Say goodbye to Absa as you know it

Absa has made several changes to its strategy in an effort to revamp the business and ensure its competitiveness in South Africa’s increasingly competitive banking landscape.

This has included a reorganisation of the group’s structure, a more focused approach to its African operations, and cutting red tape across the business.

On Tuesday, 10 March, Absa released its results for the year through December 2025, or its 2025 financial year.

These results revealed a 5% increase in income to R115.7 billion, and an 8% increase in the bank’s net asset value to R172.41 billion.

Absa reported basic earnings per share growth of 3% to 2,679.6 cents, and headline earnings per share growth of 12% to 2,987 cents.

The group had a capital adequacy ratio of 15.8%, the same as in its 2024 financial year, while its credit loss ratio fell slightly to 0.88%, down from 1.03 in 2024.

Absa also recorded a return on equity of 15%, which is below its medium-term target of 16% to 19%, though it marks a slight increase from 14.8% the year prior.

From a segmental perspective, Absa’s Corporate and Investment Banking (CIB) unit and its Africa Regions business delivered standout performances.

The CIB segment delivered headline earnings growth of 14% and was the biggest contributor to the bank’s total earnings. Africa Regions, the smallest contributor, recorded growth of 51%.

Absa’s Personal and Private Banking segment saw more modest, though still strong, headline earnings growth of 7%.

One laggard among the segments was Absa’s Business Banking unit, which saw its headline earnings decrease by 8% over the year.

Absa’s new CEO, Kenny Fihla, described these results as “solid”, saying they are fully aligned with the guidance provided in December 2025.

He said the bank was disciplined in delivering results against its four strategic pillars – customer-led growth, diversified Pan-African business, driving excellence, and new growth opportunities.

However, he added that the group has made some changes over the past year to better align its outcomes with these pillars.

The ‘new’ Absa

Firstly, Fihla explained that Absa made a deliberate shift to organise the group around customers’ needs, not the bank’s internal structures. 

“Because in a world where banking products are increasingly similar, it is the client experience we deliver that truly sets us apart,” he said. 

Fihla added that this focus is already making a difference in Absa’s Africa regions. The banking giant currently operates across 11 markets outside of South Africa.

The CEO said Absa’s Africa regions business demonstrated its strategic importance in the latest results, growing headline earnings by 25% and now contributing 31% of the group’s total earnings.

Therefore, to strengthen its second strategic pillar, the bank plans to double down on its African business, having identified substantial opportunities across the continent.

To make the most of these opportunities, Fihla said Absa is strengthening its leadership to provide deeper integration “as we look to unlock these as well as greater synergies and create economies of scale across our businesses and markets”. 

Thirdly, Fihla said Absa will continue to drive operational excellence through simplifying how we work, cutting excessive bureaucracy, speeding up decision-making, and reinforcing clear accountability.

This, he said, would restore speed, focus, and execution discipline to the bank’s operations. 

He used the bank’s cost-to-income ratio as an example of this, saying the current ratio is not yet where the bank wants it to be. However, he added that Absa is making progress through its productivity initiative.

“Alongside this, we are pursuing new growth opportunities, including investing in future growth through partnerships and targeted acquisitions,” he said.

Fihla used Absa’s recent acquisition of Standard Chartered Wealth and the business’s retail banking portfolio in Uganda as an example of this.

On the back of these results, Absa declared a dividend of 1,635 cents per share, an increase of 12% from 2024.