Slides
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18 August 2025 Absa Group 1H25 financial results
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Kenny Fihla Group Chief Executive
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Charles Russon
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4 Difficult macro backdrop that remains highly uncertain Global environment Sub-Saharan Africa South Africa • New US administration increased global uncertainty significantly • Tariffs increase inflation pressure • Monetary policy trends reflect country-specific conditions • Elevated geopolitical tensions • Regulatory fragmentation • Social tension in some markets • Disinflation, policy rate cutting • Improving weather conditions • Large infrastructure investment • Better GDP growth expected than SA • Sovereign debt challenges continue • Currency appreciation versus Rand • Disappointing GDP growth • US tariffs raised materially • Increased tension within government of national unity • Lower business/consumer confidence • Inflation benign and shallow rate cuts
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5 Continued progress in 1H25 Key performance metrics 1H24 1H25 Change (%) Diluted HEPS (c) 1 227.7 1 422.9 16 Ordinary DPS (c) 685 785 15 RoE (%) 14.0 14.8 Net interest margin (bps) 469 458 Cost-to-income ratio (%) 52.7 53.2 Credit loss ratio (bps) 123 100 NAV per share (R) 180 200 11 CET1 ratio (%) 12.7 12.5
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6 Focus on execution priorities • Franchise driven sustainable growth • Client franchise focus • Top-down precise capital allocation • Productivity and efficiency programme for future investment
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7 Most businesses grew earnings and Head Office trimmed Headline earnings (Rbn) 5.9 2.6 1.9 0.8 6.4 3.2 1.7 1.1 (0.5) CIB Personal and Private Banking Business Banking ARO RBB Head Office, Treasury, other 1H24 1H25 Pre-provision profit growth: (47%) 23% (12%) 35% 10% RoRC: 5% (3%) (7%) 20% - 21.8% 14.8% 19.1% 14.5% - (1.0)
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8 CIB momentum from diversified franchise Headline earnings (Rm) 2 280 3 583 5 863 3 105 2 758 2 128 4 312 6 440 3 606 2 834 Corporate Bank Investment Bank Total CIB South Africa ARO 1H24 1H25 (7%) 20% 3% Pre-provision profit growth: (9%) 15% 7%5% 4% 10% 16% Note: In constant currency total CIB headline earnings grew 9%
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9 1 526 125 719 39 546 ( 377) 2 578 1 492 269 775 332 614 (314) 3 168 Transactions and Deposits Unsecured Lending Home Loans Vehicle and Asset Finance Insurance SA Retail Other Personal and Private Banking 1H24 1H25 Headline earnings (Rm) PPB lending businesses drove earnings recovery (2%) 115% 12% >100% Pre-provision profit growth: 8% (17%) 23% (8%) (6%) 2% (2%) - (3%) 125
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10 Muted Business Banking revenue growth 3.4 3.1 1.1 3.3 3.2 1.0 Lending products Transactional and deposits Payments 1H24 1H25 Business Banking revenue (Rbn) (3%) (2%) 3% 1.9 1.7 1H24 1H25 Business Banking earnings (Rbn) (12%)
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11 ARO RBB Banking operations drove strong growth 782 28 810 1 108 1 092 Banking operations Insurance operations ARO RBB 1H24 1H25 Headline earnings (Rm) RoRC 15.6% (4.1%) 14.5% <(100)% (16) 42% 35%
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12 Solid growth across South Africa and Africa regions 6 589 3 591 10 180 7 828 4 046 11 874 South Africa Africa regions Group Headline earnings (Rm) 1H24 1H25 19% 13% Pre-provision profit growth: RoRC: 14.3% 16.9% 17% 0% 12% 4%
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Deon Raju Group Financial Director
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14 Pre-provision profit and improving CLR drove earnings Note: * Includes other expenses, JVs and associates, taxation, non-controlling interests, headline earnings adjustments and net monetary costs 10.2 11.91.0 1.8 (1.1) 1H24 Net interest income Non-interest income Operating expenses Credit impairments Other* 1H25 Headline earnings (Rbn) Revenue up 5% 3% 10% (14%)6% 17% 7% Pre-provision profit up 4% 1.7 (0.5)
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15 Modest net interest income growth from South Africa 13.0 5.2 6.1 10.6 12.8 5.3 7.0 10.9 Personal and Private Banking Business Banking ARO RBB CIB Divisional net interest income (Rbn) 1H24 1H25 (1%) 1% 3% 15%
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16 Deposit margin the main drag on Group NIM Change in net interest margin* (basis points) Note: * average interest bearing assets; ** group equity endowment; *** interest rate risk management 462 469 4584 3 8 1 (5) (1) (15) (6) 1H23 1H24 Pricing Mix Pricing Mix Endowment Capital ** Hedge *** Other 1H25 Loans (6) Deposits (17) (11) 7
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17 Broad-based deposit growth, CIB and ARO RBB strong Customer deposits (Rbn) 339 216 128 470 1262 363 235 150 539 1402 Personal and Private Banking Business Banking ARO RBB CIB Group 1H24 1H25 8% 17% 11% 7% 15%
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18 Relatively moderate loan growth … 504 146 84 495 1,233 517 154 91 553 1,319 Personal and Private Banking Business Banking ARO RBB CIB Group Net customer loans (Rbn) 1H24 1H25 3% 12% 9%5% 7%
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19 … with muted Private and Personal Banking loan growth 307 116 10 70 313 122 11 71 Home Loans Vehicle and Asset Finance Transactions and Deposits Unsecured Lending 1H24 1H25 Private and Personal Banking net customer loans (Rbn) 4% 5% 2% 1%
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20 Strong Markets drove non-interest income growth 12.5 3.7 1.5 13.2 5.1 1.5 Net fee and commission Net trading Insurance Other 1H24 1H25 Non-interest income (Rbn) 36% 0.7 (47%) 5% Note: Net trading excludes the impact of hedge accounting 0.3 5%
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21 Cost growth reflects inflationary growth 52.3 50.6 52.7 53.2 1H22 1H23 1H24 1H25 1H25 Rm Change % Staff 17 294 7 Property 981 1 Technology 3 581 7 Depreciation 1 583 2 Professional fees 1 435 6 Marketing 1 169 6 Communication * 828 5 Cash transportation 506 (18) Amortisation 1 429 3 Other ** 1 238 20 Total 30 044 6 Note: * printing and stationery plus telephone and postage; ** includes equipment costs, fraud, travel and entertainment, auditors, other costs etc Cost-to-income ratio (%)
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22 Lower CIB and PBB charges reduced credit impairments Credit impairment charge (Rm) 6 298 401 711 915 5 307 494 818 516 Personal and Private Banking Business Banking ARO RBB CIB 1H24 1H25(16%) 23% 15% (44%) Note: Excludes Head Office credit impairment charge of R38m, (1H24: R16m release).
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23 Credit loss ratio improved materially 127 123 100 1H23 1H24 1H25 Group credit loss ratio (bps) Target range 75-100 Credit loss ratio (%) 1H24 1H25 PPB 2.34 1.93 Unsecured Lending 8.69 7.66 Home Loans 0.49 0.47 Vehicle and Asset Finance 2.32 1.66 Business Banking 0.54 0.64 ARO RBB 1.61 1.69 CIB 0.33 0.18 Group 1.23 1.00
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24 NPLs improved slightly, coverage remains strong 6.14 6.12 5.90 1H24 FY24 1H25 Non-performing loans (%) 4.2 4.1 4.0 1H24 FY24 1H25 Total loan coverage (%) 47.1 47.4 46.9 1H24 FY24 1H25 NPL coverage (%)
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25 1 007 538 0.0 (385) (253) 169 1H24 Group Treasury Ghana hyperinflation accounting Costs/taxes 1H25 Head Office loss improved significantly in 1H25 Head Office, Treasury and other operations loss (Rm)
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26 12.6 12.5 1.0 (0.6) (0.5) FY24 RWA Profit Dividend 1H25 CET1 ratio at top end of our Board target range Group common equity tier 1 ratio (%) Board target range 11.0% - 12.5%
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27 2025 outlook Revenue Mid-single digit revenue growth with stronger growth in non-interest revenue than net interest income. Balance sheet Credit impairments Operating expenses Returns Capital Mid- to high single digit customer loan growth and mid-single digit customer deposit growth. Credit loss ratio expected to improve to top end of through-the-cycle target range of 75 to 100bps. Mid-single digit growth in operating expenses, producing a slightly higher cost-to-income ratio from 53.2% in 2024 and low to mid-single digit pre-provision profit growth. RoE around 15%, from 14.8% in 2024. Other reserves a modest drag on RoE. Group CET1 ratio expected to finish 2025 at top end of 11.0% to 12.5% Board target range. Dividend payout ratio around 55%. Geographic split Weaker Rand a slight earnings underpin in 2025 and Africa regions earnings growth should be noticeably stronger than South Africa.
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Kenny Fihla Group Chief Executive
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29 Disclaimer Certain statements (words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘believes’, ‘intends’, ‘plans’, ‘may’, ‘will’ and ‘should’ and similar expressions in this document are forward looking. These relate to, among other things, the plans, objectives, goals, strategies, future operations and performance of Absa Group Limited and its subsidiaries. These statements are not guarantees of future operating, financial or other results and involve certain risks, uncertainties and assumptions and so actual results and outcomes may differ materially from these expressed or implied by such statements. We make no express or implied representation or warranty that the results we anticipated by such forward-looking statements will be achieved. These statements represent one of many possible scenarios and should not be viewed as the most likely or standard scenario. We are not obligated to update the historical information or forward looking statements in this document.
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30 Appendix: Divisional RoRC restatement FY24 As previously reported (%) Reportable segment changes1 (%) Business portfolio2 (%) Revised capitalisation rate3 (%) Restated (%) Personal and Private Banking 19.3 (1.3) (1.2) 16.8 Business Banking (previously Relationship Banking) 24.9 0.3 - (2.3) 22.9 ARO RBB 12.4 0.6 (1.2) 11.8 CIB 22.5 0.6 (1.9) 21.2 1 Reportable segment changes relates to the combination of Everyday Banking, Product Solutions Cluster and Private Wealth Banking into PPB 2 Business portfolio changes relates to revised cost allocation and the allocation of minority interest to ARO RBB and ARO CIB 3 Revised capitalisation rates relates to the increase in rate from 11% to 12% on RWAs. Note that PPB includes non-banking equity pertaining to Insurance SA
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31 Appendix: Head Office reallocations FY24 Rm PPB BB ARO RBB CIB Head Office Depositor insurance (120) (70) (6) 196 B-BBEEE costs (190) (60) (140) (70) 460 Other (mainly recharges) (126) (65) (107) 7 291 Headline earnings impact (368) (159) (165) (60) 752 Net change in regulatory capital 2 774 1 442 (612) 2 822 Rise in capital allocation to 12% from 11% of RWAs 2 774 1 442 1 283 4 441 Impact of minority interest relief applied to Africa regions business units (1 895) (1 619)