Absa Group Limited, one of Africa’s largest financial services providers, reported an increase in revenue and earnings for 2018, a year of almost unprecedented corporate activity as the group repositioned itself for delivery against a new growth strategy as an independent African bank.
Normalised headline earnings increased 3% to R16.1 billion compared with 2017 and revenue increased 4% to R75.7 billion. Shareholders will receive a final dividend of R11.10 per share, a 4% increase from the final 2017 dividend.
Normalised earnings are considered the best measure of underlying group performance as it strips out the distorting effect of items related to the separation from Barclays Plc.
“Despite a challenging backdrop, we are particularly pleased with our improved momentum as we embark on our new growth strategy. This was evident in our gross loans to customers which increased by 13%,” said Jason Quinn, Absa Group Financial Director.
In our largest business, retail in South Africa, lending momentum outpaced the market showing good new business growth across home loans, vehicle and asset finance and personal loans. Absa also gained market share in deposits which grew by 11% with strong growth in fixed and notice deposits.
“Last year was a year of almost unprecedented activity for Absa Group as the business was re-set as an independent bank after Barclays Plc reduced its shareholding to a minority stake in 2017,” said René van Wyk, Absa Group CEO said.
Absa Group announced a new strategy in March as it repositioned itself as an independent African banking group focused on growth.
In April, a new operating model was implemented to structure the business for delivery against the new strategy.
In June, Absa Group achieved regulatory deconsolidation from Barclays PLC, which meant that regulators no longer regarded the two businesses as a consolidated entity.
In July, the group started trading as Absa Group and launched refreshed brand in South Africa.
Absa opened an office in London in September, strengthening its ability to serve European and global corporates.
In 2018, the group also stepped up its digital customer offerings.
“With major changes bedded down in 2018, the framework for the business has been re-set,” said Van Wyk. “The strong leadership team and structure that was put in place over the past year can now deepen the efforts within their business units to deliver against our ambitious growth strategy.”
Commenting on the Group results, Absa Regional Operations Chief Executive, Peter Matlare said; “We are pleased with the contribution of our African operations to Absa Group’s overall performance and we remain focused on contributing to the Group’s ambition of growing revenue market share on the continent over the coming years.” He added: “As Absa Group, we are optimistic about the outlook for the continent and we stand ready to partner with stakeholders across the continent to develop strong, digitally led financial systems while supporting the growth of economies for the long term.”
Barclays Uganda Managing Director, Rakesh Jha (in featured photo) said; “As we join in reflecting on our parent company’s full year 2018 results, we are excited about our own future and the progress on our journey to the new Absa brand in Uganda. Our transition to a new brand in the near future presents us with a very unique and exciting opportunity to leverage our rich African heritage. Absa’s rich African heritage provides a deep understanding of the local market and will help drive the relevant initiatives to help unlock Uganda’s potential and support its future growth.”