JSE:ABG

Stock Analysis Report

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Executive Summary

Absa Group Limited provides various financial products and services in South Africa and internationally.


Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Absa Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ABG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.3%

ABG

5.8%

ZA Banks

-0.7%

ZA Market


1 Year Return

-53.1%

ABG

-48.1%

ZA Banks

-23.8%

ZA Market

Return vs Industry: ABG underperformed the ZA Banks industry which returned -47.8% over the past year.

Return vs Market: ABG underperformed the ZA Market which returned -23.6% over the past year.


Shareholder returns

ABGIndustryMarket
7 Day4.3%5.8%-0.7%
30 Day-11.1%-2.5%-0.6%
90 Day-39.7%-34.6%-8.1%
1 Year-48.3%-53.1%-44.3%-48.1%-13.0%-23.8%
3 Year-32.5%-46.6%-18.3%-31.3%0.3%-18.8%
5 Year-34.7%-54.9%-10.1%-32.7%9.9%-17.5%

Price Volatility Vs. Market

How volatile is Absa Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Absa Group undervalued compared to its fair value and its price relative to the market?

4.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ABG (ZAR81.2) is trading above our estimate of fair value (ZAR18.43)

Significantly Below Fair Value: ABG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ABG is poor value based on its PE Ratio (4.7x) compared to the Banks industry average (4.4x).

PE vs Market: ABG is good value based on its PE Ratio (4.7x) compared to the ZA market (8x).


Price to Earnings Growth Ratio

PEG Ratio: ABG is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: ABG is overvalued based on its PB Ratio (0.6x) compared to the ZA Banks industry average (0.6x).


Next Steps

Future Growth

How is Absa Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

3.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABG's forecast earnings growth (3.4% per year) is below the savings rate (9.5%).

Earnings vs Market: ABG's earnings (3.4% per year) are forecast to grow slower than the ZA market (19.2% per year).

High Growth Earnings: ABG's earnings are forecast to grow, but not significantly.

Revenue vs Market: ABG's revenue (6.7% per year) is forecast to grow slower than the ZA market (8.5% per year).

High Growth Revenue: ABG's revenue (6.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ABG's Return on Equity is forecast to be low in 3 years time (12.6%).


Next Steps

Past Performance

How has Absa Group performed over the past 5 years?

0.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ABG has high quality earnings.

Growing Profit Margin: ABG's current net profit margins (19.7%) are lower than last year (19.8%).


Past Earnings Growth Analysis

Earnings Trend: ABG's earnings have grown by 0.3% per year over the past 5 years.

Accelerating Growth: ABG's earnings growth over the past year (2.4%) exceeds its 5-year average (0.3% per year).

Earnings vs Industry: ABG earnings growth over the past year (2.4%) exceeded the Banks industry -1.9%.


Return on Equity

High ROE: ABG's Return on Equity (12.4%) is considered low.


Next Steps

Financial Health

How is Absa Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: ABG's Assets to Equity ratio (10.9x) is moderate.

Allowance for Bad Loans: ABG has a low allowance for bad loans (63%).

Low Risk Liabilities: 73% of ABG's liabilities are made up of primarily low risk sources of funding.

Loan Level: ABG has an appropriate level of Loans to Assets ratio (66%).

Low Risk Deposits: ABG's Loans to Deposits ratio (101%) is appropriate.

Level of Bad Loans: ABG has a high level of bad loans (4.9%).


Next Steps

Dividend

What is Absa Group's current dividend yield, its reliability and sustainability?

13.85%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ABG's dividend (13.85%) is higher than the bottom 25% of dividend payers in the ZA market (4.59%).

High Dividend: ABG's dividend (13.85%) is in the top 25% of dividend payers in the ZA market (12.95%)


Stability and Growth of Payments

Stable Dividend: ABG's dividend payments have been volatile in the past 10 years.

Growing Dividend: ABG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (65.5%), ABG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ABG's dividends in 3 years are forecast to be covered by earnings (57.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

Aaron Mminele (54yo)

0.42

Tenure

Mr. Aaron Daniel Mminele serves as Group Chief Executive Officer and Executive Director at Absa Group Ltd. and Absa Bank Ltd. since January 15, 2020. Mr. has substantial banking experience, having most rec ...


Leadership Team

NamePositionTenureCompensationOwnership
Jason Quinn
Group Finance Director & Executive Director3.75yrsR29.51mno data
Peter Matlare
Deputy Chief Executive Absa Group8.5yrsR18.26mno data
Charles Russon
Chief Executive of Corporate & Investment Banking1.92yrsR23.51mno data
Arrie Rautenbach
Chief Executive of Retail & Business Banking - South Africa2.25yrsR30.26mno data
Aaron Mminele
Group CEO & Executive Director0.42yrno datano data
Alan Hartdegen
Head of Investor Relationsno datano datano data
Charles Wheeler
General Counsel7.42yrsno datano data
Akash Singh
Group Chief Compliance Officer0.58yrno datano data
Rozett Phillips
Group Executive of People & Culture1.17yrsno datano data
Paul O'Flaherty
Chief Executive of Engineering Services1.58yrsR1.54mno data

1.9yrs

Average Tenure

54yo

Average Age

Experienced Management: ABG's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jason Quinn
Group Finance Director & Executive Director3.75yrsR29.51mno data
Peter Matlare
Deputy Chief Executive Absa Group8.5yrsR18.26mno data
Aaron Mminele
Group CEO & Executive Director0.42yrno datano data
Alex Darko
Independent Non-Executive Director5.67yrsR1.10mno data
Wendy Lucas-Bull
Independent Non-Executive Chairman7.17yrsR5.28mno data
Mark Merson
Independent Non-Executive Director6.42yrsR876.36kno data
Francis Okomo-Okello
Independent Non-Executive Director5.67yrsR628.01kno data
Colin Beggs
Independent Non-Executive Director10yrsR2.74mno data
Mohamed Husain
Lead Independent Director2yrsR2.06mno data
Dhanasagree Naidoo
Independent Non-Executive Director4.08yrsR600.12kno data

5.7yrs

Average Tenure

59yo

Average Age

Experienced Board: ABG's board of directors are considered experienced (5.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Absa Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Absa Group Limited
  • Ticker: ABG
  • Exchange: JSE
  • Founded:
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: R67.255b
  • Shares outstanding: 828.26m
  • Website: https://www.absa.africa

Number of Employees


Location

  • Absa Group Limited
  • Absa Towers West
  • 7th Floor
  • Johannesburg
  • Gauteng
  • 2001
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ABGJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJan 1992
AGRP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
AU61DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
AGRP.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJun 2003

Biography

Absa Group Limited provides various financial products and services in South Africa and internationally. It offers personal and business banking, corporate and investment banking, wealth and investment management, and insurance services. The company offers retail and business banking products and services to individual, enterprise, and commercial customers, including residential property-related finance solutions; vehicle and asset finance products and services; credit cards; personal loans; short-term insurance products; and transactional banking, savings, and investment products and services. It also provides commercial property finance, term and agriculture loans, and overdraft services; notice, fixed, cheque account, savings and transmission, foreign currency, and call deposits; and transactional products and electronic banking services. In addition, the company offers investment banking services; private equity and infrastructure investments; corporate banking products and services; and wealth management services. Further, it provides life insurance products covering death, disability and retrenchment, funeral, and investment products; investments, such as asset management, multi-management, unit trusts, and linked investment products; treasury services; and fiduciary and financial advisory services. Additionally, the company offers market services; trade and working capital solutions; and cash management, payment, and liquidity products and solutions. The company was formerly known as Barclays Africa Group Limited and changed its name to Absa Group Limited in May 2018. The company is based in Johannesburg, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/01 06:49
End of Day Share Price2020/05/29 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.