Why Coronation has added Absa to flagship fund

Fund manager Coronation Asset Management has taken a meaningful position in Absa through one of its flagship portfolios, the Coronation Top 20 Fund. It added the stake in the second quarter of this year (between April and the end of June), making Absa the third banking stock in the fund. Standard Bank Group is its single largest holding (accounting for 10.7% at the end of June), while Nedbank Group comprises 5.5% of the portfolio.

Portfolio managers Neville Chester, Nicholas Stein and Nicholas Hops said it “initiated a position in Absa during the period, as low market expectations combine with a compelling turnaround story within the SA business and continued success in its African assets”. “We have been shareholders in Standard Bank for many years, in large part due to its successful African growth story. Absa are a close second from an African franchise perspective, and while the group contribution is smaller at one third of earnings, it offers an additional leg up to earnings growth in the years to come.” Absa is in the midst of a strategic reset under new CEO Kenny Fihla, who joined the group in 2025 from Standard Bank, where he previously led its Corporate and Investment Bank (CIB) unit, and Coronation says he ran this division with “much acclaim”.

In September 2024, he was appointed deputy CEO of the group and assumed responsibility for its South African unit (SBSA) and its Africa Regions and Offshore businesses. “Since arriving, he has focused the business and brought in new talent to help grow the CIB and African businesses,” says Coronation. Fihla has recruited a sizeable roster of talent, primarily from Standard Bank.

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These include Zaid Moola (CEO of CIB), Sola Adegbesan (managing executive for CIB Africa Regions), Leon Barnard (Pan-African CEO of Business Banking), Clive Potter (managing executive: Client Coverage, CIB), Francisco Khoza (general counsel, Wealth and Investment Management), Musa Motloung (group strategic risk officer) and Avikaar Ramphal (head of strategic risk). Sitoyo Lopokoiyit was recruited from Safaricom (where he ran M-Pesa) and started as the CEO of Personal and Private Banking (PPB) in April. The group tempered growth expectations for 2026 in a trading update in June, forecasting low- to mid-single-digit revenue growth. Its return on equity target for the year was lowered to 15% (from 16% to 17% previously).

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