South Africa drives 72% of Absa’s earnings. Why look elsewhere?

Absa wants to complete the reorganisation of its business outside South Africa within two years, even though its home market is currently doing the heavier lifting on earnings.

The latest timetable comes from an interview with Africa Regions executive Charles Russon, reported by Bloomberg on 10 November. The bank is pursuing a Nigerian merchant-banking licence and establishing a representative office in Angola as it works to spread its sources of growth.

The apparent contradiction is the point: a profitable home business can support expansion, while leaving the group exposed if too much of its income depends on a small number of markets.

The numbers behind the push

Absa’s interim results for the six months to 30 June 2026 show South Africa contributed about 72% of group headline earnings. Its earnings rose 17%, while the Africa Regions business declined 10% in rand terms.

Those are earnings shares, not the share of customers or branches. A bank can operate in many countries and still rely on relatively few of them for most of its profit.

What is actually changing?

According to the Bloomberg interview, Absa has begun the process of converting its Nigerian representative office into a merchant bank. Russon said he hoped the licensing-to-operation process would take 12 to 18 months. A licence would allow corporate deposits, lending, investment banking and project finance.

Angola’s planned representative office is a different step from a fully licensed lending bank. Elsewhere, the reported programme includes consolidating two Tanzanian banks and working towards a larger stake in Absa Bank Kenya. These are plans and targets, rather than confirmation that every transaction or regulatory approval has been completed.

Why a wider footprint is not enough

Absa’s own August results presentation notes explain why diversification is harder than adding countries to a map. Lower policy rates in Ghana and Kenya, together with a stronger rand, weighed on the Africa Regions result.

There was also underlying growth: customer loans in that region increased 14% in constant currency, compared with 5% when measured in rand. That gap matters when judging an international bank. Operating growth and the earnings reported back to South African shareholders can move at different speeds.

The bank also cautioned in August that some changes in its earnings mix reflected slower growth in historically large contributors, rather than a decisive improvement elsewhere.

What South Africans should watch

SBL analysis: For local businesses trading across borders, the useful test is whether the expansion produces practical financing, payment and advisory options in the markets where they operate. A licence application alone does not establish which products a customer can use today.

For shareholders, the test is more demanding than a larger footprint: new operations must produce earnings that justify the capital committed, while coping with currency movements and local interest-rate changes.

South Africa’s strong contribution gives Absa a base from which to pursue that ambition. The next evidence will be licences granted, businesses integrated and a broader earnings contribution in subsequent results. The two-year timetable is management’s goal, not a guaranteed outcome.