Full Year 2023 Absa Group Ltd Earnings Call Transcript
Key Points
- Absa Group Ltd (JSE:ABG) achieved 8% revenue growth, driven by a 12% increase in net interest income.
- The company saw a significant increase in digital transactions, with transactions on the Absa app increasing by over 200% since 2018.
- Customer acquisition improved, with new-to-bank retail transactional accounts increasing by 21% in 2023.
- The CIB business showed strong momentum, with earnings growing 23% and pre-provision profit increasing by 13%.
- Absa Group Ltd (JSE:ABG) maintained a strong capital position, with a CET1 ratio of 12.5%, at the top end of the Board target range.
- Earnings growth was muted at 1%, below the company's expectations due to a deteriorating operating environment.
- The credit loss ratio increased to 118 basis points from 96 basis points, driven by increased consumer strain in the SA Retail Portfolios.
- Operating expenses increased by 10%, largely due to investments in the sustainability of the franchise.
- The return on equity (ROE) decreased to 15.3% from 16.4% in 2022, reflecting low earnings growth.
- The South African economy faced significant challenges, including record levels of load shedding and logistics infrastructure constraints, impacting business confidence.
Good morning and thank you for joining us for Absa's 2023 results presentation. Before getting into the results, I would like to begin by thanking our over 37,000 colleagues who have served our 12.2 million customers with distinction in a difficult operating environment. I would also like to thank our external stakeholders for the ongoing loyalty and support of our business.
Turning to our results, I will first share my thoughts on the current operating environment before giving an update on how our organization has fared strategically. I will spend time on our financial performance before handing to Chris to go through our performance in detail and provide our guidance for 2024. Thereafter, we will provide an update to our medium-term guidance and take your questions.
The global, sub-Saharan and South African economies entered the year on increased uncertainty. At the beginning of the year, very high inflation prompted central banks to continue raising interest rates, though fears of an economic slowdown were
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