Absa Group reports improving revenue growth momentum for 2019

Absa Group Limited, Absa Bank’s parent company, has recorded improved revenue growth for the 2019 financial year, with headline earnings growing slightly.

Mr Daniel Mminele, Absa Group Chief Executive Officer, said: “We delivered a resilient performance against a challenging macroeconomic backdrop. We maintained balance sheet momentum and growth was broad-based across most businesses.”

He said this at a meeting organised by the bank in South Africa to present its financial results for 2019. The meeting was broadcast live via an audio link to Ghana stakeholders including the media.

Speaking about the outbreak of the coronavirus, Mr Mminele said, the outlook remains muted and compounded by the outbreak which could have an impact on the global macro outlook, and the economic prospects in their operating regions.

“We will continue to drive the execution of our strategic objectives with agility and take advantage of emerging opportunities while managing risks more effectively in response to changes in the operating environment,” he said.

Mr Jason Quinn, the Absa Group Financial Director, said the Group’s revenue increased by six per cent while the headline earnings, the measure most analysts used to gauge profit, rose by one per cent as impairments increased.

“Our revenue growth is showing an improving trend, with strong deposit growth of 12 per cent and customer loan growth of nine per cent for the Group.”

Overall, Absa’s balance sheet, revenue and earnings growth were in line with peers after lagging for a number of years, he said.

The Absa Regional Operations business, comprising Absa Group’s African operations with the exception of South Africa, delivered a strong financial performance in 2019 with earnings growth of 16 per cent (12 per cent in constant currency), and enhanced the overall Group’s position, Mr Quinn said.

Mr Peter Matlare, the Chief Executive of Absa Regional Operations, also said: “We are pleased with the results of our Absa Regional Operations and their contribution to the Group’s overall performance, having maintained double-digit growth and growing our headline earnings. We look forward to continuing to grow our revenue market share on the continent over the coming years.

“We are optimistic about the future and the opportunities that lie ahead, united under ‘one Absa’ across our African markets. Our objective is to develop strong, digital-first financial systems in a sustainable manner and to contribute positively to the development of our communities in which we operate.”

The publication of Absa Group’s results followed the completion of Absa Bank Ghana brand transition.

The bank, he said, has begun a new journey where it would strive to be customer-obsessed, acknowledge the strength of its people and deliver results sustainably.

Mr Matlare said revenue momentum increased and costs were well contained, however, an increase in impairments impacted on earnings.

They included loans and advances growing by seven per cent to R530bn, deposits growing by 10 per cent to R373bn, non-interest income growing by six per cent, and Cost-to-income ratio improving to 57.7 per cent from 58.4 per cent in 2018.

Others were customer growth of one per cent to 9.7m and market share growth in retail deposits and retail loans and advances, including personal loans, new home loans and vehicle finance.