After Barclays’ withdrawal, the South African bank Absa Bank is struggling to come up with a commercial project in a tense competitive and economic context.
Released from the control of its historical shareholder, Barclays (a British multinational investment bank and financial services company headquartered in London), and anticipating the imminent arrival of its new CEO, Absa Bank is, in theory, in a strong position to come up with a new strategy.
But the South African banking group continues to follow the direction announced in early 2018.
This is despite the permanent transformation of the sector in the country, between the arrival of new online banks on the one hand, and branch closures and job losses caused by the economic crisis on the other.
Stay up to date with the latest finance news, wherever you are. Explore stories, headlines, and content on a whole range of topics, from business to Africa, finance, industries, economic, impact investing, biotech and much more. Discover world news with Born2Invest mobile app.
Our companion app helps you get comprehensive access to global business, stock market, finance news, and trending topics like blockchain and cryptocurrency.
Absa Bank ranks fifth in top 200
Widely considered the least flexible of the major South African banks and the least attractive to investors, Absa Bank sometimes struggled to adapt to market fluctuations. This year, the bank ranked fifth in the top 200, behind its main rivals, Standard Bank and FirstRand.
The results for the six months ended June 2019, which show a growth of only 3% in profits and dividends, tend to support that impression.
But the bank explains that, on the contrary, Barclays’ exit served as a catalyst for its “reset”, allowing Absa Bank to finally “pursue a coherent growth strategy for a financial services provider in Africa.”
Absa’s South African bank is an essential part of its project
“We have reduced management levels to bring managers and employees closer to front-line.”
The strategy presented in March 2018 put its South African retail bank, described as “essential”, at the heart of its growth project.
Absa has simplified its business model and organization by integrating its wealth management, insurance, distribution, and trust activities “in order to create a single point of sale combining all banking and non-banking services.”
The latest results indicate that this decision is bearing fruit. Real estate loans increased by 16% in the first half of 2019, in comparison, the market as a whole increased only by 7%.
Retail deposits increased by 12%, compared to a 9% increase in the market.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in jeuneafrique, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [1xBet Affiliate Program]
Wanna discover one weird sports betting niche with plenty of low-hanging fruit just waiting for you to exploit? Then read...
Which Are the Most Important Fintech News from February 2024
Monite secured $6 million in a top-up financing round, bringing its total seed-stage funding to $16 million. The funds will...
Spanish Pharma Listed Companies Reduce Their Profits by 37% in 2023
Of the Spanish pharma listed companies, PharmaMar has suffered the most significant drop in profits due to generic drug competition...
How Much Does Europe Invest in Sustainability
Europe is moving rapidly towards a renewal of the regulatory framework for sustainability , with the obligation for almost 50,000...
The German Medical Cannabis Market Could Be Worth Three Billion
Currently, the German medical cannabis market serves a relatively small part of the population, with approximately 28,000 patients, or less...
Biotech2 weeks ago
Haier Receives Authorization from the Cnmc to Buy 20% of Shanghai Raas from Grifols
Impact Investing4 days ago
Guarantee Fund in Italy Brings Maximum Business Coverage to 5 Million
Biotech1 week ago
Gotham Insists on Projecting Its Doubts on Grifols
Crypto2 days ago
Bitcoin, Soon an ATH of 70,000: Investors also FOMO These 5 Cryptos