The Absa Group has witnessed significant growth during the second quarter to see its headline earnings beat pre-pandemic levels.
In an interim report for the year, the financial service provider disclosed that its headline earnings per share (HEPS) for first half of 2021, reached a 4% record high as compared to the same period in 2019.
Also, the interim Chief Executive Officer of the Absa Group, Mr. Jason Quinn disclosed that the Group’s performance can be attributed to vital strategic decisions the bank took in 2018.
“The underlying trends in our performance were better than they appear on the surface, and we take great confidence from our strong balance sheet. It is evident in our numbers that most of our key strategic calls made back in 2018 were good ones”.
Mr. Jason Quinn
The Group disclosed that following closely after the economic slowdown in the first quarter of this year, due to the second wave of the prevailing coronavirus, the Absa group witnessed their earnings jump up to 474% year-on-year (YoY), from USD 102 million.
“Absa’s response to the pandemic and more recent incidents in South Africa has continued to be comprehensive, compassionate and reflective of the best of Absa’s values,”
Mr. Jason Quinn
Furthermore, the Group experienced some exponential growth as all business units recorded strong growth as compared to last year. Other units such as the Retail and Business Banking (RBB), which is in the second phase of the growth strategy introduced in 2018, also experienced headline earnings growth to about USD 285 million.
Also, the Corporate and Investment Banking (CIB) performance, which owes its success to the unit’s participation in global markets and investment banking, recorded a headline earning of about USD 271 million which represents a nineteen percent (19%) growth, as disclosed by the Group.
Additionally, this experienced growth has been attributed wholly to a sixty-eight percent (68%) reduction in impairment from Year-on-Year (YoY), the Group disclosed.
Absa Ghana’s performance
Mr. Quinn disclosed that Ghana remains one of the successful areas of operation for the Group outside South Africa, amidst its mixed results in the region.
The interim CEO also revealed that he is optimistic about the growth potential of Ghana, as the country would fare better than its tourism-dependent counterparts such as Botswana, Mauritius, and Seychelles.
Furthermore, Mr. Quinn indicated that his outfit has fully embraced the necessary steps adopted to comprehensively regulate digital currencies. The interim CEO further disclosed that these measures would allow market players to trade with confidence and give financial advice under a healthy regulatory regime.
Mr. Quinn further revealed that as part of the Groups regulations, it will continue to engage prudent measures to manage operating expenses very carefully while maintaining investments in systems and digitalization despite a surge in operational costs.
Also, shareholders are to expect a 2021 dividend payout ratio of thirty percent (30%), this will later increase to fifty percent (50%) in the medium term.
“It’s also clear that much opportunity still remains, and the management team has a strong sense of urgency around re-anchoring and refreshing our strategy against the latest market context and executing against our priorities including making further and deliberate progress on our culture journey.”
Mr. Jason Quinn
The Absa group anticipates economic fortune in the short term. Favorable economic fortunes such as strong monetary and fiscal policies, and global economic growth among others will help to a larger extent to offset the impact of the Covid-19 pandemic, hence accelerate business growth, the Group disclosed.
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