The improvement in part reflects a stronger than expected economic recovery in South Africa, where Absa generates most of its income.

South Africa’s gross domestic product improved from a low base in 2020 and showed improving momentum for most of the year. All of the countries in which Absa has a presence look to have returned to positive economic growth during 2021.

“This is a strong set of results which reflect the benefit of, not only the improved operating environment in 2021, but also the deliberate actions that we have taken to ensure that Absa remains resilient and poised to resume our growth plans in a favourable environment,” said Jason Quinn, Absa Interim Group Chief Executive, he said.

 “Our purpose-led approach to supporting our clients and communities defined our success in a tough environment while also creating value for shareholders,” he said.

Revenue growth remained resilient at six per cent, or eight per cent in constant currency, supported by strong growth in net interest income (up nine per cent).

 Non-interest income was in line with 2020 levels, as the negative impact of COVID-19-related claims in the insurance business eroded the benefit of strong income increases in areas including global markets.

Solid revenue growth and cost management helped to deliver positive pre-provision profit growth over the past two years.

Customer deposits grew 12 per cent, supported by strong performance in the retail and business banking and corporate deposit portfolios and the closure of the Absa Money Market Fund, with a significant portion of those customers electing to migrate to Absa deposit products. Growth in gross customer advances at seven per cent was supported by strong growth in secured assets in South Africa, where home loans increased nine per cent and vehicle asset finance rose 10 per cent as Absa continued to gain market share in these areas.

On the outlook of the Absa Bank Group, Quinn said “While the outlook for the global economy in 2022 is particularly uncertain, we feel positive about the strong base that we have built in the past few years and how this has positioned us to deliver on our strategic objectives,” said Quinn.

“We will pursue growth opportunities appropriate to the environment and shore up buffers as needed to ensure that the bank remains resilient,” he said.

“We have come through the crisis in a strong position, having focused on managing operating leverage, building balance sheet resilience and preserving capital,” said Punki Modise, Absa Interim Group Financial Director.

“These actions and our financial performance resulted in a return on equity that exceeds our cost of equity, years ahead of expectation,” she said.

Return on equity improved to 15.8 per cent in 2021, while Absa Group’s Common Equity Tier 1 ratio was strong at 12.8 per cent.

 At this level, Absa’s capital reserves are above the Board target level and above the minimum regulatory capital requirement level.