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Absa Group's separation from UK-based Barclays has been progressing well, Jason Quinn, Absa Group Financial Director said.
Quinn, on Monday, was speaking at the annual financial results announcement for Absa's financial year ended December 31, 2018.
The banking group's headline earnings rose 3% to R16.1bn over the period. Revenue grew by 4% to R65.5bn and dividends increased 4% to R11.10 per share.
Absa's share, which opened at R169 on Monday morning, rose as high as R171.47 shortly after the results release. By 10:35 the share was trading lower at R168.63.
"The separation process has been a catalyst for a significant strategic and cultural reset of our organisation. Separation is progressing well," Quinn said.
Since Absa announced its separation from Barclays in 2017, the bank has split 198 of the services from Barclays into 266 projects, Quinn said.
By the end of 2018, a total of 103 services contracted with Barclays had been terminated, and Absa had delivered 140 projects.
Resources being supported by Barclays technology centre in India have been successfully transferred to third parties. Absa is looking to localise resources from India to SA over five years and half of these resources are intended to be localised by 2021, Quinn said.
"As with any programme of this size there has been slippage in some projects but we have worked hard to get back on track," Quinn said.
One of the most significant technical projects will see thee migration of core banking operations for regional operating entities from the UK to SA, this will be done by the first half.
Absa will also continue rebranding Barclays subsidiaries to Absa by June 2020, products and services will not be affected by the name change, Quinn assured.
Barclays has contributed £765m or R12.6bn to Absa for the group to take steps of separation. So far Absa has spent R7.6bn on separation execution and R1.5bn on transitional service agreement costs - which includes technology, brand projects and programme support among other things. A total of R3bn has been spent on platinum projects.
The funds are to be used for rebranding, technology and separation-related projects the results report read. The separation is expected to be capital and cash-flow neutral, Quinn said.
The report made no mention of the search for a permanent CEO, after the group announced Maria Ramos would step down on February 28, 2019. This event is applicable to the 2019 financial year. Absa appointed René van Wyk as acting CEO, Fin24 previously reported.
