripts
Fiscal Year 2025
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Headline earnings rose 12% to nearly ZAR 25 billion, with Africa Regions driving growth and ROE improving to 15%. CIB and PBB segments performed strongly, while Business Banking faced challenges. 2026 guidance targets mid-single-digit revenue growth and ROE around 16%.
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Management outlined a strategy focused on customer-led growth, diversification, efficiency, and new opportunities, with financial guidance reaffirming mid-single-digit revenue growth and improving ROE targets. Africa regions and CIB are expected to drive earnings, while cost containment and leadership changes support execution.
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Headline earnings rose 17% and ROE improved to 14.8%, with strong growth in Africa regions offsetting muted South African performance. Cost-to-income ratio increased slightly, while credit loss ratio improved to the top end of the target range.
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Earnings are set to grow by mid-teens in the first half, with improved ROE and well-managed costs. Asset growth and NII are expected to strengthen in the second half, while NIR growth will moderate. Ghana's turnaround and productivity initiatives support the positive outlook.
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The AGM reviewed strong financial recovery, board changes, and progress in ESG and diversity. All resolutions, including director appointments and remuneration policies, were passed. Strategic focus remains on digital transformation, culture, and sustainable finance.
Fiscal Year 2024
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Headline earnings rose 10% to over ZAR 22 billion, with ROE at 14.8% and all divisions growing earnings. Cost-to-income ratio held at 53%, credit loss ratio improved, and dividend per share increased 7%. 2025 guidance targets further ROE improvement, mid-single-digit revenue growth, and continued productivity gains.
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Headline earnings fell 5% year-over-year amid a tough operating environment, with revenue and loan growth offset by higher costs and credit impairments. ROE dropped to 14%, and the cost-to-income ratio rose to 52.7%. Outlook for 2024 is cautious, with mid-single-digit growth expected.
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Earnings for H1 2024 are expected to decline, with revenue growth revised down due to weaker non-interest income and net interest margin compression. Cost actions and a productivity program are underway, while credit quality shows improvement in retail portfolios. ROE guidance for 2024 is now 14%-15%.