Absa Bank Ltd.

zaAA+/zaA-1+ Top-tier position in South Africa and four other African markets. Diversified business segments support revenue stability. Moderate levels of capitalization and earnings, according to our risk-adjusted capital (RAC) ratio. Modest coverage of nonperforming loans (NPLs)for the economic risk level. Reliance on short-term wholesale funding, similar to all rated banks in South Africa. We believe the stability of the domestic banking system, underpinned by high barriers to entry, will continue to support Absa Bank Ltd.'s (Absa's) business and earnings stability. The group's earnings growth will likely be spurred by strong retail, banking operations in South Africa, as well as the group's wider African franchise. We anticipate a RAC ratio of 6.0%-6.5% over the next 18-24 months, on the back of

...We believe the stability of the domestic banking system, underpinned by high barriers to entry, will continue to support Absa Bank Ltd.'s (Absa's) business and earnings stability. The group's earnings growth will likely be spurred by strong retail, banking operations in South Africa, as well as the group's wider African franchise. We anticipate a RAC ratio of 6.0%-6.5% over the next 18-24 months, on the back of sustained loan growth (10%-12%) over the same period. We believe the group will continue to perform in line with our expectations for the South African banking sector, posting a normalized cost of risk at about 1%, below our forecast for the sector average at 1.2%. Similarly to peers, the...

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