Absa sees big drop in SA banking customers

Absa has reported a 12% drop in banking customers in reporting interim results for the period June 2013.

Headline earnings per share rose to 649 cents in the six months reporting period, from a restated 599.6 cents a year earlier, while revenue grew 2% to R20.2 billion.

Absa declared an interim dividend per share of 350 cents, and a special DPS of 708 cents after considering regulatory changes, the group’s strong capital position, strategic plans and near-term business objectives.

At the end of December 2012, Absa said it had 10.9 million customers, down from 12.1 million in 2011. By March 2013, MoneyWeb stated that Absa’s client numbers for retail and business banking in South Africa, had declined to 10.3 million, putting it behind Standard Bank with 10.4 million clients excluding business accounts.

Absa said on Tuesday (30 July), that its banking customers excludes Absa African operations, the Edcon portfolio and Woolworths Financial Services.

Earlier this month, regulators approved Absa Group’s R18.2 billion acquisition of Barclays’ African business.

Mobile banking

On Tuesday Absa said its outlets declined marginally to 864, from 874 in 2012, while total ATMs grew to 9,630, from 9,547 before.

Internet banking customers grew to 1.203 million, from 1.176 million in 2012, and from 150,000 in 2009, while mobile phone banking customers improved to 4.483 million, from 4.237 million before.

“Total information technology spend has decreased by 13% to R923 million and accounted for 8% of the Banks costs,” Absa said.

Launched in mid-April, Absa said in July (10th), that its app had achieved 133,000 downloads.

Absa ATM distribution
Absa ATM distribution
Absa electronic banking
Absa electronic banking

IT related spend

IT operating expenses decreased to R1.04 billion, from R1.15 billion in 2012. Total IT-related spend was flat at R2.6 billion and accounted for 20% of the group’s operating expenses, the bank said.

Absa pointed out that key IT risks include ageing technology and infrastructure, information technology security, logical access and system stability.

“These are being addressed by transformation programmes, overseen by an Information Technology Committee. Significant progress has been made in addressing these issues and the individual projects are on track,” it said.

The bank said that enhanced security features on the electronic banking platform resulted in improved system stability and assisted in accelerating the migration of more than 60% of customers from Business Integrator Online to Absa Online Business at the end of the reporting period.

“New innovations such as the recent launch of the electronic banking application, new functionality such as scan and pay, cardless deposits and e-statements have provided customers with alternative access to transact, strengthening the electronic customer value proposition.”

“There are more developments planned for 2014 to further enhance the digital capability,” Absa said.

Fraud

Absa said that digital fraud is receiving significant management attention given its dynamic and anonymous nature.

“The group continues to invest in both authentication and transaction monitoring technology and controls. Going forward, in addition to card and digital, focus will also be on credit application fraud.”

“Skills and resources were leveraged from the wider Barclays Group to assist in upskilling employees as well as leveraging technology and fraud solutions where possible,” the bank said.

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Absa sees big drop in SA banking customers