Big-four bank Absa has increased its investment in IT, with spend increasing by 6% to R16.7 billion.
This emerged today when the financial services provider announced its financial performance for the full year ended 31 December, achieving a 12% increase in headline earnings.
In a statement, Absa notes the increase in IT-related spend reflects investment in new digital infrastructure capabilities, cyber security, data and cloud, which was in part offset by continued optimisation of infrastructure costs.
According to the company, during the reporting period, digitally-active customers increased to 5.4 million, driven by the migration to digital channels, particularly by adoption of the banking app.
Absa Group’s customer base increased to 13.1 million, mainly driven by Africa regions from targeted customer engagement initiatives and new-to-bank acquisition programmes, it adds.
Revenue grew by 5% for the full year, supported by non-interest income momentum, particularly robust trading revenue and a moderate net interest income growth, despite modest retail loan growth and margin compression, says the bank.
From a geographic perspective, it notes that Africa regions delivered noticeably stronger earnings growth than South Africa, driven by solid pre-provision profit growth and continued customer expansion, while South Africa benefited from a meaningful improvement in credit impairments across several portfolios.
“Our performance over the past year reflects clear progress on delivering on our strategic priorities, supported by disciplined execution across the group,” says Kenny Fihla, group chief executive officer.
“We are seeing the benefits of our operating model changes, sharper client focus and continued improvements in credit outcomes. Growth across several of our businesses, particularly in corporate and investment banking and our Africa regions operations, highlights the strength of our diversified franchise and our ability to deliver under evolving market conditions.”
“Our financial performance reflects disciplined execution in a year marked by improved credit trends, strong non-interest income growth and continued cost containment,” says Deon Raju, group financial director.
“We are encouraged by the improvement in our credit loss ratio supported by better outcomes across key portfolios, as well as momentum in trading revenue and customer activity. This foundation enables us to continue investing in strategic priorities, while maintaining balance sheet strength and a resilient capital position.”
As part of the group’s productivity programme, Absa says it has achieved cumulatively R3.1 billion savings since its launch in 2024.
It explains that these savings were achieved through optimisation of back office and channel, third-party suppliers and software licensing.
“As we look ahead, we remain focused on enhancing operational efficiencies, driving sustainable revenue growth and delivering improved returns for our shareholders,” adds Raju.
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