Absa Group reported a 12% increase in headline earnings to $1.52 billion (R24.8 billion) for the year ended 31 December 2025, supported by stronger contributions from its non-South African operations and improved credit quality.
Revenue rose 5% to $7.07 billion (R115.7 billion), while pre-provision profit increased 4% to $3.27 billion (R53.5 billion). Credit impairments declined 6% to $820 million (R13.4 billion), reducing the credit loss ratio (CLR) to 88 basis points from 103 basis points, within the group’s through-the-cycle target range.
Group Chief Executive Kenny Fihla said the results reflected stronger credit outcomes and growth across the bank’s regional franchise.“Our results show clear momentum from disciplined execution, sharper client focus and stronger credit outcomes,” Fihla said.
Africa Regions drive growth
Operations outside South Africa delivered the strongest growth during the year.Headline earnings from Personal & Private Banking and Business Banking in Africa Regions rose 51% to $154 million (R2.5 billion). Group customer numbers increased to 13.1 million, largely driven by expansion in these markets.
Within Corporate & Investment Banking, headline earnings grew 14% to $795 million (R13 billion), supported by resilient trading income and client activity.
South African performance more subdued
Growth in South Africa remained more modest. Headline earnings in Personal & Private Banking increased 7% to $459 million (R7.5 billion) as credit quality improved, while Business Banking earnings declined 8% to $239 million (R3.9 billion) amid margin pressure.
Costs edge higher
Operating expenses rose 6% to $3.80 billion (R62.2 billion), pushing the cost-to-income ratio to 53.8% from 53.2%.
Absa said cumulative productivity savings of $190 million (R3.1 billion) since 2024 helped fund increased investment in digital platforms and cybersecurity, with IT spending rising 6% to $1.02 billion (R16.7 billion).
Capital and returns strengthen
The group’s balance sheet remained resilient.
- Return on equity (RoE): 15%
- Common Equity Tier 1 (CET1) ratio: 12.7%
The board increased the ordinary dividend by 12% to 100 cents per share, maintaining a 55% payout ratio.
Group Financial Director Deon Raju said stronger credit performance and customer activity supported continued strategic investment.
Outlook
Absa expects mid-single-digit revenue growth in 2026, with non-interest income expected to lead expansion. The group also projects:
- mid- to high-single-digit growth in advances and deposits
- credit loss ratio trending toward the lower end of the 75–100 basis point range
- mid-single-digit pre-provision profit growth.
- return on equity of around 16%.
Medium-term targets remain unchanged, with the bank aiming for RoE of 16–19% and a cost-to-income ratio approaching 50% by 2028–2030.
Absa shares edged higher on the Johannesburg Stock Exchange following the results announcement.
(Conversions use the prevailing USD/ZAR rate of approximately as of March 13, 2026.)
