Absa Group Limited recorded a three per cent increase in revenue from R41.2 billion in the first half of 2021 compared with R40.1 billion recorded the same period last year.
Additionally, the Group’s headlined earnings grew five-fold to R8.6 billion from 1.5 billion, which is higher than pre-pandemic levels.
This was contained in the financial results for the first half of 2021 released yesterday during a virtual press conference.
The financial services provider, which generates most of its income from its operations in South Africa, resumed dividend payments as the economic effects of the pandemic eased within the period.
Absa Group Interim Financial Director, Punki Modise, addressing journalists said the group further strengthened its capital reserves during the period and maintained a strong liquidity position in the first half.
She said the recovery from the pandemic was broad-based as all business units reported strong growth from a low base in the prior year.
“Pleasingly, our headline earnings exceeded pre-COVID levels and our common equity tier 1 capital ratio strengthened further to the top end of our target range. The Group’s balance sheet remains resilient and returns are now above cost of equity,” she said.
A press statement issued by the Group said Retail and Business Banking (RBB), which generates most of the Group’s income, grew headline earnings eight-fold to R4.2 billion.
It said the benefit of a lower impairment charge was partially eroded by a 15 per cent decline in pre-provision profit, given high claims and reserving in the life insurance business and customer-centric fee reductions.
It said Corporate and Investment Banking (CIB)’s headline earnings more than doubled to R4 billion, driven by solid growth across the franchise, most notably in the Global Markets business and the Investment Bank, helping to offset low credit appetite from corporate clients.
“These results are testimony to the decisions that we took during the crisis around supporting our customers and taking a cautious approach to preserving capital and liquidity,” Jason Quinn, Absa Interim Group Chief Executive, stated.
On the outlook of the bank, the statement said “Absa foresees a number of risks to the Group’s growth forecasts in the remainder of the year and recognised that the impact of COVID-19 remains a significant uncertainty.
BY JONATHAN DONKOR