Arrie Rautenbach - Absa Group CEO

Absa Group reported a resilient set of results for 2023, delivered in an operating environment that was weaker than expected, particularly in South Africa where continued electricity supply disruptions, supply chain logistic issues and sticky inflation along with a higher interest rate environment weighed on growth prospects for customers and clients alike.

However, Africa regions reported very strong growth, well ahead of South Africa.

Within this context, normalised headline earnings increased by 1% as pre-provision growth of 6% reflected continued momentum in the business, offset by higher credit impairments, particularly in South Africa, Absa’s largest market by revenue. Strong revenue growth of 8% to R104.5 billion meant that the Group crossed the R100 billion revenue threshold for the first time, with stronger growth being generated within African regions. 

“Despite a challenging climate, Absa remains resilient and the underlying franchise is strong and growing,” said Arrie Rautenbach, Absa Group Chief Executive Officer.

“We are seeing the benefits of the strategic choices we made in 2018, as is evident from our diversified business, growing customer franchise and engaged workforce,” he said. 

The Group’s customer base expanded 4% to 12.2 million in 2023 from 11.7 million a year earlier and customer experience scores, which measure the quality of service experienced by customers, increased across all business units.

Absa is driving organisational health gains through a journey that commenced with a strengthened leadership team and a reorganised business model in 2022. In 2023, the Group rallied behind a co-created corporate purpose and a refreshed set of values as it drives a culture shift in order to promote sustainable outcomes.

Employee net promoter score, which indicates the likelihood of employees recommending Absa as a bank of choice, increased materially, signalling enhanced organisational health.

The Group’s broad-based black economic empowerment transaction, which placed 7% of Group shareholding (equivalent to R11.2 billion at the time) in the hands of employees and communities, is anticipated to further support this culture shift.

In addition to its investment in the B-BBEE transaction, Absa invested in other areas for future growth, recruiting additional frontline staff, acquiring new technology and refreshing its brand. These were among the costs that contributed to a 10% increase in operating expenses.

Absa expanded its employee base and at the same time invested more in new digital capabilities to enhance customer experience both in branches and online. The number of digitally active customers increased from 3.4 million to 3.8 million.

Absa also invested in updating its brand identity and positioning during 2023, culminating in the launch in February 2024 of its repositioned brand, signalling a shift to being a more deliberately customer-centric business with the new brand promise of ‘Your Story Matters’. The new brand promise commits Absa to demonstrating empathy and offering a seamless customer experience.

“We have made significant strides in the last five years in strengthening our business,” said Chris Snyman, Absa Group interim Financial Director. “We have strengthened our balance sheet, enhanced diversification and we continued to grow while focusing on efficiency," he said. The Group achieved 7% compound growth in revenues since 2018, while the cost-to-income ratio improved to 52% from 58% in 2018.

Absa’s results showed the benefit of diversification and African regions grew to 29% of total Group pre-provision profit, compared with 20% in 2018. The Group’s Corporate and Investment Banking arm now contributes a third of Group's pre-provision profit, compared with 28% in 2018.

Absa acquired HSBC Mauritius’ Wealth, Personal Banking and Business Banking businesses, pending regulatory approvals, during the year. Further afield, the Group has established an office in Beijing as it looks to be a facilitator of trade flows into Africa through a strategic presence in the North, West and East of the globe.

“This expansion is a testament to our ambition to grow in strategic markets, as we look to further diversify our operations,” said Rautenbach.

Business unit performance

Product Solutions Cluster (PSC) 

Headline earnings decreased by 24%, weighed down by higher impairments in the secured lending businesses offsetting solid growth in Insurance SA. 

Absa maintained its share of home loans at 23.8% in a subdued market, which saw application volumes decrease by 17% across the industry. 

Vehicle asset financing production increased and Absa increased its market share slightly to 24.7%

Life Insurance experienced new business volume growth of 5%, as customer journeys were further integrated and value propositions enhanced across channels. 

Non-life insurance partnered with the vehicle asset finance division, enabling growth in value-added products and digital motor products of 14% and 94%, respectively, year on year.

Everyday Banking (EB)

The business is driving customer-centricity, reflected in the business unit’s Customer Experience Index, which has improved every year since 2019. An additional R500 million in value was extended to customers through a multitude of value-added initiatives, including making Absa Rewards free. A total of R1 billion in cumulative pricing relief has been extended to Everyday Banking customers since 2020. 

The active customer base grew by 2%, with notable growth in the young adult and retail affluent segments. New-to-bank customers grew by 21%, underpinned by acquisitions across transactional products and credit cards.

The business retained its position as the least complained about financial institution of the big five banks in South Africa, according to the Banking Ombudsman. 

To promote financial inclusion, Absa was one of the first banks to implement PayShap, a ground-breaking low-cost payment system deployed in the first half of 2023.

Headline earnings declined by 17% as significantly higher credit impairments offset strong pre-provision profit growth.

Relationship Banking (RB)

Headline earnings declined marginally by 1% as investments were made in digital and frontline staff.

Key priorities included increasing the scale of the SME segment, providing tailored customer value propositions and improving ease of doing business.

Production momentum in the lending products was strong, with double-digit growth in commercial asset finance, in both the commercial and corporate customer areas. Clients’ relationships as a primary partner were deepened, reflective in the 4% growth in active customer numbers. Customer experience scores also improved significantly.

Corporate and Investment Banking (CIB) 

CIB recorded strong results driven by a Pan-African strategy, built around meeting client needs across the continent, that was implemented several years ago. Headline earnings increased by 23% as pre-provision profit grew 13% with strong growth from CIB ARO which grew faster than SA.

CIB’s performance was underpinned by the following key elements:

  • Client primacy improved following a continued focus on deepening and diversifying CIB client relationships across markets.
  • Traction has been made with digital migration of clients onto the Absa Access platform, which is the strategic client platform for clients to engage with CIB products and services across the continent and across mobile, desktop and online channels. 

Absa Regional Operations - Retail and Business Banking (ARO RBB)

(Retail, business banking and insurance products and services for individuals, small to medium enterprises and commercial customers across the region.)

Headline earnings increased by 27% to R1.5 billion on the back of strong 27% pre-provision profit growth. The delivery of key projects has supported an enhanced channel experience and connected payment platforms, while building on the strength of the Absa brand in Africa. This was evident in the active customers base, which increased by 16% to 2.4 million.

Targeted strategic investments resulted in the implementation of a number of customer-centred and innovative solutions. These include, amongst others:  

  • A digital onboarding capability, allowing for a quick and efficient, channel-agnostic onboarding solution which provides an enhanced customer experience in six of our markets.
  • Mobile in-app authentication, a major security update to digital platforms, enabled clients to bank more securely.
  • MobiTap, a first-to-market innovation launched in three markets, which allows merchants and SMMEs to use their smartphones (instead of traditional point-of-sale devices) to effect contactless card transactions.
  • Digitising our credit card offerings in eight markets enables clients to activate their cards, view their card details, freeze (or unfreeze) their cards, and view or reset their PIN on their banking application or on internet banking.

An Active Force for Good

Absa deepened work aligned to its ‘active force for good’ strategic business priority, which commits the Group to work with clients and communities in managing an orderly and just transition towards a more sustainable and equitable future.

Absa announced its long-term ambition to reach a Net Zero position by 2050 for scope 1, 2, and 3 emissions and made progress in entrenching its sustainability strategy across the Group.

The Group’s ambition to be a leader in sustainable financing in Africa was bolstered as sustainability-linked financing increased to R42.6 billion, including providing R31 billion in financing for renewable energy projects in South Africa.

To help facilitate lending for green buildings, Absa secured a loan of up to R4.5 billion from the IFC, enabling the Group to increase access to green building finance for developers and individual home buyers.

Absa also increased its investment in communities by allocating R286 million to support education and youth employability, strategic engagement initiatives as well as corporate community support, to enable inclusive sustainable economic growth in Africa.


The economic environment remains uncertain, with continued geopolitical tensions and elections in several of Absa’s operating markets this year. 

Absa expects the South African economy to grow by a muted 1.1% in 2024 given infrastructure shortfalls and the higher interest rate environment which is placing significant pressure on many consumer-facing sectors. However, Absa believes that the current policy rate is the peak for this cycle and that the South African Reserve Bank is likely to deliver a measured pace of cuts beginning in the second half of 2024. 

In our African regions, Absa expects GDP-weighted growth for ARO countries will rise to 4.8% in 2024, led by East African markets.

Based on these assumptions, and in the absence of unforeseen events, Absa expects high single-digit revenue growth in 2024, driven by both net interest income and non-interest income growth. The credit loss ratio is likely to remain above the Group’s through-the-cycle target range of 75 to 100 basis points, but improve slightly year-on-year as interest rates start to moderate. This should result in a return on equity of 15% to 16% in 2024, which the Group remains focused on improving sustainably over time to above 17%

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.