Absa Group reports 8% rise in H1 2026 headline earnings to R12.8 billion and lifts ROE to 15%

Absa Group on Tuesday reported an 8% rise in headline earnings to R12.8 billion for the six months to June 2026, as the South African lender combined mid-single-digit revenue growth with a modest decline in credit impairments to lift return on equity to 15%. The Johannesburg-listed bank said revenue increased 4% year on year to R58.8 billion, while impairments decreased 1% to R7.1 billion.

The board declared an interim dividend of 850 cents per share, an 8% increase. Net asset value per share rose 5% to 20,968 cents.

IMPROVED RETURNS AND STEADY CREDIT

Return on equity rose to 15% from 14.8%. Management attributed the result to disciplined execution, faster growth in non-interest income and lower credit impairments, notably in Personal and Private Banking.

Impairments of R7.1 billion, down 1% year on year, reflected lower impairments in Personal and Private Banking on improved customer payment behaviour, while impairments in Business Banking and Corporate and Investment Banking normalised, taking the credit loss ratio to 94 basis points from 100 basis points.

The group's CET1 ratio was 12.8%, slightly above the board's target range of 11.0% to 12.5%.

REVENUE MOMENTUM AND CAPITAL RETURN

Revenue growth of 4% to R58.8 billion was driven by 6% growth in non-interest income, from higher fee and commission income and a solid trading contribution from Global Markets, while net interest income rose 3% as loan and deposit growth was partly offset by margin compression. The group said its performance was underpinned by the strength of its South African business, while earnings in Africa Regions were weighed down by lower interest rates, margin compression and higher costs; Corporate and Investment Banking headline earnings rose just 1%.

The group said it expects to maintain a dividend payout ratio of 55% for 2026. For 2026, Absa guided to low- to mid-single digit revenue growth and a return on equity of around 15%.

The result follows interim numbers from two of South Africa's other big-four lenders: Nedbank's flat R8.4 billion print and Standard Bank Group's 10% rise to R26.1 billion.