As information security continues to grow, pan-African bank ABSA increased its information technology (IT) expenses to 25% of group expenses for the financial year ending December 31, 2023.

ABSA published its year-end performance today, stating that IT expenses climbed by 9% constant currency (CCY) 8%) to R6 028 million, owing mostly to continued investment in new digital capabilities, which resulted in higher software licence and maintenance costs, as well as increased cyber security spending.

The bank, headquartered in South Africa, offers retail, business, corporate, investment banking, insurance, financial services, and wealth management products and services.

It operates in 12 African nations, and has majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda, and Zambia, with representative offices in Namibia and Nigeria.

The bank’s Audit and Compliance Committee observed that technological, cyber, and information security hazards increased across the business in the year.

It said: “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 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.”

In terms of financial performance for the group across its African markets outside South Africa, headline earnings increased 124% to R6 250m.

Pre-provision profit grew 37% to R14 519m, as revenue increased 26%, or 25% in CCY, to

R30 731m, while net interest income grew 30%, and 30% in CCY, with 14% customer loan growth and improved margins, given higher policy rates in most countries.