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FY19 results and preference share dividend declaration
Absa Bank Limited
Registration number: 1986/004794/06
Incorporated in the Republic of South Africa
JSE share code: ABSP
ISIN: ZAE000079810
Bond Issuer Code: BIABS
(“Absa Bank” or the “Company”)
Audited summary consolidated financial results for the reporting period ended 31 December 2019 and preference share
dividend declaration
We are an African bank, inspired by the people we serve and determined to be a bank that is globally respected and that
Africa can be proud of. We are committed to finding local solutions to uniquely local challenges and everything we do
focuses on adding value.
2020 priorities
To accelerate our business momentum and transform our strategic trajectory, we have selected seven key priorities for the
year ahead with regard to the unfolding macro-economic environment:
1. Grow customer and client primacy ahead of the market across our business portfolio.
2. Advance the digital maturity of our business to be competitive.
3. Create new revenue streams by building a market leading payments capability.
4. Complete the Separation successfully.
5. Accelerate our journey of becoming a thriving, entrepreneurial organisation supported by an enabling organisational
architecture.
6. Leverage strategic partnerships.
7. Drive operational efficiencies.
Normalised financial results as a consequence of Barclays PLC separation
A normalised view of the 2019 final results is provided which adjusts for the consequences of the separation
from Barclays PLC (Separation). This view better reflects Absa Bank’s underlying performance. International Financial
Reporting Standards (IFRS) compliant financial statements will continue to be presented as required by the Companies Act
and the JSE Limited (JSE) Listings Requirements and include a reconciliation between the normalised and IFRS views.
Normalised results will be presented for future periods to the extent that the financial impact of the Separation is
considered material.
Non-IFRS measures such as normalised results are considered pro forma financial information as per JSE Listings
Requirements. The pro forma financial information, is the responsibility of the Bank’s board of directors and is presented
for illustrative purpose only and because of its nature may not fairly present the Bank’s financial position, changes in
equity, and results in operations or cash flows. The pro forma financial information contained in this announcement has
been reviewed by Absa Bank’s external auditors and their unmodified limited assurance report prepared in terms of ISAE
3420 is available for inspection at the Company’s registered office on weekdays from 09:00 to 16:00.
Performance overview for the period ended 31 December
Total income
2019 Increase 2% 2018 2019 Increase 3% 2018
R52 757m IFRS R51 843m R52 594m Normalised R50 987m
Headline earnings per ordinary share
2019 Decrease 7% 2018 2019 Decrease 10% 2018
1 632.6 cents IFRS 1 751.7 cents 1 927.3 cents Normalised 2 146.6 cents
Basic earnings per share
2019 Decrease 5% 2018 2019 Decrease 9% 2018
1 583.3 cents IFRS 1 668.7 cents 1 877.8 cents Normalised 2 063.6 cents
Net asset value per ordinary share
2019 Increase 6% 2018 2019 Increase 9% 2018
18 000 cents IFRS 17 022 cents 16 407 cents Normalised 15 013 cents
Return on equity
2019 Decrease 2018 2019 Decrease 2018
9.3% IFRS 10.4% 12.2% Normalised 14.7%
Cost-to-income ratio
2019 Increase 2018 2019 Increase 2018
66.6% IFRS 66.2% 63.4% Normalised 61.8%
Net interest margin
2019 Decrease 2018 2019 Decrease 2018
3.53% IFRS 3.65% 3.46% Normalised 3.63%
Dividend per preference share
2019 2018
7 065.21 cents IFRS 7 061.36 cents
Strong loans and deposits growth
Loans and advances to customers
R794bn (2018: R735bn)
Deposits due to customers
R678bn (2018: R606bn)
Well managed risk profile
Stage 3 loans ratio to gross loans and advances
4.47% (2018: 4.81%)
Credit loss ratio
1.45% (2018: 0.68%)
Sound capital
Common Equity Tier 1 ratio
11.9% (2018: 12.3%)
Short form statement
This short-form announcement is the responsibility of the directors of Absa Bank Limited. It is only a summary of the
information in the full announcement.
Any investment decisions by stakeholders should be based on consideration of the full announcement published on
https://www.absa.africa/absaafrica/investor-relations/financial-results/ and on the following JSE link:
https://senspdf.jse.co.za/documents/2020/jse/isse/ABSAB/Final19.pdf
This announcement has not been audited. The annual financial statements were audited by Ernst & Young Inc., who
expressed an unmodified opinion thereon. The full audit opinion, including any key audit matters, will be available at
https://www.absa.africa/absaafrica/investor-relations/financial-results/ when Absa Bank's full annual financial statements
are released on or about 31 March 2020. The annual financial statements and auditors’ report thereon are available for
inspection at the Company’s registered office.
Registered office
7th Floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001
Board of directors
Independent directors
C Beggs, A B Darko, M J Husain (Lead Independent Director), W E Lucas-Bull (Independent Chairman), M S Merson
Executive directors
D Mminele (Group Chief Executive), J P Quinn (Financial Director)
Declaration of preference share dividend number 28
Absa Bank non-cumulative, non-redeemable preference shares (Absa Bank preference shares)
The Absa Bank preference shares have an effective coupon rate of 70% of Absa Bank’s prevailing prime overdraft lending
rate (prime rate). Absa Bank’s current prime rate is 9.75%.
Notice is hereby given that preference dividend number 28, equal to 70% of the average prime rate for 1 September 2019
to 29 February 2020 per Absa Bank preference share has been declared for the period 1 September 2019 to 29 February
2020. The dividend is payable on Monday, 20 April 2020, to shareholders of the Absa Bank preference shares recorded in
the Register of Members of the Company at the close of business on Friday, 17 April 2020.
The directors of Absa Bank confirm that the Bank will satisfy the solvency and liquidity test immediately after completion
of the dividend distribution.
Based on the average prime rate, the preference dividend payable for the period 1 September 2019 to 28 February 2020
will be 3 469.31507 cents per Absa Bank preference share.
The dividend will be subject to dividends withholding tax at a rate of 20%. In accordance with paragraphs 11.17(a)(i) to (ix)
and 11.17(c) of the JSE Listings Requirements, the following additional information is disclosed:
- The dividend has been declared out of income reserves.
- The local dividend tax rate is twenty per cent (20%).
- The gross local dividend amount is 3 469.31507 cents per preference share for shareholders exempt from the dividend
tax.
- The net local dividend for shareholders subject to withholding tax at a rate of 20% amounts to 2 775.45206 cents per
preference share.
- Absa Bank currently has 4 944 839 preference shares in issue.
- Absa Bank’s income tax reference number is 9575117719.
In compliance with the requirements of Strate, the electronic settlement and custody system used by JSE, the following
salient dates for the payment of the dividend are applicable:
Last day to trade cum dividend Tuesday, 14 April 2020
Shares commence trading ex-dividend Wednesday, 15 April 2020
Record date Friday, 17 April 2020
Payment date Monday, 20 April 2020
Share certificates may not be dematerialised or rematerialised between Wednesday, 15 April 2020 and
Friday, 17 April 2020, both dates inclusive. On Monday, 20 April 2020, the dividend will be electronically transferred to the
bank accounts of shareholders.
On behalf of the Board
N R Drutman
Company Secretary
Johannesburg
11 March 2020
Absa Bank Limited is a company domiciled in South Africa. Its registered office is 7th Floor, Absa Towers West, 15 Troye
Street, Johannesburg, 2001.
Sponsors
Lead independent sponsor
J. P. Morgan Equities South Africa Proprietary Limited
Joint sponsor
Absa Bank Limited (Corporate and Investment Bank)
Date: 11-03-2020 07:58:00
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