Half Year 2026 Absa Group Ltd Earnings Call Transcript
Key Points
- Headline earnings grew 8% to ZAR12.8 billion, with return on equity improving to 15%, above the cost of equity.
- South African business delivered strong performance with earnings growth of 17%, and Personal and Private Banking earnings up 12% with ROE improving to 15.2%.
- Customer loans grew 6% and customer deposits increased 5%, reflecting healthy client activity and balance sheet expansion.
- Credit loss ratio improved to 94 basis points, back within the through-the-cycle target range, with non-performing loans decreasing 5%.
- CET1 ratio improved to 12.8%, above the top end of the target range, and interim dividend per share increased 8%.
- Net interest margin narrowed 12 basis points to 446 basis points, driven by endowment compression in Africa Regions due to faster-than-expected rate cuts, particularly in Ghana.
- Africa Regions revenue and earnings declined, with earnings down 10% due to lower policy rates in key markets like Ghana and Kenya and a stronger rand.
- Fee and commission income growth was disappointing at 3%, impacted by higher scheme costs, reward costs, and declines in cash as clients shift to PayShap.
- CIB Africa Regions earnings fell 12%, with transactional banking income down 13% due to competitive pricing in South Africa and lower rates in Africa Regions.
- Operating expenses grew 4%, resulting in slightly negative operating JAWS and a cost-to-income ratio of 53.4%, with cost growth expected to remain a challenge.
Good morning. On behalf of Absa's leadership team, thank you for joining us for our 2026 interim results presentation. I will begin briefly reflecting on our strategy and why we are still confident about the future before moving on to our first-half performance and the progress we are making against our strategic priorities. Deon will then take you through the detailed financial results, after which I will conclude with our medium-term outlook.
As I reflect on Absa today, I remain convinced that the opportunities ahead of us are significant and that we are focused on the right priorities. Our strategy remains anchored on four pillars: organizing ourselves around the customer and being customer-led, capturing opportunities across our chosen markets to build a diversified pan-African business, driving excellence throughout the organization, and exploring new growth opportunities.
These pillars can only be enabled by our people, combining deep talent and strong leadership to build a culture of empowerment and competitive spirit.
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
