Absa Group, a company with a presence in 12 African countries saw its profit increase by 3 percent in the first half of 2019, despite a faltering South African economy. The South African banking sector in general is facing problems due to the nation’s economic crisis.
“Despite the tough operating environment, we have been able to maintain revenue momentum in our key target areas, with total revenue growth improving to 6 percent,” Jason Quibb, Absa Group’s financial director told the local media.
The company has stated that its retail unit in South Africa gained market share which led to an increase in its earnings. The South African retail business which was lagging behind earlier, grew its earnings by 4 percent in the first half of 2019, in spite of a 20 percent spike in impairments and higher costs.
The group confirmed that its earnings increased from R8.04 billion in the first half of 2018 to R8.3 billion in 2019 over the same time period.
The bank recently finalised its CEO after the resignation of ex- CEO Maria Ramos in February.
Absa, which was a market leader earlier, faced financial instability following its split from former parent Barclays in 2017.
Absa Group reported that its retail deposits grew 12 percent while the retail market increased 9 percent. There was also a 20 percent increase reported in new personal loans.
A higher non-interest income and growth in everyday banking and car finance also influenced its performance.
In contrast, its earnings from corporate and investment banking fell by 10 percent.
Absa Regional Operations (ARO), which holds Absa’s subsidiaries outside South Africa, showed an 8 percent increase in its earnings during the first half of 2019. Increase in ARO’s earnings contributed to a fifth of Absa Group’s total earnings.