Absa Group (ABG) investor relations material

Executive summary

• Headline earnings grew 17% year-over-year to nearly ZAR12bn, with diluted HEPS up 16% and dividends per share up 15% on a 55% payout ratio.

• ROE improved to 14.8% from 14.0%, with a target of 16% by 2026.

• Management transition and segment restructuring completed, with a focus on Pan-African integration and client-centricity.

• Delivered solid earnings growth in 1H25 despite a challenging macroeconomic environment.

• Focused on sustainable franchise-driven growth, capital allocation, and productivity improvements.

Financial highlights

• Net interest income up 3% year-over-year to R36.3bn; net interest margin narrowed to 4.58%.

• Noninterest income rose 10% to R20.2bn, accounting for 36% of group revenue; total revenue up 5%.

• Operating expenses increased 6% to R30.0bn, raising the cost-to-income ratio to 53.2%.

• Credit impairments decreased 14% to R7.2bn, improving the credit loss ratio to 1.00% from 1.23%.

• CET1 capital ratio at 12.5%, at the top end of the board target range.

Outlook and guidance

• 2025 guidance unchanged: mid-single digit revenue and deposit growth, with non-interest income outpacing net interest income.

• Customer loan growth projected at mid- to high-single digits; credit loss ratio to remain at the top end of the 75–100bps target range.

• ROE expected around 15% for 2025, with a 16% target for 2026; dividend payout ratio to stay at 55%.

• Africa regions expected to deliver stronger earnings growth than South Africa.

• Operating expenses to grow mid-single digit, with a slightly higher cost-to-income ratio.