NAIROBI, Kenya, Aug 15 – Absa Group Limited grew its earnings by 27 per cent to Sh80.1million (11million rand) for the first half of the year.
The Group reported a solid pre-prevision profit for the first half of the year, supported by revenue which rose by 14 per cent to Sh165billion(22.8billion rand) , underpinned by growth across its business units and supported by a rebound in the insurance business in South Africa and increased interest rates across key markets.
The performance was attributed to a strong economic recovery from the adverse effects of the COVID-19 pandemic on the economy in 2020.
“Our strong results reaffirm the strategic choices we made in 2018 and are testimony to the work we have undertaken in creating a business that is closer to customers,” said the group’s Chief Executive Officer (CEO) Arrie Rautenbach.
In June, Absa announced a strengthened and more diverse executive leadership team.
Absa refined its operating model, adopting a flatter structure, bringing management closer to customers and allowing the Group to accelerate strategy execution. Effective 1 July, Absa has five business units, from two previously.
All business units reported improved earnings and stronger returns during the first half.
“All of our key measures are significantly above the pre-Covid levels of the first half of 2019,” said Jason Quinn, Absa Group Financial Director.
“The strategic decisions we made in the last few years have ensured that we remain capital generative and we are appropriately provisioned as we face a tougher environment,” he said.
The Group balance sheet remains well positioned, with Common Equity Tier 1 (CET1) having improved. CET1 and liquidity levels remain well ahead of regulatory and Board target ranges.
Absa recorded a 14 per cent rise in revenue which solidifies the growth across the company’s units which was further supported by bouncing back of the insurance business in South Africa in addition to the increased rates across key markets.
Moreover, the net interest income rose by 12 per cent and the non-interest income rose by 18 per cent.
All the business units recorded improved earnings and more robust returns in the first half-year period.
The group also noted an 11 per cent growth that was spent in IT for enhanced digital performance and improved customer experience which translated to Sh43.6billion(6 billion rand).
The investment in IT led to a growth in the number of digitally active customers in addition to a 10 per cent increase to 2.2 million in retail and banking in South Africa.
