Absa Group’s insurance business delivered a mixed performance in the first half of 2026, with strong growth in South Africa helping offset a steep decline in income from its African operations.
The banking group reported an 8% increase in aggregate net insurance income for the six months to June 30, driven largely by growth in its South African insurance business. However, insurance income from the Africa Regions segment fell by a dramatic 70%, highlighting the challenges facing the group outside its home market.
The decline contrasts with the robust performances reported by rival banks. Standard Bank’s Insurance and Asset Management division increased headline earnings by 15% to
R2.1-billion, supported by strong short-term insurance sales and growth in funeral and life insurance premiums. Nedbank also recorded a 20% rise in insurance income, boosted by premium growth and improved claims experience.
Strategic exit weighs on Africa insurance results
Absa said the sharp decline in Africa Regions insurance income was largely the result of strategic disposals completed in the first half of 2025.
The bank sold Absa Life Botswana, Absa Life Zambia and Global Alliance Mozambique as part of its shift towards a bancassurance model, where banks partner with insurance providers to distribute insurance products rather than owning insurance operations directly.
While the disposals were deliberate and aligned with the group’s strategic direction, they significantly reduced insurance income generated by the regional business during the reporting period.
Earnings pressure persists in South African insurance arm
Despite stronger insurance income, profitability in South Africa remained under pressure.
Insurance headline earnings in the Personal and Private Banking (PPB) division declined by 2% to R505-million. Within the segment, Life Insurance South Africa posted a marginal 1% increase in profit to R444-million, while non-life insurance headline earnings fell 15% to R152-million.
Absa attributed the decline in non-life earnings largely to weaker investment returns.
The broader PPB South Africa business performed considerably better. Headline earnings rose 10% to R3.28-billion, supported by a 5% increase in pre-provision profits. Vehicle and Asset Finance earnings climbed 22% to R366-million, while Unsecured Lending surged 70% to
R328-million.
Non-interest income remains a key revenue driver
At group level, non-interest income increased 6% to R21.43-billion, accounting for 36% of total revenue.
Net fee and commission income remained the largest contributor, growing 3% and representing 63% of total non-interest income. Fee and commission revenue rose 5%, helped by increased transactional activity, higher commissions and a 4% increase in merchant income.
However, rising costs weighed on performance. Fee and commission expenses increased 17%, driven mainly by higher clearing and banking charges.
Net trading income, excluding hedge-accounting impacts, rose 4% to R5.34-billion. Global Markets South Africa delivered an 8% increase, while Global Markets Africa Regions recorded a slight 1% decline.
Digital banking shift accelerates branch closures
The results also underline the rapid shift in customer behaviour towards digital banking.
Absa closed 79 traditional branches and reduced its ATM network by 120 machines during the period. Traditional branches declined 18% to 359, while the ATM footprint contracted 2% to
4 976.
According to the bank, falling branch cash transaction volumes reflect ongoing changes in how customers engage with banking services.
“Maintaining high-quality service across digital and physical channels, while delivering simple and intuitive banking solutions, remains an important component of the customer value proposition,” the bank said.
Absa noted that its Customer Experience Index improved to 114 from 111 a year earlier, reflecting progress in delivering a more seamless customer experience.
Mixed outlook for insurance division
While Absa’s insurance business continued to generate growth at group level, the segment is showing signs of uneven momentum.
The sharp decline in the Africa Regions business, coupled with weaker earnings from South Africa’s non-life insurance operations, suggests the insurance division is not keeping pace with some of the bank’s stronger-performing businesses.
For now, growth in South Africa is helping to cushion the impact of the regional restructuring, but the performance gap highlights the challenge of rebuilding insurance earnings while reshaping the group’s African operations.
- Absa Group’s net insurance income rose by 8% in H1 2026, primarily due to growth in South Africa, while insurance income from its African operations dropped by 70%.
- The decline in Africa Regions insurance income followed strategic disposals of Absa Life Botswana, Absa Life Zambia, and Global Alliance Mozambique completed in H1 2025.
- Insurance headline earnings in South Africa’s Personal and Private Banking division fell 2% to R505 million, with non-life insurance earnings declining 15% due to weaker investment returns.
- Non-interest income at group level increased 6% to R21.43 billion, with net fee and commission income growing 3%, but fee and commission expenses rose 17%.
- Absa closed 79 branches and 120 ATMs in the period, reflecting a shift towards digital banking and a decline in branch cash transactions.
