Absa points to improving home loan environment

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Absa points to improving home loan environment

Staff Writer

August 19, 2024
1:28 pm

Estimated reading time: < 1 minute

Absa Group has released its interim financial results for the six months ended 30 June 2024, reflecting a period of strategic adjustments and financial resilience.

The Product Solutions Cluster (PSC) recorded an overall improvement in its credit impairments and credit loss ratios, particularly in home loans, due to better management of early arrears and handling of loans in the legal process.

Key Financial Highlights:

Home Loans Performance

Within the PSC, net loans and advances to customers rose by 4% to R423 billion. Home Loans specifically grew by 3% to R307 billion.

Home Loans headline earnings grew by 17% to R727 million, as credit impairments fell by 21% to R771 million, resulting in an improved credit loss ratio of 0.49% from 0.65%.

This improvement was driven by better management of early arrears and handling of loans in the legal process.

Home Loans pre-provision profits declined by 4%, due to flat revenue growth and a 7% increase in operating expenses.

Overall Credit Impairments: PSC’s credit impairments decreased by 6%, with fewer losses from bad loans.

The credit loss ratio improved from 1.11% to 1.00%. This ratio measures the proportion of loans that are not expected to be repaid. A lower ratio indicates better loan performance.

Product Solutions Cluster:

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