Absa reported interim results on Tuesday for the six months to 30 June, and at group level the numbers look steady. Headline earnings, the cleaned-up profit figure South African listed companies must report, rose 8% to R12.8bn. Revenue grew 4% to R58.8bn, the interim dividend went up 8% to 850 cents a share, and return on equity edged from 14.8% to 15.0%. Underneath that, one country did nearly all the work.
Where the growth came from
South African headline earnings rose 17% to R9.19bn on 8% revenue growth, lifting the country to 72% of group earnings. Africa Regions fell 10% to R3.62bn. Lower policy rates in key markets squeezed the region's lending margin from 7.82% to 7.35%, while South Africa's held steady at 3.78%, and a stronger rand trimmed the contribution further.
This is the first period Absa has reported its three business units on a pan-African basis, a change Kenny Fihla made in January after taking over as chief executive in June 2025. Personal and Private Banking grew headline earnings 12% to R4.11bn and Business Banking 5% to R2.74bn. Corporate and Investment Banking, the biggest of the three at R6.19bn and 47% of group earnings, managed 1%, held back by pricing pressure at home and a 42% jump in credit impairments in the rest of Africa.
The bits worth watching
Costs grew at the same 4% as revenue, nudging the cost-to-income ratio up to 53.4%. Credit went the other way: impairment charges fell 1% to R7.1bn, the credit loss ratio improved from 1.00% to 0.94%, and non-performing loans dropped 5% to R82bn with every business unit contributing. Capital is comfortable, with the common equity tier 1 ratio at 12.8%, above the top of the board's own 11.0% to 12.5% target range. Absa now serves 13.4 million customers across 17 countries, and lifted technology spend 7% to R8.8bn over the half.
Absa expects the South African economy to grow 1.5% this year, up from 1.1% in 2025, and rates to stay unchanged into early 2027. Its guidance is for low to mid single digit revenue growth, a return on equity of around 15%, and a dividend payout ratio of 55%. The interim dividend is payable on 21 September.
