Absa, one of South Africa’s biggest banking groups, is moving more customers onto digital banking, but its latest results reveal a contradiction at the heart of its technology strategy: adoption is rising, while the cost of running the business is not falling.
Digitally active customers grew 14%, but the cost-to-income ratio edged up as technology costs hit R8.78 billion ($538.7 million), alongside a further R200 million ($12.3 million) impairment on software assets.
The numbers suggest African banks may be swapping the costs of physical infrastructure for an expensive technology stack. While apps can reduce the cost of serving individual customers, banks still have to fund the software, cloud infrastructure, cybersecurity, data systems and technical talent required to keep those platforms running.
Absa says it serves more than 13.4 million customers across its pan-African operations. But that growth is happening alongside a substantial technology bill.
“Total IT spend, including staff, amortisation and depreciation, increased 7% to R8.8 billion, ” the Group said in its interim results.
That spending represented about 28% of Absa’s R31.4 billion ($1.9 billion) operating expense base in the first half of 2026. Absa impaired another R200 million ($12.3 million) in software assets during the six months ended June, after a R2.4 billion ($147.2 million) write-down in 2025.
“The Group impaired certain software assets for which the value in use is determined to be zero, mainly derived from head office,” Absa explained in its results.
Absa is not cutting its investment in tech, but spending more while recognising that some of its existing systems no longer have economic value. The bank also says the latest write-downs need to be understood against changes in its operations and investments.
“The impairments were mainly driven by changes in the Group’s strategy, regulatory developments and the pace of technological change,” stated the lender.
A digital customer may be cheaper to serve for some transactions than a customer visiting a branch.
Absa operates across 17 countries, with banking businesses in South Africa, Kenya, Ghana, Uganda, Zambia, Tanzania, Botswana, Mozambique, Mauritius and Seychelles. It has 1,043 outlets, 6,212 ATMs and 37,030 employees serving its 13.4 million customers.
That scale helps explain why digital migration has not translated directly into a lower cost base. Absa reported total income of R58.79 billion ($3.61 billion), up 4.1%, for the six months ended 30 June. Headline earnings per ordinary share rose 7.9%, while return on equity improved to 15%, from 14.8%.
Gross loans and advances increased 5%, while deposits and debt funding grew 8%. The bank declared an interim dividend of 850 cents per share, an 8.3% increase from 785 cents.
True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders and individuals rewiring Africa’s technical frameworks. Get 20% off Early Bird tickets for a limited time.
from TechCabal https://ift.tt/tKAEOH6
via IFTTT
I am the CEO of 9JAGISTLAND.My name is Adedeji Timothy and my co-owner is Oyekola Damilare.This blog is born out of our passion to educating to people in all aspect of internet life.We are enthusiastic about writing posts and articles online.
Write your views on this post and share it. ConversionConversion EmoticonEmoticon