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ABSA BANK LIMITED - ABSP/ BIABS - Audited summary consolidated financial results: YE 31 December 2020 and preference share dividend

Release Date: 15/03/2021 07:05
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ABSP/ BIABS - Audited summary consolidated financial results: YE 31 December 2020 and preference share dividend

Absa Bank Limited
Registration number: 1986/004794/06
Incorporated in the Republic of South Africa
JSE share code: ABSP
ISIN: ZAE000079810
Bond Issuer Code: BIABS
(“Absa Bank”, “the Bank” or “the Company”)

Audited summary consolidated financial results for the reporting period ended 31 December 2020 and preference share
dividend declaration.

“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, i t
significantly impacted banking performance while rapidly accelerating the evolution of the industry. Against this backdr op,
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 Bank’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              Decreased 2%      2019              2020              Increased 2%     2019
 R53 687m          IFRS              R52 757m          R53 464m          Normalised       R52 594m

                                   Headline earnings per ordinary share
 2020              Decreased 81%     2019              2020              Decreased 69%   2019
 312.5 cents       IFRS              1632.6 cents      592.0 cents       Normalised      1 927.3 cents

                                        Basic earnings per share
 2020              Decreased 83%     2019              2020              Decreased 70%    2019
 262.3 cents       IFRS              1 583.3 cents     564.4 cents       Normalised       1 877.8cents

                                    Net asset value per ordinary share
 2020              Increased 3%      2019              2020           Decreased 7%       2019
 18 458 cents      IFRS              18 000 cents      15 250 cents   Normalised         16 407 cents

                                              Return on equity
 2020                                2019              2020                              2019
 1.7%              IFRS              9.3%              3.5%           Normalised         12.2%

                                            Cost-to-income ratio
 2020                                2019              2020                              2019
 61.8%             IFRS              66.6%             59.0%          Normalised         63.4%

                                             Net interest margin
 2020                                2019              2020                              2019
 3.25%             IFRS              3.53%             3.25%          Normalised         3.46%

                                      Dividend per preference share
 2020                                Decreased 27%                    2019
 5 170.89 cents                      IFRS                             7 065.21 cents

Loans and deposits growth
Gross loans and advances to customers
R845bn (2019: R816bn)

Deposits due to customers
R795bn (2019: R678bn)
Risk profile
Stage 3 loans ratio to gross loans and advances
6.18% (2019: 4.47%)

Liquidity coverage ratio
126.9% (2019: 139.9%)

Sound capital
Common Equity Tier 1 ratio
10.6% (2019: 11.9%)

Short form statement
This short-form announcement is the responsibility of the directors of Absa Bank 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.a bsaa frica/inv estor-rela tions/fina ncial-results/ and on the following JSE links:

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 /a bsaafrica/i nvestor-relations/a nnual-re ports/ when Absa Bank'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
Independent non-executive directors
W E Lucas-Bull (Independent Chairman), S M Pityana (Lead Independent Director), T Abdool-Samad, M S Merson(1), F Okomo-

Executive directors
D Mminele(1(3)) (Group Chief Executive), J P Quinn (Financial Director)

(1) South African
(2) Kenyan
(3) British
Declaration of final preference share dividend number 30
The Absa Bank preference shares have an effective coupon rate of 70% of Absa Bank’s prevailing prime overdraft lending
rate (prime rate). Absa Bank’s current prime rate is 7%.

Notice is hereby given of preference dividend number 30, equal to 70% of the average prime rate for 1 September 2020 to
28 February 2021. The dividend is payable on Monday, 19 April 2021, to shareholders of the Absa Bank preference shares
recorded in the Register of Members of the Company at the close of business on Friday, 16 April 2021.

The directors of Absa Bank confirm that the Bank will satisfy the solvency and liquidity test immediately after completion of
the dividend distribution.
Based on the average prime rate, the preference dividend payable for the period 1 September 2020 to 28 February 2021 will
be 2 429.86301 cents per Absa Bank preference share.

The dividend will be subject to dividends withholding tax at a rate of 20%. In accordance with paragraphs 11.17(a) (i) to (ix)
and 11.17(c) of the JSE Listings Requirements, the following additional information is disclosed:

- The dividend has been declared out of income reserves.
- The local dividend tax rate is twenty per cent (20%).
- The gross local dividend amount is 2 429.86301 cents per preference share for shareholders exempt from the dividend
- The net local dividend for shareholders subject to withholding tax at a rate of 20% amounts to 1 943.89041 cents per
preference share.
- Absa Bank currently has 4 944 839 preference shares in issue.
- Absa Bank’s income tax reference number is 9575117719.

In compliance with the requirements of Strate, the electronic settlement and custody system used by JSE, the following
salient dates for the payment of the dividend are applicable:

Last day to trade cum dividend                                             Tuesday, 13 April 2021
Shares commence trading ex-dividend                                        Wednesday, 14 April 2021
Record date                                                                Friday, 16 April 2021
Payment date                                                               Monday, 19 April 2021

Share certificates may not be dematerialised or rematerialised between Wednesday, 14 April 2021 and
Friday, 16 April 2021, both dates inclusive. On Monday, 19 April 2021, the dividend will be electronically transferred to the
bank accounts of shareholders.

On behalf of the Board

N R Drutman
Company Secretary

15 March 2021
Absa Bank 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: 15-03-2021 07:05:00
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