Absa Group delivers growth earnings for half year
Kenny Fihla, Absa Group Chief Executive Officer
Absa Group delivered strong earnings growth for the first half of 2025, reflecting the successful execution of its strategic priorities. Headline earnings increased 17% as credit impairments declined and pre-provision profit grew.
“Our interim earnings performance demonstrates good progress on strategic priorities during this period, including operational reorganisation and divisional alignment, and enhanced client focus. Headline earnings increased 17% and our return on equity continues to improve, showing the benefit of our diversified footprint with operations in 16 countries,” said Kenny Fihla, who joined Absa Group as Chief Executive Officer on 17 June 2025.
A 14% decrease in impairments played a significant role in delivering earnings growth and included a robust collections strategy, credit model enhancements, and changes to new-business lending criteria, particularly in vehicle asset finance and unsecured lending. The credit-loss-ratio reduced in line with guidance and is at the top end of Absa’s through-the-cycle target range at 100 bps.
“Among the key contributors to our strong performance are a notable improvement in our credit-loss-ratio, strong growth in non-interest income particularly trading, and cost management supported by our productivity programme,” said Deon Raju, Absa Group Financial Director.
To date, Absa has achieved R2.4 billion of the R5 billion savings it had committed to achieving by 2027 under a productivity programme launched in 2024.
“While we continue to operate in a highly competitive environment, we remain focused on identifying opportunities to grow our balance sheet, our customer base and maintain our competitive positioning across our markets,” added Raju.
Business unit performance
Absa Group business units’ performance in the first half of 2025 reflects the benefits of disciplined execution, with most business units reporting strong earnings growth.
Business unit headline earnings performance
| Business unit | June 2025 headline earnings | Change year-on-year |
| Personal and Private Banking | R3.2 billion | Increased 23% |
| Business Banking | R1.7 billion | Decreased 12% |
| Corporate & Investment Banking | R6.4 billion | Increased 10% |
| Absa Regional Operations Retail and Business Banking | R1.1 billion | Increased 35% |
Outlook
Given the weak start to the year and the negative impact of the US trade tariffs, we expect the South African economy to grow just 0.9% in 2025. Our baseline forecast for our Africa region countries is that GDP will rise slightly to 4.8% in 2025. Although heightened global uncertainties have increased downside risks for all our markets, lower inflation and policy rates, ongoing infrastructure investment, favourable weather conditions, multilateral support and a strong focus on reform across the region continue to support the longer-term outlook.
For the full year, Absa’s guidance for 2025 is largely unchanged and expects mid-single digit revenue growth. Return on equity of around 15% is expected. We expect a weaker rand to underpin earnings slightly in 2025, and Africa regions earnings growth should be noticeably stronger than South Africa.
