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Despite significantly higher credit impairments and the material impact of the lockdowns on transactional volumes, Absa Group, including all business units, remained profitable. In addition, revenue increased by 3% while the cost-to-income ratio reduced from 56.7% to 53.9%.

The group also reported an 82% decline in normalised interim earnings after impairments increased four-fold to R14.7 billion. Impairment charges rose as customers and clients struggled to repay debt and as the Group took decisive action to increase impairment provisions against future potential credit losses. The Group expects a continued difficult environment for the consumer and heightened uncertainty is expected in the remainder of 2020.

“In the current economic climate, ensuring continued operational and financial resilience is paramount. We are therefore temporarily holding our growth ambitions in abeyance to focus on cost management and capital and liquidity preservation, while continuing to support customers,” said Daniel Mminele, Absa Group Chief Executive.