This article first appeared on GuruFocus .
Absa Group ( AGRPY ) reported record earnings as the lender benefited from stronger momentum outside its home market of South Africa. Headline earnings rose 12% to 24.8 billion rand ($1.5 billion), according to a filing Tuesday, as the Johannesburg-based bank continued to expand its regional footprint across the continent. The company also declared a final dividend of 8.50 rand per share, bringing the total payout for the year to 16.35 rand, which the bank said represents its highest annual distribution on record.
Growth across Absa's rest-of-Africa operations appeared to be a key contributor to the results. Profit in the division advanced 51% to 2.52 billion rand and now accounts for about 10% of overall headline earnings. The expansion across the region helped offset more moderate performance in other parts of the business, including personal and private banking, while earnings from the business-banking unit declined. Net interest income increased 4% on modest retail-loan growth in South Africa, while non-interest revenue climbed 7.5% as trading activity continued to strengthen.
The lender has been stepping up its push across the continent as it looks to broaden its presence beyond South Africa. In 2024, Absa acquired HSBC Holdings' wealth and personal, as well as business-banking operations in Mauritius, and it later agreed to buy Standard Chartered's wealth and retail-banking unit in Uganda. The bank also plans to combine its two banking operations in Tanzania. Absa said prolonged geopolitical tensions, particularly in the Middle East, could weaken the rand, raise inflation and reduce the scope for monetary easing, though it still expects mid-single-digit revenue growth in 2026 and aims to increase return on equity to 16% by 2026 and potentially as high as 19% by 2030.
