Several listed banks released their FY’2025 financial results, including KCB Group Plc, Stanbic Holdings Plc, and Absa Bank Kenya Plc, with the results highlighting mixed performance across profitability and shareholder return metrics. Analysis from the Cytonn Weekly and the respective earnings notes focused on trends in profit after tax (PAT), dividend per share (DPS), dividend yields, and dividend payout ratios, which remain key indicators of shareholder value creation.
In terms of profitability, KCB Group Plc recorded strong earnings growth, with profit after tax increasing by 10.6% to Kshs 68.4 bn from Kshs 61.8 bn in FY’2024, largely supported by growth in net interest income following a decline in funding costs and improved interest margins. In contrast, Stanbic Holdings Plc recorded relatively flat profitability, with PAT remaining largely unchanged at Kshs 13.7 bn. Meanwhile, Absa Bank Kenya Plc recorded a decline in profitability, with PAT decreasing by 2.6% to Kshs 17.0 bn from Kshs 17.5 bn in FY’2024.
In terms of shareholder returns, the banks maintained strong dividend distributions. KCB Group Plc declared a total dividend per share of Kshs 7.0, translating to a dividend yield of approximately 8.9% and a dividend payout ratio of about 32.9%, reflecting improved profitability and a commitment to rewarding shareholders. Stanbic Holdings Plc declared a dividend per share of Kshs 22.4, and translating to a dividend yield of approximately 8.6% and a dividend payout ratio of about 64.4. Absa Bank Kenya Plc declared a total dividend of Kshs 2.05 per share, translating to a dividend yield of approximately 6.8% and a payout ratio of about 48.6%.
The bank’s Asset Quality improved, with Gross NPL ratio decreasing to 16.2% in FY’2025, from 19.8% in FY’2024, attributable to an 15.0% increase in gross loans to Kshs 1,308.3 bn, from Kshs 1,137.2 bn recorded in FY ‘2024 for KCB. Similarly, the bank’s Asset Quality improved, NPL ratio decreasing to 8.1% in FY’2025, from 9.1% in FY’2024, attributable to an 2.9% increase in Gross non-performing loans to Kshs 23.3 bn, from Kshs 22.6 bn in FY’2024 for Stanbic. Additionally, the bank’s Asset Quality improved, with Gross NPL ratio decreasing to 11.5% in FY’2025, from 12.6% in FY’2024, attributable to a 8.4% decrease in Gross non-performing loans to Kshs 38.9 bn, from Kshs 42.5 bn in FY’2024 for Absa.
Overall, the results highlight a resilient banking sector that continues to generate strong shareholder returns. The performance across the banks was largely driven by factors such as changes in the interest rate environment affecting lending margins, improved cost management, declining credit impairment charges in some institutions, and strong capital positions that have enabled banks to sustain attractive dividend payouts despite prevailing macroeconomic pressures and evolving regulatory conditions in the sector
