Absa says it grabbed back some retail banking market share during 2018
CFO Jason Quinn says the bank is pleased with its improved momentum as the group embarks on a new growth strategy
Absa said on Monday it regained some market share in SA’s retail banking segment, helping the group to lift both revenues and profits in the year ended December.
Normalised headline earnings rose 3% to R16.1bn as revenues grew 4% to R75.7bn, Absa said on Monday.
“Despite a challenging backdrop, we are particularly pleased with our improved momentum as we embark on our new growth strategy,” said Jason Quinn, Absa’s finance chief.
Gross loans to customers increased by 13%, Quinn said.
In its retail business in SA, “lending momentum outpaced the market”, Absa said.
The bank recorded “good new business growth” in home loans, vehicle and asset finance, and personal loans.
The group said it “also gained market share in deposits”, which grew 11% thanks to growth in fixed and notice deposits.
Absa previously lost ground in the domestic lending market, which it blamed on the constraints imposed by its erstwhile parent, Barclays. Now that Barclays has sold down its majority stake, Absa has said it plans to regain market share.
The group is under new leadership, with Maria Ramos having stepped down as CEO at the end of February.
René van Wyk, a nonexecutive director at Absa since February 2017 and a former registrar of banks at the SA Reserve Bank, has taken over in the interim.
Absa said on Monday its return on equity improved in 2018 to 16.8%, from 16.5%. It lifted its dividend by 4% to R11.10 a share.
“With major changes bedded down in 2018, the framework for the business has been reset,” said van Wyk.
“The strong leadership team and structure that was put in place over the past year can now deepen the efforts within their business units to deliver against our ambitious growth strategy.”
Bloomberg reported last week that Absa was restructuring its SA retail and business banking unit, just months after reducing the division’s management team and rolling out a new strategy.
Finance labour union Sasbo was recently notified to begin consulting staff on the potential impact of the move. About 15 retail-banking executives exited their positions at the lender in June 2018, after a similar process was followed to flatten the unit’s top structure, Bloomberg said.