Fitch affirms Absa Bank at ‘BB’; outlook stable

Fitch Ratings has affirmed Absa Group Limited’s (ABG) and Absa Bank Limited’s (ABL) Long-Term Issuer Default Ratings (IDRs) at ‘BB’. Fitch has also affirmed ABG’s and ABL’s Viability Ratings (VR) at ‘bb’ and National Long-Term Ratings at ‘AAA (zaf)’. The outlooks on the Long-Term IDRs and National Long-Term Ratings are stable. According to the UK-based firm, the drivers of the ratings are ABL standalone creditworthiness, as expressed by their ‘bb’ VRs.

“The VRs reflect a large franchise, strong revenue diversification, healthy profitability, good capital buffers and a stable funding profile. The VRs are constrained by the concentration of the issuers’ operations in South Africa and high sovereign-related exposure relative to capital (end-1H26: 235% of ABL’s equity). The Stable Outlooks mirror that on South Africa”.

The National Ratings are the highest attainable on South Africa’s National Rating scale and reflect the entities’ creditworthiness in local currency relative to that of other South African issuers. They are in line with all other rated banks in the country. Fitch said the VR of ABG, a non-operating bank holding company (BHC), is equalised with the group VR, due to low common equity double leverage (end-2025: 106%) and high capital and liquidity fungibility within the group.

ABL’s VR is also equalised with the group VR as it is the main operating entity (end-1H26: 82% of the group’s consolidated assets). Fitch recently revised down its real Gross Domestic Product growth forecast for South Africa by 20 basis points to 1.1% in 2026 due to weaker-than-expected performance in half-year 2026, particularly higher imports and lower investment, and despite reforms in the electricity and logistics sectors.

Strong Franchise According to Fitch, Absa Bank Group has a strong domestic franchise through ABL, which represented 20% of South African banking system assets at the end of half-year 2026. Absa Bank Group has subsidiaries in nine other sub-Saharan African countries, which represented 18% of total assets at the end of half-year 2026, providing some geographical diversification.

The bank’s revenue diversification is also strong.