Absa Group (ABG) H1 2025 earnings summary

Executive summary

• Headline earnings rose 17% year-over-year to R11.87bn, with ROE improving to 14.8% from 14.0% despite a volatile macroeconomic environment.

• Management transition completed smoothly, with a renewed focus on leadership stability and client-centric strategy.

• Focused on sustainable franchise-driven growth, capital allocation, and productivity improvements.

• Segment restructuring integrated Product Solutions, Everyday Banking, and Private Wealth into Personal and Private Banking; prior periods restated accordingly.

Financial highlights

• Headline earnings grew 17% to nearly R12bn, with diluted HEPS up 16% to 1,422.9c and ordinary DPS up 15% to 785c.

• Total revenue increased 5% to R56.5bn; net interest income up 3% to R36.3bn and non-interest income up 10% to R20.2bn.

• Operating expenses grew 6% to R30.0bn, raising the cost-to-income ratio to 53.2%.

• Credit loss ratio improved to 1.00% from 1.23% year-over-year.

• CET1 capital ratio at 12.5%, at the top end of the Board's target range.

Outlook and guidance

• Expect mid-single digit revenue and deposit growth for 2025, with non-interest income outpacing net interest income and stronger loan growth.

• Credit loss ratio anticipated at the top end of the 75–100 basis point range.

• ROE targeted at around 15% for 2025, with a longer-term goal of 16% by 2026.

• Dividend payout ratio to be maintained at approximately 55%.

• Africa regions expected to deliver stronger earnings growth than South Africa.