Slide 1: Absa Group FY24 financial results
Absa Group FY24 financial results 11 March 2025
Slide 2: Charles Russon, Interim Group Chief Executive
Charles Russon Interim Group Chief Executive
Slide 3: Difficult macro backdrop that remains highly uncertain
Difficult macro backdrop that remains highly uncertain Global environment Sub-Saharan Africa South Africa • Global uncertainty rose sharply • Social tension in some markets • Two significant events: GNU with new US administration • Disinflation, policy rate cutting formed, reduced loadshedding • Inf
Slide 4: FY24 saw some progress
FY24 saw some progress Key performance metrics FY23 FY24 Change (%) Diluted HEPS (c) 2 415 2 658 10 Ordinary DPS (c) 1 370 1 460 7 RoE (%) 14.4 14.8 Net interest margin (bps) 468 463 Cost-to-income ratio (%) 53.2 53.2 Credit loss ratio (bps) 118 103 NAV per share (R) 174.40 193.10 11 CET1 ratio (%)
Slide 5: We are in a recovery phase
We are in a recovery phase Diluted HEPS (R) RoE (%) 27% 2% 14.30 (5%) 15.7 15.5 12.89 (1%) 12.28 14.0 11.26 13.2 1H23 2H23 1H24 2H24 1H23 2H23 1H24 2H24 5
Slide 6: Making progress on strategic execution priorities
Making progress on strategic execution priorities • From focus on market share growth to sustainable growth delivering the right returns • From a product focus to both product and client/customer franchise profitability o Creating a Retail SA franchise o Adopting a franchise approach to wholesale cl
Slide 7: Franchise health improving
Franchise health improving Customer Technology and digital Sustainability • Purpose aligned brand – • Stable technology • R49bn in sustainability-linked “Your story matters” • 99.98% availability financing in 2024 • Customer experience • Over 1000 days with no o Achieved 2025 R100bn improved by 5 po
Slide 8: All businesses grew earnings
All businesses grew earnings Headline earnings (Rbn) 6% 11.7 11.0 FY23 FY24 4% 18% 38% 4.1 4.3 4.0 12% 3.4 3.3 2.4 1.6 1.8 24% (2.4) (3.0) CIB Relationship Everyday Product ARO RBB Head Office, Banking Banking Solutions Treasury, other Pre-provision profit growth: 14% 4% 1% 1% 15% - RoRC: 22.5% 24.9
Slide 9: CIB momentum and diversification benefits continued
CIB momentum and diversification benefits continued Headline earnings (Rm) 6% FY23 FY24 11 740 11 025 11% 10% 7 314 6 603 6 877 6 270 2% 0% 4 755 4 863 4 422 4 426 Corporate Bank Investment Bank Total CIB South Africa ARO Pre-provision profit growth: 2% 23% 14% 14% 13% 9 Note: In constant currency t
Slide 10: Relationship Banking growth has been muted
Relationship Banking growth has been muted Revenue (Rbn) Headline earnings (Rm) 6% 5% (1%) 4% 16.1 15.2 4 201 4 145 4 292 14.4 FY22 FY23 FY24 FY22 FY23 FY24 10
Slide 11: Card and Personal Loans drove EB earnings growth
Card and Personal Loans drove EB earnings growth Headline earnings (Rm) FY23 FY24 18% (6%) 4 004 3 542 3 394 3 319 107% 297% 733 317 354 (161) 7% (341) (365) Card Personal Loans Transactions and Other Everyday Banking Deposits Pre-provision profit growth: 14% (6%) (7%) 1% 11
Slide 12: Lending businesses underpinned PSC earnings rebound
Lending businesses underpinned PSC earnings rebound Headline earnings (Rm) FY23 FY24 38% 3 276 31% 2 368 1 741 10% 1 329 215% 1 194 1 312 234 738 32% (389) (515) Home Loans Vehicle and Asset Insurance SA Other Product Solutions Finance Cluster Pre-provision profit growth: 0% 3% 8% 1% 12
Slide 13: Solid ARO RBB earnings growth despite currency drag
Solid ARO RBB earnings growth despite currency drag Headline earnings (Rm) Headline earnings growth (%) 12% Reported 18% 1 780 Constant currency 35 1 584 1 348 25 18 12 FY22 FY23 FY24 FY23 FY24 13
Slide 14: Scope to improve divisional returns
Scope to improve divisional returns Return on regulatory capital (%) 27.8 FY23 FY24 25.9 24.7 24.9 23.9 22.5 14.0 11.7 12.4 10.4 Everyday Banking Relationship Banking CIB Product Solutions Cluster ARO RBB 14
Slide 15: Deon Raju, Group Financial Director
Deon Raju Group Financial Director
Slide 16: Pre-provision profit and lower CLR drove earnings growth
Pre-provision profit and lower CLR drove earnings growth Headline earnings (Rbn) Pre-provision profit up 5% 6% 5% (8%) 13% 4% 2.3 1.2 (1.8) (2.8) 10% 3.1 22.1 20.1 Revenue up 5% FY23 Net interest Non-interest Operating Credit Other* FY24 income income expenses impairments 16 Note: * Includes other e
Slide 17: Performance improved significantly in 2H24
Performance improved significantly in 2H24 1H24 2H24 Income statement (Rbn) YoY change (%) YoY change (%) Net interest income 35.3 7 35.8 2 Non-interest income 18.4 (2) 20.4 15 Total income 53.7 3 56.2 7 Impairments 8.3 0 6.0 (17) Operating costs 28.3 8 30.2 2 Pre-provision profit 25.4 (1) 26.1 12 H
Slide 18: Modest retail SA net interest income growth
Modest retail SA net interest income growth Divisional net interest income (Rbn) FY23 FY24 8% 21.2 3% 19.5 15.9 16.4 7% 9% 3% 12.6 11.0 11.8 10.1 9.0 9.3 Product Solutions Everyday Banking Relationship Banking ARO RBB CIB Cluster 18
Slide 19: Deposit margin compression reduced Group NIM
Deposit margin compression reduced Group NIM Change in net interest margin* (basis points) 10 (2) (1) (5) 468 1 (2) (9) 1 0 7 463 456 Loans Deposits (3) (10) FY22 FY23 Pricing Mix Pricing Mix Endowment Capital ** Hedge *** Other FY24 19 Note: * average interest bearing assets; ** group equity endowm
Slide 20: Broad-based deposit growth, strong CIB and ARO RBB
Broad-based deposit growth, strong CIB and ARO RBB Customer deposits (Rbn) FY22 FY23 FY24 18% 7% 511 0% 435 8% 407 7% 4% 333 10% 309 15% 290 7% 255 231 22% 201 9% 10% 148 110 121 Everyday Banking Relationship Banking ARO RBB CIB 20
Slide 21: Loan growth slowed across most divisions
Loan growth slowed across most divisions … Net customer loans (Rbn) 8% FY22 FY23 FY24 12% 524 4% 3% 8% 484 9% 428 432 400 415 8% 6% 7% 146 155 16% 12% 7% 3% 135 13% 9% 78 91 67 72 74 72 Product Solutions Everyday Banking Relationship Banking ARO RBB CIB Cluster 21
Slide 22: SA retail loans slowing across the board
… with SA retail loans slowing across the board South Africa retail net customer loans (Rbn) 3% 3% 9% 302 310 293 FY22 FY23 FY24 6% 4% 9% 113 118 107 13% 8% 6% 44 47 50 10% 3% (4%) 20 21 20 Home Loans Vehicle and Asset Credit card Personal loans Finance 22
Slide 23: Resilient broad-based non-interest income growth
Resilient broad-based non-interest income growth Non-interest income (Rbn) Non-interest income by division (Rbn) 4% 4% 18% 25.9 12.7 25.0 12.2 12.1 FY23 FY24 FY23 FY24 10.2 10% (2%) 10% 11% 5.1 5.1 5.0 5.0 4.6 4.5 8.1 7.3 12% 12% 3.0 3.3 1.6 1.4 Net fee and Net trading Insurance Other Product Everyd
Slide 24: Cost growth reflects continued investment
Cost growth reflects continued investment FY24 Change Rm % Cost-to-income ratio (%) Staff 33 654 7 56.6 Property 1 969 3 Technology 6 848 13 53.2 53.2 Depreciation 3 124 0 52.1 Professional fees 3 127 11 Marketing 2 125 5 Communication * 1 544 (2) Cash transportation 1 242 7 Amortisation 2 729 (2) O
Slide 25: Productivity gains funded investment spend
Productivity gains funded investment spend Operating expenses growth (Rbn) Investment 5% 1.3 (1.4) 5% • Cloud 2.8 58.5 • Data 55.7 • Cyber • Front end digital Productivity programme • Process automation • Third party contract rationalisation • Channel optimisation FY23 Inflationary Investment Produc
Slide 26: Head Office costs expected to decline materially
Head Office costs expected to decline materially Group Head Office earnings (Rbn) FY22 FY23 FY24 Group Head Office outlook • Shareholder costs R1.5bn (remain) • Treasury/withholding tax R0.3bn (remain) • Separation R0.2bn (continue to decline) • Ghana hyperinflation R0.6bn (gone in 2026) (1.8) • Sta
Slide 27: Lower retail SA and RB charges outweighed higher CIB
Lower retail SA and RB charges outweighed higher CIB Credit impairment charge (Rm) 7 851 (11%) FY23 FY24 6 952 4 231 (24%) 3 216 9% 101% (8%) 1 540 1 680 1 535 822 760 764 Product Solutions Everyday Banking Relationship Banking ARO RBB CIB Cluster 27 Note: Excludes Head Office credit impairment char
Slide 28: Credit loss ratio improved materially
Credit loss ratio improved materially Group credit loss ratio (bps) Credit loss ratio (%) FY23 FY24 118 TTC range 75-100 Product Solutions Cluster 0.99 0.73 103 96 Home Loans 0.58 0.39 Vehicle and Asset Finance 2.08 1.62 Everyday Banking 8.35 7.20 Relationship Banking 0.56 0.48 ARO RBB 1.84 1.81 CIB
Slide 29: NPL growth slowed, coverage levels remain strong
NPL growth slowed, coverage levels remain strong Non-performing loans (%) NPL coverage (%) 46.1 45.0 47.4 6.05 6.14 6.12 5.82 5.29 FY22 FY23 FY24 Total loan coverage (%) 3.93 4.10 4.13 FY22 1H23 FY23 1H24 FY24 FY22 FY23 FY24 29
Slide 30: RWA growth slightly ahead of customer loan growth
RWA growth slightly ahead of customer loan growth Net customer loans (Rbn) Group risk-weighted assets (Rbn) 7% 8% 1 277 10% 1 197 5% 1 161 1 110 1 058 1 007 FY22 FY23 FY24 FY22 FY23 FY24 30
Slide 31: CET1 ratio marginally above our Board target range
CET1 ratio marginally above our Board target range Group common equity tier 1 ratio (%) 2.0 (1.1) 0.3 12.5 (1.1) 12.6 Board target range 11.0% - 12.5% FY23 RWA Profit Dividend Other FY24 31 Note: * Other consists of foreign currency translation reserve, other reserves and regulatory deductions.
Slide 32: 2025 outlook
2025 outlook Mid-single digit revenue growth with broadly similar growth in net interest income and non- Revenue interest revenue. Balance sheet Mid- to high single digit customer loan growth, low to mid-single digit customer deposit growth. Credit loss ratio expected to improve to top end of throug
Slide 33: Pathway to our 2026 RoE target
Pathway to our 2026 RoE target 2024 2025 to 2026 2026 Normalising credit impairments Productivity programme to finance RoE investment RoE 14.8% Non-interest income growth 16% Faster growth in Africa regions 33
Slide 34: Disclaimer
Disclaimer Certain statements (words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘believes’, ‘intends’, ‘plans’, ‘may’, ‘will’ and ‘should’ and similar expressions in this document are forward looking. These relate to, among other things, the plans, objectives, goals, strategies, futu
Slide 35: Appendix: Substantial income statement items
Appendix: Substantial income statement items Rm 1H23 2H23 1H24 2H24 Non-interest income impact Naira loss 0 718 401 0 Operating expenses impact Barclays separation 627 610 412 197 eKhaya BEE deal 0 241 290 366 Headline earnings impact Naira loss 0 524 293 0 Ghana hyperinflation accounting 0 403 253