Gulf African Bank records 40 per cent jump in profits

By Steve Umidha

Gulf African Bank (GAB) has reported a 40 percent profit after tax of Sh 138,413 million for the period ended March 2021, attributed to the lender’s aggressive digital strategy employed during the Coronavirus pandemic period.

The bank’s profits stood at Sh 98,892 million in a similar period last year, in a period that also saw the bank register an impressive 5 per cent growth in total assets to hit Sh 36, 396,267 billion during the period under review compared to Sh34, 764, 839 billion it announced in a similar period last year.

Speaking while releasing the results, GAB’s Chief executive Abdalla Abdulkhalik said that the bank was on course with plans to transform into a fully-fledged bank as it seeks to tap into opportunities within the digital space.

“This quarter’s results have been better than expected given the current operating environment that is characterized by economic difficulties brought about by the pandemic. This quarter’s results have been better than expected given the current operating environment that is characterized by economic difficulties brought about by the pandemic,” said Abdalla Abdulkhalik.

The bank disbursed Sh20, 889,162 billion from the Sh 20,698,572 billion during the period ended December 2020.

Further Mr. Abdulkhalik expects the bank’s earnings to continue on the same trajectory into 2021 by a substantial increase in core deposits and increased lending to businesses recovering from the impact of the pandemic – with hopes hinged on the removal of restrictions.

GAB’s steady growth since Kenya licensed its first Sharia’h compliant bank, comes amid continued concerns over the ‘silent evolution’ in the sub sector over the last decade despite continuing pledges by the Central Bank of Kenya and Muslim scholars to grow the sector.

So far plans to come up with a guiding industry framework, a sovereign Sukuk insurance and financial education on Sharia’h finance have remain just a wishful thinking.

The Islamic finance industry in Kenya remains largely untapped, despite the desire to turn Kenya into an Islamic finance hub for the East African region, compared to the global industry which reached an overall total value of USD 2.4 trillion at the end of 2017, and the market is expected to grow to USD 3.2 trillion by 2020.

In 2016, the International Monetary Fund found that African countries accounted for only 1 per cent of global Islamic finance assets, while The Economist’s Intelligence Unit report, Islamic banking represented only 2 per cent of Kenya’s total banking assets.