Wrap Text
Audited summary consolidated financial results for the reporting period ended 31 December 2020
Absa Group Limited
Registration number: 1986/003934/06
Incorporated in the Republic of South Africa
JSE share code: ABG
ISIN: ZAE000255915
Bond Issuer Code: ABGI
(“Absa Group”, “the Group” or “the Company”)
Audited summary consolidated financial results for the reporting period ended 31 December 2020.
“The Group has delivered respectable progress over the last two-and-a-half years against the
strategy journey that was adopted in 2018, and we have seen good traction in some parts of the
business. We have become more precise in expressing how we want to be more customer-centric,
how we will evolve our digital maturity, what it means to be purpose-led and how we will play a
meaningful role in society.“ Daniel Mminele, Group Chief Executive.
As a financial services provider, we play an important role in the economic life of individuals, businesses and
nations.
We help to create, grow and protect wealth through partnerships in economic development, while playing a
shaping role in Africa’s growth and sustainability.
Bring your possibility to life
We believe in possibility, in the actions of people who always find a way to get things done. We believe in
creating opportunities for our customers to make their possibilities real and supporting them every step of the
way.
Our 2018 growth strategy laid the foundation to reimagine our business. 2020, however, brought with it a
materially different operating context than the one in which our original growth strategy was set. The
pandemic has fundamentally altered behavioural patterns, the way we work, collaborate, our perspectives on
health and the fragility of life. Moreover, it significantly impacted banking performance while rapidly
accelerating the evolution of the industry. Against this backdrop, we proactively engaged in a strategy review
process – while ensuring the immediate stabilisation of our business – determined to still deliver on our
aspiration to be a leader on the continent.
Sustainable growth will continue to shape our thinking and drive our planning as a critical measure
of our success.
While our aspirations are unwavering and our strategic choices remain, the world in which we seek to achieve
them has changed. A crisis is one of the most fundamental drivers for innovation, and as ‘old’ value and
opportunities diminish, we need to shift our focus and employ our creativity, tenacity and ingenuity in building
new value to drive growth – a reality that we have embraced and one that has propelled us to address the
implications of our evolving operating environment.
As such, we have adapted our strategy which required that we refine our go to market approach and execute
with agility and speed. The refreshed strategy entails a refinement of our purpose-led ethos and customer
centric business model whereby our focus is on ensuring that our propositions, distribution channels, market
footprint, capabilities, mindsets and behaviours deliver on the needs of our customers and clients. We
therefore have four strategic imperatives and four strategic enablers that are integrated and work together to
enable us to restore leadership in the market.
2018-2020: Pre-Covid-19
Delivering our Group growth strategy, premised on the overarching guiding purpose - to bring possibilities to
life.
Three strategic priorities
• Create a thriving, entrepreneurial organisation.
• Restore leadership in our core businesses.
• Build pioneering new propositions.
Three enablers
• Build a scalable, digital-first, business.
• Pursue growth opportunities.
• Play a shaping role in Africa’s growth and sustainability.
2020-2021: Covid-19
Immediate stabilisation of the business as a result of the Covid-19 pandemic arising from March 2020.
Ensuring business resilience through:
• Capital and liquidity preservation; and
• Operational stability.
Delivering our corporate purpose through:
• The safety and wellbeing of our employees.
• The safety and financial wellbeing of our customers.
• Safeguarding lives in the communities we serve.
2021 and beyond: Post–Covid-19
Purpose-led ethos and a customer centric business model where our focus is on ensuring that our
propositions, distribution channels, market footprint, capabilities, mindsets and behaviours deliver on the
needs of our customers.
Four imperatives
• Lead with purpose and deliver shared value to a broad range of stakeholders.
• Solve for customers' intrinsic needs through hyper-personalised propositions delivered in the right key
moments.
• Deliver propositions through effective, digital-first distribution channels that complement our
customers' behavioural patterns.
• Establish a diverse market footprint that best meets our customers' expectations.
Four enablers
• Invest in strategic capabilities that drive market leadership.
• Build a modern technology architecture that powers digital transformation.
• Create an execution model that delivers fast-lane innovation.
• Develop and nurture an entrepreneurial culture.
Normalised financial results as a consequence of Barclays PLC Separation
A normalised view of the 2020 annual results is provided which adjusts for the consequences of the
separation from Barclays PLC. This view better reflects the Group’s underlying performance. International
Financial Reporting Standards (IFRS) compliant financial results will continue to be presented as required by
the Companies Act and the JSE Limited (JSE) Listings Requirements and include a reconciliation between the
normalised and IFRS views. Normalised results will be presented for future periods to the extent that the
financial impact of the Separation is considered material.
Performance overview for the period ended 31 December 2020
Total income
2020 Increased 2% 2019 2020 Increased 2% 2019
R81 593m IFRS R80 120m R81 382m Normalised R79 961m
Headline earnings per ordinary share
2020 Decreased 58% 2019 2020 Decreased 51% 2019
730.9 cents IFRS 1 750.1cents 946.5 cents Normalised 1 926.0 cents
Basic earnings per share
2020 Decreased 59% 2019 2020 Decreased 50% 2019
711.8 cents IFRS 1 717.6 cents 940.2 cents Normalised 1 895.0 cents
Net asset value per ordinary share
2020 Increased 2% 2019 2020 Increased 4 % 2019
13 957 cents IFRS 13 669 cents 13 103 cents Normalised 12 605 cents
Return on equity
2020 2019 2020 2019
5.2% IFRS 13.1% 7.2% Normalised 15.8%
Cost-to-income ratio
2020 2019 2020 2019
59.0% IFRS 60.9% 56.0% Normalised 58.0%
Net interest margin
2020 2019 2020 2019
4.17% IFRS 4.50% 4.17% Normalised 4.50%
Dividend per ordinary share
2020 Decreased 100% 2019
0 cents IFRS 1 125 cents
Loans and deposits growth
Gross loans and advances to customers
R974bn (2019: R946bn)
Deposits due to customers
R952bn (2019: R826bn)
Risk profile
Stage 3 loans ratio to gross loans and advances
6.28% (2019: 4.67%)
Liquidity coverage ratio
120.6% (2019: 134.4%)
Sound capital
Common Equity Tier 1 ratio
11.2% (2019: 12.1%)
Short form statement
This short-form announcement is the responsibility of the directors of Absa Group Limited. It is only a
summary of the information in the full announcement.
Any investment decisions by stakeholders should be based on consideration of the full announcement
published on https://www.absa.africa/absaafrica/investor-relations/financial-results/ and on the following JSE
link: https://senspdf.jse.co.za/documents/2021/jse/isse/ABGE/ABSAFY20.pdf
This announcement has not been audited. The annual financial statements were audited by Ernst & Young
Inc., who expressed an unmodified opinion thereon. The full audit opinion, including any key audit matters,
will be available at https://www.absa.africa/absaafrica/investor-relations/annual-reports/ when Absa
Group's full annual financial statements are released on or about 15 March 2021. The annual financial
statements and auditors’ report thereon are available for inspection at the Company’s registered office.
Registered office
7th Floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001
Board of directors
Group independent non-executive directors
W E Lucas-Bull (Independent Chairman), S M Pityana (Lead Independent Director), T Abdool-Samad, A B
Darko(2)(5), R A Keanly, M S Merson(5), S J Munyantwali (4)(5), D Naidoo, F Okomo-Okello(3), I Rensburg, N S
Mjoli-Ncube
Group non-executive directors
C Beggs, F Tonelli, R van Wyk
Group executive directors
D Mminele(1)(5) (Group Chief Executive), J P Quinn (Financial Director)
(1) South African
(2) Ghanaian
(3) Kenyan
(4) Ugandan
(5) British
Declaration of dividends
In the current economic climate, capital conservation is regarded as paramount to the Group’s sustainability
over the short to medium term. The Prudential Authority of the South African Reserve Bank (PA) has
encouraged the boards of directors of banks to ensure that capital conservation takes priority over any
distributions of dividends on ordinary shares. As a result of this guidance from the PA and the Board’s view as
to the need for capital conservation and the appropriate management of capital at this time, no final ordinary
dividend for the period ended 31 December 2020 has been declared by the Group.
Absa Group Limited is a company domiciled in South Africa. Its registered office is 7th Floor, Absa Towers
West, 15 Troye Street, Johannesburg, 2001.
15 March 2021
Sponsors
Lead independent sponsor
J. P. Morgan Equities South Africa Proprietary Limited
Joint sponsor
Absa Bank Limited (Corporate and Investment Bank)
Date: 15-03-2021 07:05:00
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