Absa's headline earnings grow five fold

South African banking giant Absa Group has reported a remarkable surge in full-year headline earnings, with growth exceeding fivefold, enabling the bank to resume paying dividends to its shareholders. The positive financial results come amidst an upgraded South Africa growth forecast, now projected at 4% as opposed to the previously estimated 3% in March. Jason Quinn, Absa's Interim Group CEO, sat down with CNBC Africa to delve into the details of the bank's impressive performance and outlook. Quinn expressed confidence in Absa's position in the current macroeconomic environment, attributing the bank's success to prudent provisioning and better-than-expected loan delinquencies. Although uncertainties remain, particularly due to the ongoing effects of COVID-19 and potential future challenges like load shedding, Absa remains cautiously optimistic about its growth prospects. The bank has identified growth opportunities in various sectors, with mortgages, vehicle, and asset finance showing strong performance. Absa's focus on securing lending and deposit growth has paid off, with deposits surpassing a trillion rand for the first time. The bank has also seen a significant rise in personal savings, fueled by monetary policy easing and payment relief programs. Quinn highlighted Absa's strategic shift towards sustainable finance, with a focus on renewable energy projects and the creation of a leading black-owned renewable energy fund in partnership with African Rainbow Energy and Power. Beyond South Africa, Absa's operations in the rest of Africa have shown promise, with plans for further expansion and growth. Quinn acknowledged the challenges faced in the market's separation from previous entities but emphasized the bank's ongoing efforts to regain lost market share through strategic investments and digital innovations. Looking ahead, Absa remains committed to supporting South Africa's economic recovery, particularly through investments in ESG projects and infrastructure development. Quinn emphasized the importance of business and consumer confidence post-social unrest and load shedding, underlining Absa's readiness to provide financial support for new opportunities that arise. As for the search for a permanent CEO, Quinn deferred to the board for updates on the process. Absa's strong financial performance and strategic initiatives position the bank as a key player in driving South Africa's economic growth and sustainability agenda.