Absa interim revenue grows 8%

Absa, a JSE-listed financial group, has reported a marginal increase in their headline earnings by 1%, with an 8% growth in revenue for the full year ending on December 31, 2023. The challenging operating environment, marked by electricity supply disruptions, supply chain issues, and inflation, has impacted the company's performance. In a recent interview with CNBC Africa, Absa CEO, Arrie Rautenbach, discussed the tough macroeconomic conditions the company faced not only in South Africa but also in the markets where they operate regionally and globally. Rautenbach highlighted the importance of diversification in Absa's business strategy following the separation from Barclays. The company has successfully transitioned from being primarily focused on South Africa to a more pan-African business model. Currently, non-South African entities contribute close to 30% to Absa's overall performance. Rautenbach emphasized the significance of this diversification in ensuring the sustainability and growth of the company. With a focus on growing outside South Africa, Absa aims to increase the contribution of businesses in the region over the next three to five years. The company is actively seeking opportunities for expansion and consolidation in markets where they currently operate. Rautenbach highlighted the recent acquisition of HSBC's wealth and retail business in Mauritius as an example of their strategic growth initiatives. Regarding the South African market, Absa observed a 13% increase in impairments, attributed in part to rising debt costs and stagnant income growth for consumers. Rautenbach acknowledged the challenges faced by South African consumers in adapting to higher interest rates and the overall cost of living. Despite these difficulties, Absa is committed to working closely with customers to help them navigate the tough economic climate. When asked about Nigeria, Rautenbach mentioned that while Absa does not have a significant presence in the country, they support clients conducting business there. He expressed confidence in the structural reforms initiated by President Buhari, particularly in monetary policy, stating that these reforms are essential for normalizing the market in the long run. In conclusion, Absa remains focused on its pan-African growth strategy, seeking to enhance its footprint outside South Africa and capitalize on higher growth rates in the region. The company's ability to navigate challenging economic conditions and adapt its business model reflects its resilience and commitment to long-term sustainability.