Avior Capital Markets - Absa Group Limited (101N) ABSA | Improving profitability

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Avior Capital Markets

Harry Botha

ABSA | Improving profitability

ABSA's (ABG) FY '18 results showed that the bank is on track to gradually gain back market share in SA. Accounting changes and costs related to restructuring and separation (from Barclays PLC) distorted ABG's income statement metrics in FY â€˜18. However, we believe that the bank's underlying profitability is improving. Despite challenging SA operating conditions, we believe ABG can deliver high single digit earnings growth over the next three years. Please find our analysis and updated forecasts in this note.

25/03/2019 15 EN

Underlying

Absa Group Limited

Barclays Africa Group is engaged in provision of personal and business banking, credit cards, corporate and investment banking, wealth and investment management as well as bancassurance. Co. operates in three business segments; Retail and Business Banking (RBB) delivers targeted solutions to individuals and small businesses; Corporate, Investment Bank and Wealth operates a global model, leveraging their offerings, tapping into global expertise to provide comprehensive solutions across borders; and Financial Services cluster enhances the RBB customer and client value proposition with financial solutions.

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ZAE000255915 Johannesburg Stock Exchange South Africa

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Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Harry Botha

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ABSA | Improving profitability

ABSA GROUP is downgraded to Slightly Positive due to increased risk

ABSA | Set to deliver growth despite SA constraints

SA Banks | Resilient earnings growth

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

SA Banks | Low credit risk in commercial property | Time to buy SA banks

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