- Absa Bank Kenya’s profits grew to Ksh 14.7 billion, continuing a five-year growth streak that began in 2020.
- Total assets recorded a drop for the first time since 2015.
- Gross non-performing loans have been rising since 2019.
Absa Bank Kenya PLC has reported a net profit of Ksh 14.7 billion for the third quarter ending September 30, 2024, reflecting a 20% increase compared to the same period last year. This strong performance has been attributed to the Bank’s focus on innovation, customer-centric solutions, and financial inclusion, which fueled a 16% growth in total revenues to Ksh 46.8 billion.
The Bank’s revenue was boosted by a 16% increase in funded income, which stood at Ksh 34.5 billion, alongside a 13% rise in non-funded income, totaling Ksh 12.2 billion. Both traditional revenue streams and newer ventures, such as asset management and brokerage services, further contributed to this growth.
Speaking on the financial results, Abdi Mohamed, Managing Director and CEO of Absa Bank Kenya, expressed confidence in the Bank’s disciplined execution of its strategic priorities.
“The Bank’s strategic objective remains firmly on track toward becoming a holistic, modern financial services provider, meeting the evolving needs of our customers through innovation and strategic partnerships.” he said.
During the period, the Absa Bank’s loans and advances rose to Ksh 311 billion, supported by new gross lending of Ksh 94 billion, which was channeled into critical sectors of the economy. However, gross non-performing loans (NPLs) increased to Ksh 42.67 billion, up from Ksh 34.55 billion in the same period last year.
Total customer deposits recorded a slight decrease, falling from Ksh 354.31 billion in Q3 2023 to Ksh 351.8 billion in Q3 2024. Similarly, total assets declined to Ksh 484.35 billion from Ksh 504.92 billion in the same period last year. The cost-to-income ratio improved to 37.8%, while Return on equity also increased to 25.4%. However, operating expenses climbed by 13.7% to Ksh 25.7 billion.
Despite a 19% rise in impairment charges to Ksh 8.0 billion, Absa Bank has maintained a healthy portfolio quality with sufficient coverage to mitigate potential credit losses. Additionally, its liquidity and capital adequacy ratios remain strong at 38.1% and 19.4%, respectively, well above the regulatory requirements of 20% and 14.5%.
Read: Absa Kenya Foundation: Fostering Positive Change Through Four Pillars
Absa Bank agency network grew from 600 to over 3,000 locations in the review period, improving accessibility for customers across the country. Absa bank also advanced its Ksh 3 billion technology upgrade strategy, strengthening core banking systems and back-office operations.
Absa bank also enhanced its Shariah-compliant La-Riba service and expanded the Wezesha Stock platform designed for small and medium enterprises (SMEs).
“We continue to diversify our revenue sources by enhancing payment solutions, improving customer experiences, and promoting financial inclusion through digital finance, affordable housing, and SME-oriented products such as Wezesha and Microinsurance.” noted Mr. Mohamed.
Absa bank’s non-financial initiatives also had a significant impact, with over 14,000 entrepreneurs benefiting from Absa’s support in navigating the current economic landscape.
Moreover, Absa bank launched the Absa Kenya Foundation (AKF) during the quarter. The Foundation is focused on four key areas: enterprise development, education and skills, natural resource management, and health and humanitarian relief.