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ABSA GROUP LIMITED - Unaudited interim results for the reporting period ended 30 June 2020

Release Date: 24/08/2020 07:05
Wrap Text
Unaudited interim results for the reporting period ended 30 June 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

Unaudited interim results for the reporting period ended 30 June 2020

We are an African group, inspired by the people we serve and determined to be a globally respected group that Africa can be
proud of. We are committed to finding local solutions to uniquely local challenges and everything we do focuses on adding

Three clear and focused strategic drivers in 2020
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.

Three clear and focused strategic drivers in 2020
1.       Continue to deliver on our Group strategy through targeted priorities as set out at the start of 2020
     -   Accelerating our journey towards becoming a thriving entrepreneurial organisation.
     -   Growing customer and client primacy ahead of the market.
     -   Advancing the digital maturity of our business.
     -   Building a market leading payments capability to create new revenue streams.
     -   Completing Separation successfully.
     -   Leveraging strategic partnerships.
     -   Driving operational efficiencies.

2.       Immediate stabilisation of the business as a result of Covid-19 pandemic arising in March 2020
     -   Ensuring business resilience through:
         o Capital and liquidity preservation; and
         o   Operational stability.

     -   Delivering our corporate purpose through:
         o The safety and wellbeing of our employees;
         o   The safety and financial wellbeing of our customers; and
         o   Safeguarding the lives of the communities we serve.

3.       Resetting our Group Strategy to maintain relevance and competitiveness in the ‘Next Normal’.
Normalised financial results as a consequence of Barclays PLC Separation
A normalised view of the 2020 half-year 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.
The normalised results have not been prepared using the accounting policies of the Group and do not comply with IFRS. These
results are considered to be pro forma financial information, are presented for illustrative purposes only and have been presented
in accordance with the JSE Listings Requirements, the SAICA Guide on Pro Forma Financial Information and any relevant
guidance issued by the IRBA. The normalised results have not been reviewed or reported on by the external auditors of the
Group and are the responsibility of the Group’s Board of Directors. Given its nature, the pro forma financial information may not
fairly present the Group’s financial position, changes in equity, and results of operations or cash flows.
Performance overview for the period ended 30 June
                                                  Total income
2020            Increased 3%      2019              2020           Increased 3%    2019
R40 355m        IFRS              R39 152m          R40 078m       Normalised      R39 071m

                                Headline earnings per ordinary share
2020            Decreased 93%     2019              2020           Decreased 82%   2019
67.7 cents      IFRS              920.0 cents       173.6 cents    Normalised      977.5 cents

                                  Basic earnings per ordinary share
2020            Decreased 94%     2019              2020           Decreased 82%   2019
58.8 cents      IFRS              918.9 cents       171.7 cents    Normalised      976.5 cents

                                  Net asset value per ordinary share
2020            Increased 4%      2019              2020           Increased 6%    2019
14 045 cents    IFRS              13 534 cents      13 080 cents   Normalised      12 335 cents

                                           Return on equity
2020            Decreased         2019              2020           Decreased       2019
1.0%            IFRS              14.0%             2.6%           Normalised      16.4%

                                          Cost-to-income ratio
2020            Decreased         2019              2020           Decreased       2019
57.1%           IFRS              58.7%             53.9%          Normalised      56.7%

                                          Net interest margin
2020            Decreased         2019              2020           Decreased       2019
4.23%           IFRS              4.52%             4.23%          Normalised      4.52%

                                     Dividend per ordinary share
2020                              Decreased 100%                   2019
0 cents                           IFRS                             505 cents

                                Gross loans and advances to customers
2020                              Increased 7%                     2019
R975bn                            IFRS                             R912bn

                                      Deposits due to customers
2020                              Increased 15%                    2019
R920bn                            IFRS                             R798bn

                                       Stage 3 loans ratio to gross loans and advances
2020                                         Increased                              2019
5.65%                                        IFRS                                   4.79%

                                                       Liquidity coverage ratio
2020                                         Decreased                              2019
126.6%                                       IFRS                                   127.0%

                                                  Common Equity Tier 1 ratio
2020                                         Decreased                              2019
11.0%                                        IFRS                                   12.5%

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 and on the following JSE link:

Copies of the full announcement may be requested from Absa Group Limited Investor Relations at

Registered office
7th Floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001

Board of directors
Group independent non-executive directors
W E Lucas-Bull(1) (Independent Chairman), S M Pityana(1) (Lead Independent Director), T Abdool-Samad(1), A B Darko(2)(3),
R A Keanly(1), M S Merson(2), S J Munyantwali (2)(5), D Naidoo(1), F Okomo-Okello(4), I Rensburg(1)

Group non-executive directors
C Beggs(1), D J Hodge(2), F Tonelli(1), R van Wyk(1)

Group executive directors
D Mminele(1) (2) (Group Chief Executive), P B Matlare(1) (Deputy Chief Executive and Chief Executive: Absa Regional
Operations), J P Quinn(1) (Financial Director)

(1) South African

(2) British

(3) Ghanaian

(4) Kenyan

(5) Ugandan
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 interim dividend for the period ended 30 June 2020 has been declared by the Group.

On behalf of the Board

N R Drutman
Company Secretary

24 August 2020

Absa Group Limited is a company domiciled in South Africa. Its registered office is 7th Floor, Absa Towers West, 15 Troye
Street, Johannesburg, 2001.

Lead independent sponsor
J. P. Morgan Equities South Africa Proprietary Limited

Joint sponsor
Absa Bank Limited (Corporate and Investment Bank)

Date: 24-08-2020 07:05:00
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