Absa Group (ABG) Trading Update summary

Strategic Priorities and Business Focus

• Four strategic pillars: customer-led growth, diversification by geography and business line, efficiency, and new growth opportunities.

• Shift from product-led to client-segment focus, aiming to build competitive advantages in chosen segments.

• Diversification targets reducing over-reliance on South Africa, Ghana, and Kenya, with increased focus on other African markets.

• Growth initiatives include digitization, wealth offering expansion, value-added services, and targeted acquisitions.

• Strategy rollout supported by cultural change initiatives and alignment of incentives to execution.

Financial Guidance and Performance Outlook

• 2025 guidance unchanged: mid-single-digit revenue growth, stronger non-interest income, muted net interest income, and mid-to-high single-digit loan growth.

• ROE expected around 15% in 2025, rising to 16% in 2026, with medium-term target of 16%-19% by 2027-2030.

• Cost-to-income ratio to be slightly higher than 53.2% in 2024, approaching 50% by 2028.

• Dividend payout ratio maintained at 55%, CET1 ratio to finish 2025 at top end of 11%-12.5% range.

• Credit loss ratio expected to improve to upper half of 75-100bps range, with lower impairments.

Regional and Business Segment Performance

• Africa regions expected to deliver stronger GDP and earnings growth than South Africa in 2025 and 2026, with CIB leading expansion.

• Business Banking and PPB to improve, with focus on client coverage and ancillary revenue.

• Wholesale loan growth outpacing retail, with retail activity subdued but showing early signs of improvement.

• Fee income growth remains moderate due to competition and digital shift, but value-added services and trading revenue are growth drivers.