July 18, 2024

Factors Behind the Surge In Absa Bank Share Price


Absa Bank Kenya experienced a notable surge of 9.3% in its share price from January 31, 2024, to February 29, 2024.

This was a significant improvement from the 6.6% increase observed in Q3 2022 for the bank listed on the Nairobi Securities Exchange PLC.

A pivotal factor contributing to Absa Bank’s share price surge is its enhanced management and earning quality.

In Q3 2023, Absa Bank Kenya emerged as the most traded stock on the Nairobi Securities Exchange (NSE).

This achievement was primarily driven by robust franchise strength and intrinsic value score, attributable to enhancements in the bank’s management quality and earning quality.

The return on average equity saw a notable increase by 2.5% points to 25.8% in Q3 2023, compared to 23.2% recorded in Q3 2022. 

Moreover, the cost to income ratio, excluding LLPs, witnessed a decline of 1.0% points to 38.7% in Q3 2023 from 39.7% in Q3 2022.

Additionally, Absa’s Net Interest Margin demonstrated a significant improvement, rising by 1.3% points to 8.8% in Q3 2023 from 7.6% in Q3 2022.

Absa Bank Kenya’s strong financial fundamentals played a crucial role in bolstering investor confidence and driving the surge in share price. As of November 2023, the bank boasted robust capital and liquidity ratios, surpassing regulatory requirements. 

With a total capital adequacy ratio of 17.7% and a liquidity reserve position of 29.8%, absa bank kenya showcased its resilience and ability to navigate challenging market conditions.

Furthermore, the bank’s impressive post-tax profits growth of 32% year-on-year in 2023, coupled with a return-on-equity of 26%, highlighted its profitability and value proposition to investors.

READ ALSO: Banks Experience Surge in Loans For Daily needs and a Decline in Capital Expenditures

Absa Bank Kenya’s strategic initiatives for 2024 played a pivotal role in driving investor interest and confidence in the bank’s future prospects.

These initiatives include ecosystem banking, infrastructure projects financing, inclusive growth promotion, and the ReadytoWork program. 

By aligning its business objectives with broader socio-economic goals, absa bank kenya positioned itself as a catalyst for positive change. This  resonated with socially conscious investors seeking impactful investment opportunities.

As a pan-African bank with a local presence in 10 countries across the continent, absa bank kenya leveraged its market leadership and extensive regional footprint to consolidate its position in the financial services sector. 

The bank’s highly-ranked and experienced Trading & Sales team, coupled with its reputation for delivering exceptional service and product expertise, further reinforced investor confidence.

Despite the notable surge in share price, absa bank kenya faces several challenges that warrant careful consideration. One notable challenge was the threat of fraud.

This was highlighted in 2023, where Absa Bank lost KSh 107.7 million to fraud, and reported 34,772 computer-based fraud cases.

Absa Bank Kenya, committed to providing convenient banking solutions, offers various services to cater to the diverse needs of its customers.

From facilitating easy transactions through its absa paybill number (303030) to ensuring round-the-clock assistance via absa customer care, the bank prioritizes customer satisfaction. 

With multiple absa bank ussd codes such as *224# for Hello Money and *229# for CashSend, absa bank kenya empowers customers to manage their finances conveniently on their mobile phones. 

Moreover, the bank’s mobile banking services enable seamless money transfers and access to essential banking features anytime, anywhere.

With the absa mobile app and online banking platforms, customers can enjoy the flexibility of managing their accounts and conducting transactions remotely. 

Customers can contact absa bank kenya customer care at +254 (20) 3900000 for any inquiries or assistance. The absa bank identifier code (BIC) is ABSAZAJJ, and its branch code is 632005 for electronic funds transfer (EFT) payments. The absa bank swift code is also ABSAZAJJ.