Absa Group Reports a 17% Boost in Interim Earnings with Robust Expansion in African Operations
Absa Reports Strong Earnings Growth in Q2 2025
Absa Group, a leading financial services provider, has announced impressive financial results for the second quarter of 2025, with a 17% increase in headline earnings to R11,874 million and a 16% rise in diluted headline earnings per share to 1,422.9 cents [3].
The growth in earnings was driven by strong non-interest income and stable net interest income. A 14% decrease in impairments played a significant role in delivering earnings growth [1].
Business Unit Performance
The Personal and Private Banking (PPB) business unit delivered strong earnings growth, primarily driven by a significant reduction in credit impairments [1]. However, the Business Banking (BB) earnings fell short of expectations and were impacted by subdued revenue growth and higher credit-related impairments. In contrast, the Corporate and Investment Banking (CIB) reported solid earnings growth, benefitting from lower credit-related impairments and robust trading revenue [1].
The Absa Regional Operations Retail and Business Banking (ARO RBB) showed strong growth in revenue, pre-provision profit, and headline earnings, supported by strong customer acquisition and fee income growth [1]. The performance of the Africa regions was mainly driven by strong pre-provision profit growth and customer growth [1].
Digital Initiatives and Pan-African Expansion
The impact of digital initiatives and Pan-African expansion has been pivotal in the group's performance, contributing to risk diversification and enabling sustainable growth despite inflation and energy supply risks in South Africa [1]. The group's customer base increased 2% to 12.8 million in the first half of the year, and Group-wide digitally active customers increased 8% to 5 million customers [2].
Sustainable Finance Agenda
Absa is continuing its journey to advance its sustainable finance agenda and is refining its Environmental, Social, and Governance (ESG) strategy to focus on high-impact sectors [2]. The group expects South Africa's economy to expand by only 0.9% in 2025, while GDP across its African regional markets is projected to grow by 4.8% [2].
Cost Management and Productivity
Absa achieved R2.4 billion of the R5 billion savings it had committed to achieving by 2027 under a productivity programme launched in 2024 [2]. The group increased its investment in IT-related spend, with costs increasing 5% to R8.2 billion [2].
Outlook
Absa has kept its full-year 2025 guidance largely unchanged, projecting mid-single digit revenue growth and a return on equity of about 15% [2]. Quarterly reviews focus on in-depth business unit performance and governance to maintain this trajectory [4]. Additionally, Absa increased dividends per share by 15%, with a reported return on equity (ROE) of 14.8%, underlining strong financial health and shareholder returns [5].
Sources: [1] Absa Group Limited, 2025 Interim Results Presentation, 12 July 2025. [2] Absa Group Limited, 2025 Half-Year Results, 12 July 2025. [3] Absa Group Limited, 2025 Interim Results Media Statement, 12 July 2025. [4] Absa Group Limited, 2025 Half-Year Results Presentation, 12 July 2025. [5] Absa Group Limited, 2025 Interim Results Presentation, 12 July 2025.
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