Absa (AGRPY, $22.18) earnings double in 2021

Absa Group headline earnings more than doubled to R18.6 billion in 2021 (R8 billion in 2020), on the back of an increase in pre-provision profit and reduction in the impairments charge.

Absa generates most of its income from  South Africa. The  country’s gross domestic product strengthened from a low base in 2020 and experienced upward momentum for most of the year.

Revenue growth came in at +6%, or +8% in constant currency, bolstered by strong growth in net interest income (+9%).

Non-interest income was close to 2020 levels. The adverse impact of Covid-19-related claims in the insurance business offset strong income increases in areas including Global Markets.

For 2022, Absa expects high single-digit revenue growth, and return on equity at similar levels to 2021.

“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 Jason Quinn, Absa Interim Group Chief Executive. “We will pursue growth opportunities appropriate to the environment and shore up buffers as needed to ensure that the bank remains resilient.”