Absa Bank Kenya posted Ksh 10.7 billion in profits after tax during H1 2024, reflecting a 28.9 percent increase compared to Ksh 8.3 billion in the same period of the previous year. This comes despite the difficult economic conditions experienced during the first half of 2024, which were characterized by a weakening shilling, nationwide floods, and protests by Gen Z.
“This commendable outcome, realized amidst a dynamic macroeconomic environment, reflects prudence in strategy execution and the resilience of our customers. It is a further demonstration of our unwavering dedication to providing relevant financial solutions that address the diverse needs of individuals, enterprises, and communities because we want to continue being a critical enabler to their growth stories,” said Abdi Mohamed, Absa Bank Kenya Managing Director & CEO.
The bank saw its net interest income grow by 19.7 percent to Ksh 23.0 billion from Ksh 19.2 billion in H1 2023, while non-interest income saw a moderate rise of 8.4 percent, amounting to Ksh 8.8 billion.
Absa Bank’s total revenue for the period increased by 16.3 percent, reaching Ksh 31.8 billion, up from Ksh 27.4 billion in H1 2023. This robust revenue growth was accompanied by a slight enhancement in the bank’s cost-to-income ratio, which improved to 35.8 percent from 37 percent in the previous year. Additionally, customer deposits grew by 6.2 percent to Ksh 353.3 billion, compared to Ksh 332.6 billion in the prior year.
However, the bank’s loan book saw a slight contraction, with customer loans decreasing by 0.5 percent to Ksh 316.4 billion. The bank’s gross non-performing loans (NPLs) rose to Ksh 39.4 billion. Despite this rise, the bank kept its loan loss provisions steady at Ksh 5.2 billion, the same as the previous year.
Absa Bank’s interest expenses surged to Ksh 9.6 billion, a Ksh 3.6 billion increase from the Ksh 6 billion recorded during the same period in 2023. As a result, the bank’s total operating expenses increased by 8.3 percent to Ksh 16.6 billion.
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Absa Bank’s total assets fell by 4.4 percent to Ksh 481.4 billion, down from Ksh 503.7 billion in H1 2023. Additionally, the bank’s cost-to-income ratio improved to 35.8 percent from 37 percent in the previous year.
Importantly, Absa Kenya’s shareholders’ equity increased by 14.6 percent to Ksh 73.0 billion from Ksh 63.7 billion.
“Our strong performance on profitability and capital position allows for capital distribution. In line with our commitment to delivering value to our shareholders, the Board has approved a payment of an interim dividend of Ksh 0.2 per share, which is consistent with our overall strategy to provide attractive returns to our shareholders,” stated Yusuf Omari, Absa Bank Kenya Chief Finance Officer.
The Absa Bank Kenya dividend will be distributed on or about Tuesday, 15 October 2024, to shareholders registered by the close of business on Friday, 20 September 2024.