Absa digital growth contrasts with rising tech costs in African banking

Absa reported that digitally active customers rose 14% in the first half of 2026, yet its cost-to-income ratio edged upward as technology expenses climbed to R8.78 billion ($538.7 million) and it impaired another R200 million ($12.3 million) in software assets. Total IT spend, including staff, amortisation and depreciation, increased 7% to R8.8 billion, representing about 28% of the bank’s R31.4 billion operating expense base.

The lender serves more than 13.4 million customers across 17 African countries—South Africa, Kenya, Ghana, Uganda, Zambia, Tanzania, Botswana, Mozambique, Mauritius and Seychelles—operating 1,043 outlets, 6,212 ATMs and employing 37,030 people. Despite the digital push, Absa’s total income grew only 4.1% to R58.79 billion, headline earnings per share rose 7.9%, return on equity improved to 15% from 14.8%, and it declared an interim dividend of 850 cents per share, up 8.3%.

The results suggest African banks may be trading the costs of physical branches for an expensive technology stack, where app‑based service reduces per‑customer costs but requires heavy ongoing investment in software, cloud infrastructure, cybersecurity, data systems and technical talent.

Will Absa’s rising tech costs lead to higher fees for customers, or can the bank find efficiencies to keep digital banking affordable?

SOURCE: https://techcabal.com/2026/08/18/absas-digital-push-comes-with-a-540-million-price-tag/