Absa Bank Kenya posts KES8.3 billion in half-year profit

By Monica MUEMA

Absa Bank Kenya PLC has reported net earnings of Kshs.8.3 billion for the half year ended 30 June 2023, a 32% increase over the same period last year, supported by sustained double-digit revenue growth across key revenue streams.

The impressive six-month results were underscored by a sustained quality income mix and a strong and high-quality balance-sheet, with the Bank’s asset base maintaining upward momentum and remaining above the half-trillion mark, rising 13% to Kshs.504 billion.

As the Bank accelerated the execution of its new strategy anchored on supporting individuals and sectors driving Kenya’s economic growth and recovery, including Small and Medium Enterprises (SMEs), loans and advances increased by 22% to Kshs.318 billion during the period.

Revenue increased by 31% to Kshs.27.4 billion, boosted by a 33% rise in net interest income to KShs.19.2 billion. At the same time, non-funded income increased by 26% to Kshs.8.1 billion, owing to positive outcomes from the ongoing revenue diversification.

Specifically, the Bank registered strong growth in FX income, fees and commissions, Asset Management, Bancassurance and stock brokerage, among others. Customer deposits increased by 18% in the six months to Kshs.333 billion, allowing for further balance sheet expansion. Operating expenses for the review period increased by 15% on account of new hires aimed at driving business growth.

While speaking during an investor and media briefing session on the financial results, Absa Bank Kenya PLC Managing Director, Abdi Mohamed, said the performance is a clear testament to the resilience and tenacity of Kenyans and the Bank’s commitment to helping customers achieve their growth ambitions in an unpredictable business environment.

“Absa is at a critical point of a transformative era, with our new strategy presenting an all-round approach towards delivering enhanced social and economic transformation in the societies in which we operate.

In the face of a complex business environment, we are proud of the role we continue to play as an active force for good for our customers and the economy by ensuring continued access to finance, as evidenced by the growing balance sheet in the period under review,” Mr Mohamed said.

Following the improved performance, the Board has approved an interim dividend payment of Kshs.0.20 per share, equivalent to a total payout of Kshs.1.086 billion, for the six-month period.

The period under review also saw the Bank accelerate its innovation agenda with the launch of new propositions such as Mobi-Tap, a first-in-market payment solution that allows small businesses to accept speedy and safe card-based payments through a mobile phone.