Due to the COVID-19 pandemic, the Group expects a continued difficult environment for the consumer while heightened uncertainty is anticipated to dampen business confidence and investment in the remainder of 2020
Leading financial services operator Absa Group Limited’s revenue for the six-month period ended 30 June 2020 have increased by 3 percent to R40.1 billion, the bank’s interim financial results released on Monday state.
Formerly known as Barclays Africa Group Limited, Absa Group Limited is a South African-based financial services group listed on the Johannesburg Stock Exchange (JSE). It has 12 banks in Africa including Botswana (Absa Bank Botswana). Apart from realizing a growth in revenue, Absa’s operating costs fell by 2 percent to R21.6 billion whereas the pre-provision profit went up by 9 percent to R18.5 billion. The impairments increased four-fold to R14.7 billion.
“Our revenue remained resilient and our operating costs were well managed and responded to the crisis (COVID-19 pandemic), resulting in encouraging pre-provision profit growth of 9 percent,” said Absa Group Financial Director Jason Quinn. “Our capital and liquidity levels are strong and will allow us to further support our customers as we emerge from the crisis.”
Meanwhile, according to Absa Group Chief Executive Officer (CEO) Daniel Mminele, despite significantly higher credit impairments and the material impact of the lockdowns on transactional volumes, the Group, including all business units, remained profitable. He said the Group expects a continued difficult environment for the consumer and heightened uncertainty is expected to dampen business confidence and investment in the remainder of 2020 due to the COVID-19 pandemic.
“In the current economic climate, ensuring continued operational and financial resilience is paramount. We are therefore temporarily holding our growth ambitions in abeyance to focus on cost management and capital and liquidity preservation, while continuing to support customers,” Mminele noted. Mminele also noted that Absa Regional Operations afforded customers’ payment relief on loans totaling R25 billion.
“In line with Absa’s commitment to be a force for good in the communities that we operate in, we mobilized our citizenship program as COVID-19 quickly evolved into a humanitarian crisis,” he said. “Absa and its employees contributed over R71 million in supports across the continent, contributing towards screening and testing, the provision of personal protective equipment for thousands of health workers and humanitarian support to vulnerable communities in the Southern, East and West African countries.”
Absa has banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, the Seychelles, South Africa, Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The bank also has offices in Namibia and Nigeria, as well as insurance operations in Botswana, Kenya, Mozambique, South Africa, Tanzania and Zambia..