Absa Bank Kenya PLC has today reported a Profit after Tax of Ksh10.9 billion, a growth of 161% compared to a similar period the previous year.
The strong performance was driven by growth in interest income as the Bank stepped up efforts to support businesses recover from the negative effects of the Covid-19 pandemic and reposition for growth, particularly in the Small and Medium Enterprises segment.
The Bank reported that all its business units remained profitable, registering growth on key lines. Total income increased by 7% to Kshs.36.9 billion, primarily due to higher interest income, which increased by 8% year on year as a result of increased lending. This was however partially offset by margin compression occasioned by drops in the Central Bank Rate (CBR) whose benefits the bank continued to pass to customers as a responsible lender.
Read: Longhorn Recovers From Ksh145 Million Loss To Post Ksh15 Million Profit
Non-funded income grew by 5% driven by new innovations and continued digitization. Total Assets increased by 13% to Kshs.429 billion in the period with growth driven by customer lending such as general lending, trade loans, mortgages and scheme. Customer deposits increased by 6% to Kshs.269 billion.
Announcing the results, Absa Kenya Managing Director, Jeremy Awori, said the Bank’s strong performance is a reflection of customers’ resilience in a challenging environment and points to improving macro-economic conditions.
“We have drawn inspiration from the resilience of our customers and are committed to continue providing them with the financial solutions they need to pursue their growth ambitions. We are also pleased to resume dividend payment to our shareholders demonstrating the strength and resilience of our business. The Board has recommended a dividend pay-out of Kshs.6 billion for the year in review,” Mr Awori said.
Read:Family Group Commits Ksh40 Million To Help Needy Students
The Bank’s investment in new businesses is bearing fruit with Timiza, Bancassurance, Asset Management, among others, contributing to growth in the year under review. We significantly increased lending and business support to women entrepreneurs under our Women in Business proposition. The Bank also continued investing in digitalisation and
automation to improve customer experience.
“In the recent past, we have invested over Kshs.5 billion in different platforms and capabilities, including the launch of our first-in-market WhatsApp banking proposition, upgrade of our Timiza platform and improvement of our Absa Mobile app with new features,” Mr Awori said.
Impairment decreased by 48% compared to similar period last year reflecting an improving macroeconomic environment for our business and our customers. The Bank’s average loan loss ratio reduced to 2.0% demonstrating the prudence of our lending decisions.
The Bank’s capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement. The Bank total capital adequacy ratio closed the year at 17.5% and liquidity reserve position at 39.7% against the regulatory limits of 14.5% and 20% respectively.
Read: Stanbic Bank On Bullish Mode As It Records 39PC Profit Jump
