Absa Aims to Reduce Expenses and Achieve R5 Billion in Savings Over Three Years -

Absa Group has set a goal to cut costs by R5 billion ($273 million) over the next three years, solidifying its status as the third-largest bank in South Africa.

After already achieving R1.4 billion in savings last year, Absa’s interim CEO, Charles Russon, made remarks on Tuesday following a profit report that exceeded analysts’ predictions.

Absa is poised to take advantage of a resurgence in the South African market, with the economy projected to grow by up to 2% over the next two years, according to the bank’s estimates.

The formation of a coalition government and a reliable electricity supply after years of outages is fostering a revival in consumer confidence in Africa’s most industrialized country.

Read: Absa exceeds profit forecasts as the South African economy stabilizes

“We are all observing that the macroeconomic indicators are beginning to improve,” Russon noted in an interview. He mentioned that the anticipated savings would enable the bank to “ultimately reinvest where we identify opportunities.”

The bank has initiated a restructuring of certain divisions, which includes reestablishing a specialized retail-lending segment along with private wealth services to recover market share locally. The restructured retail division is expected to become operational by June.

“South Africa represents 70% of our overall profits, making it critically important for us. We must ensure that this segment performs and meets our expectations,” Russon emphasized.

The bank also sees potential in expanding trade with partners beyond the United States and exploring new markets, especially as US President Donald Trump targets South Africa, accusing the nation of seizing land from farmers. It is worth noting that no private land has been appropriated in South Africa since the end of apartheid in 1994.

“While there is a significant amount of uncertainty, I remain hopeful that opportunities will emerge, and we must be ready to act on them,” Russon concluded.

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