ADDS TO GROWING CHORUS ABSA OF GROUP ALARM TOUTS OVER RESILIENT SHEDDINGBALANCE SHEET
ABSA Group has indicated that it has a well-positioned and resilient balance sheet to withstand tougher macro business environment in all its markets, including Zambia.
The group through its Chief Executive Officer, Arrie Rautenbach stated that it was conscious that the macro environment was tough and was expected to get tougher in all the markets. point from the country’s GDP
Mr Rautenbach however indicated “Economic that the growth group had is cera well-positioned tainly stunted by and this,” resilient Jason balance Quinn, Absa’s sheet group to withstand financial such director, market said conditions. in an interview,
adding Based that on the this current affects conassumptions, sumers already Absa expects hit by interest solid revenue rates. growth and credit losses at According the top end to of Absa’s its target esrange, timates, given power higher cuts rates and have inflationary shaved almost pressures. a percentage
point Absa expects from the return country’s on equity of around 17 percent.
“We are conscious that the macro environment is tough and is expected to get tougher but we have a well-positioned and resilient balance sheet to withstand it,” Mr Rautenbach said when announcing the groups’ 2022 financial year results.
Absa Group reported headline earnings of R21 billion for the 2022 financial year, an increase of 13 percent from the prior year and well above pre-Covid levels.
The result was driven by GDP. Consumers were alsignificantly higher pre-proviready struggling to adjust to sion profit which, in turn, was driven rapid by interest very strong rate rises revenue that growth have led of 15 banks percent to to increase just under their R100 prime billion. lending rate. It is expected Strong pre-provision to reach 11 percent profit growth next month. was tempered by a 61 percent “It’s not increase the actual in rate impairthat ments. worries us, it’s just that consumers This reflects need to the adapt impact their of higher monthly interest repayments rates and inflaquite tionary quickly,” pressures he said. in South Africa and significant Ghana sovereign debt related impairments.
Commenting on the results, Mr Rautenbach said the groups’ consistent strategy execution produced results in 2022 Quinn said the biggest “We believe in our strategy impact of blackouts was on and we have momentum behind small us. and Along medium with a stable enterprisand experienced es as, unlike leadership big corporations, team, I am they confident do not have that the we financial will be able and to operational sustainably wherewithal achieve our targets,” to set up he renewable said. power to maintain According production. to the results, If they headline fail, their earnings employees increased lose by 26 their percent jobs to and R3.5 are billion, unable drivto en meet by the repayments recovery in on the loans. insurance – REUTERS. business, while the lending businesses maintained balance sheet growth momentum, notwithstanding the impact of the weaker macro environment and supply chain challenges.
Rising interest rates and higher inflation, plus the non-recurrence of 2021 model enhancements benefits saw the impairment charge increase year-on-year.
Absa Group Financial Director Jason Quinn said: “We are building a strong and consistent track record of delivery against our strategy and we are well positioned for growth, notwithstanding the more difficult operating environment.”