Absa half-year revenue climbs 13% to R52.3bn
Arrie Rautenbach, Absa Group Chief Executive Officer joins CNBC Africa to go through their latest company results.
Mon, 14 Aug 2023 15:52:13 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The Absa Group reported a strong and resilient performance in the face of challenging economic conditions, with a 13% increase in revenue to R52.3 billion.
- The South African consumer has been impacted by interest rate hikes, resulting in loan losses across consumer portfolios. Absa is providing support through payment plans and forbearance measures.
- The company's businesses outside South Africa, particularly in CIB and RBB sectors, have showcased strong growth, demonstrating the benefit of market diversification.
Absa Group, one of Africa's leading financial institutions, has released its half-year results outlining a strong and resilient performance in the face of challenging economic conditions. The Group Chief Executive Officer, Arrie Rautenbach, joined CNBC Africa to discuss the company's performance and shed light on the key factors influencing their results. The company reported a 13% increase in revenue to R52.3 billion, with headline earnings per share up 3% and headline earnings up 2% from the previous year. Rautenbach highlighted the strength of the balance sheet, capital levels, liquidity, and coverage levels, which have positioned the company well to navigate the tough macro environment.
Rautenbach pointed out two significant stories within the results – the performance in South Africa and the growth in markets outside of the country. While South Africa faces challenges with low growth rates and consumer distress, Absa has seen strong growth in its businesses outside the country. The South African consumer has been feeling the impact of interest rate hikes, with loan losses affecting the consumer portfolios. The company has been working closely with consumers to provide support through payment plans and forbearance measures to mitigate the impact on their finances.
The company's Corporate and Investment Banking (CIB) business witnessed significant earnings growth, particularly in markets outside South Africa. The Regional and Business Banking (RBB) businesses also reported strong performance, with earnings more than doubling from the previous reporting period. Diversification across different markets has proven beneficial for Absa, with positive growth rates across all regions.
Despite challenges in some African markets like Ghana, Kenya, and Zambia, Absa remains optimistic about growth opportunities. Close monitoring of sovereign risks and active engagement with governments and regulatory bodies in those markets have enabled the company to navigate potential risks. The company continues to see good underlying growth across its businesses in Africa.
In response to questions about the economic outlook for South Africa, Rautenbach expressed cautious optimism, citing the need for higher growth rates to address structural issues like unemployment. He emphasized the importance of collaborative efforts between the private sector and the government to tackle infrastructural challenges. The company's focus on renewable energy projects, financial inclusion, and diversity and inclusion initiatives underscores its commitment to sustainable growth and development.
Looking ahead, Absa is committed to leveraging its strong financial position and market presence to drive growth and support economic recovery efforts in South Africa and across the continent. Despite the current challenges, the company remains confident in its ability to weather the storm and emerge stronger in the long run.