Wrap Text
ABSA GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number: 1986/003934/06
ISIN: ZAE000255915
JSE share code: ABG
JSE bond issuer code: ABGI
("Absa Group" or "the Group")
VOLUNTARY TRADING UPDATE FOR THE SIX MONTHS ENDING 30 JUNE 2026
Shareholders are advised that Absa Group will host a pre-close call today, during which
management will update the market on Absa's expected financial performance for the six
months ending 30 June 2026 (1H26).
Our operating environment remains challenging and uncertain. The Middle East conflict
increased global inflation expectations and dampened GDP growth. We have reduced our
2026 GDP growth expectations slightly for our largest countries, South Africa, Ghana and
Kenya. In South Africa, the SA Reserve Bank increased the policy rate in May, whereas we
previously expected further rate cuts. Conversely, policy rates in Ghana have reduced
materially and are lower than we expected, which is a near-term drag but should stimulate
growth.
Against this backdrop, we provide shareholders with guidance for our financial performance
in 1H26. The commentary below refers to the percent year-on-year change in our financial
results versus the first half of 2025 (1H25).
Based on our current assumptions, and excluding major unforeseen macroeconomic, political
or regulatory developments, our guidance for 1H26 is as follows:
Revenue is expected to grow by low to mid-single digits, with non-interest income growing
faster than net interest income.
Net interest income growth remains modest, growing by low single digits, reflecting margin
compression largely due to lower policy rates in Africa regions. Net customer loans and
customer deposits are expected to grow by mid-single digits. Personal and Private Banking
(PPB) net customer loans are expected to grow by mid-single digits. In PPB South Africa, solid
Vehicle and Asset Finance growth should offset modest growth in Home Loans and unsecured
lending. Corporate and Investment Banking (CIB) net customer loans excluding reverse
repurchase agreements and Business Banking (BB) net customer loans are expected to grow
by high single digits.
We expect mid-single digit growth in non-interest income. Within this, growth in fee and
commission income and in insurance income in South Africa is expected to be solid, while
trading growth moderated after a strong first quarter.
Operating expenses is expected to grow by low to mid-single digits, resulting in slightly
negative JAWS and a slightly higher cost-to-income ratio, with low single digit pre-provision
profit growth.
We expect broadly flat credit impairments and an improved credit loss ratio. We expect slightly
lower PPB credit impairments, driven by a better delinquency performance, partly offset by an
increase in coverage due to the deteriorating macroeconomic forecast. We expect BB and
CIB credit impairments to increase, with the latter off a low base.
Consequently, we expect headline earnings growth of mid- to high single digits for 1H26,
resulting in a similar RoE to the 14.8% in 1H25.
We expect our Group CET 1 ratio to finish 1H26 slightly above the top end of our Board target
range of 11.0% to 12.5%, and we plan to maintain a dividend payout ratio of around 55% for
1H26.
We will report all three of our business units on a Pan-African basis for the first time. We expect
broadly flat CIB headline earnings, with solid growth from Investment Banking and Global
Markets, and lower earnings from Transactional Banking. PPB is expected to report low
double-digit headline earnings growth, in part due to lower credit impairments. We expect
modest BB headline earnings growth, with solid growth in South Africa while Africa Regions
declines given margin compression. Lastly, we expect a smaller Head Office loss due to a
better ALM performance in Treasury South Africa.
The stronger Rand will reduce Group revenue, costs and headline earnings slightly during
1H26. We expect strong headline earnings growth in South Africa, given solid pre-provision
profit growth and a lower credit loss ratio. Conversely, we expect Africa Regions headline
earnings to decline due to lower net interest income and higher credit impairments.
Given the elevated geopolitical and macroeconomic uncertainty, we will provide detailed 2026
guidance when we report our 1H26 results. We expect to achieve a 2026 RoE of around 15%,
mostly due to weaker net interest income than we originally anticipated given margin
compression in Africa Regions. We are confident that our revenue and earnings momentum
remains on track medium-term, given healthy growth in our client franchise and net interest
margin stabilisation post the rate cutting cycle, particularly in Africa Regions.
Management will host a pre-close call at 10am (SA time) today. For details thereof, please
see our investor relations website.
Shareholders are advised that the financial information contained in this trading update has
not been reviewed or reported on by our auditors. The forecast financial information above is
the sole responsibility of the Board.
We will release our 1H26 results on 18 August 2026.
Johannesburg
30 June 2026
Enquiries:
Alan Hartdegen
E-mail: alan.hartdegen@absa.africa
Lead Independent Sponsor:
J.P. Morgan Equities South Africa Proprietary Limited
Joint Sponsor:
Absa Bank Limited (Corporate & Investment Bank)
Date: 30-06-2026 08:00:00
Supplied by www.sharenet.co.za
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
