Pan-African bank ABSA raised its information technology (IT) spending to 25% of group expenses for the fiscal year ending December 31, 2023, in response to the growing threat of information security.
ABSA Reportedly Revealed IT Expenses
In announcing its year-end performance today, ABSA revealed that IT expenses had increased to R6 028 million (9% constant currency (CCY) 8%).
The primary reason for this increase was the organization’s ongoing investment in new digital capabilities, which led to higher costs for software licenses and maintenance as well as increased spending on cyber security.
Offering retail, business, corporate, and investment banking along with insurance, financial services, and wealth management products and services, the bank has its headquarters in South Africa.
Representative Offices in Namibia and Nigeria
With representative offices in Namibia and Nigeria, it operates in twelve African countries and holds majority holdings in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda, and Zambia.
The Audit and Compliance Committee of the bank noted that information, cyber, and technology risks grew throughout the company over the year.
“During the year, the committee continued to receive reports on the risks and related controls in respect of operational, fraud, cyber security, IT systems, and controls impacting financial reporting,” it said.
“It has also considered, in conjunction with the Information Technology Committee, updates on key internal and external audit findings in relation to the IT control environment, including the progress made in strengthening related controls and enhancing associated processes to reduce the residual risk.”
Group’s Financial Performance
Regarding the group’s financial performance throughout its African regions, headline earnings shot up 124% to R6 250 million. Revenue jumped 26%, or 25% in CCY, to R14 519m, while pre-provision profit increased 37% to the same amount.
With a 14% increase in customer loans and increased margins due to higher policy rates in most countries, R30 731 million saw a 30% increase in net interest income and a 30% increase in CCY.
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