Absa, one of South Africa’s biggest banking groups, is moving more customers onto digital banking, but its latest results reveal a contradiction at the heart of its technology strategy: adoption is rising, while the cost of running the business is not falling.
Digitally active customers grew 14%, but the cost-to-income ratio edged up as technology costs hit R8.78 billion ($538.7 million), alongside a further R200 million ($12.3 million) impairment on software assets.
The numbers suggest African banks may be swapping the costs of physical infrastructure for an expensive technology stack. While apps can reduce the cost of serving individual customers, banks still have to fund the software, cloud infrastructure, cybersecurity, data systems and technical talent required to keep those platforms running.
Absa says it serves more than 13.4 million customers across its pan-African operations. But that growth is happening alongside a substantial technology bill.
“Total IT spend, including staff, amortisation and depreciation, increased 7% to R8.8 billion, ” the Group said in its interim results.
That spending represented about 28% of Absa’s R31.4 billion ($1.9 billion) operating expense base in the first half of 2026. Absa impaired another R200 million ($12.3 million) in software assets during the six months ended June, after a R2.4 billion ($147.2 million) write-down in 2025.
“The Group impaired certain software assets for which the value in use is determined to be zero, mainly derived from head office,” Absa explained in its results.
Absa is not cutting its investment in tech, but spending more while recognising that some of its existing systems no longer have economic value. The bank also says the latest write-downs need to be understood against changes in its operations and investments.