Afrique du sud: Absa Group on a growth trajectory despite the breakthrough of Covid-19

Absa Group Limited, a financial services group, released its financial results for the first half of 2021 on Monday (August 16th). The data shows that the group’s overall profit quintupled to reach 8.6 billion rand (580 million USD). , which is higher than pre-coronavirus pandemic levels.

This performance is supported by resilient growth in earnings before provisions and a significant decrease in impairments.

Absa’s Retail and Business Banking (RBB), which generates the bulk of the group’s revenue, increased its overall profits eightfold to 4.2 billion rand (283 million USD). RBB has invested heavily in digital and has made tremendous strides in this area, including launching Apple Pay recently, Absa said.

“These results are a testament to the decisions we took during the crisis to support our clients and take a prudent approach to preserve capital and liquidity,” said Jason Quinn, Acting CEO of the Absa Group.

For his part, Absa Group’s interim CFO Punki Modise said “overall profits have exceeded pre-Covid levels”, adding that the “basic Tier 1 capital ratio has fallen. strengthened further to the upper end of our target range ”. The group’s balance sheet, he points out, remains resilient and returns are now greater than the cost of equity.

In addition, the Absa Group announced that it had raised 7 billion rand (500 million USD) as part of an additional Tier 1 Offshore Hybrid Bond (“AT1”) issue.

In its outlook, the group said it anticipates a number of risks to its growth forecast for the rest of the year and recognizes that the impact of Covid-19 remains a significant uncertainty.

The bank expects the South African economy to grow 4% this year compared to the 7% decline last year, a slightly improved outlook compared to the 3% growth forecast in March.

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