Absa Bank Kenya has increased its dividend payout by 17.1 percent to Sh2.05 per share amounting to Sh11.1 billion on the back of a 10 percent rise in net profit for the full year to December to Sh22.9 billion.
The lender announced that its board had recommended a final dividend of Sh1.85 per share bringing the total payout to Sh2.05 when added to the interim payout of Sh0.20.
The latest payout represents a rise from Sh1.75 per share, amounting to Sh9.5 billion paid a year earlier when net profit was Sh20.87 billion.
Absa is the first lender to release full year financials in a period when banks are expected to report higher dividend payout, following a 20 percent growth in industry earnings.
“The Board of Directors has approved a final dividend of Sh1.85 per ordinary share, to be paid on or about May 19, 2026 to shareholders on record as of April 30, 2026. In addition to the interim dividend of Sh0.20, this brings the total dividend for the year to Sh2.05 per share which is a 17 percent increase from the previous year.” said the bank’s Chief Executive Abdi Mohammed.
The increase in profits during the period was driven by a 12.2 percent reduction in operating expenses including loan loss provisions and software costs.
Absa spent Sh28.6 billion last year to keep its operations running down from Sh32.6 billion in 2024 a move that covered for decline in revenue in the bank’s core business of lending.
The bank’s loan book grew marginally, by 1 percent, to Sh312.1 billion up from Sh309 billion with interest income from lending declining to Sh42.8 billion from Sh53.3 billion.
The decline in interest earned from loans followed a drop in the price of credit as the Central Bank of Kenya aggressively cut its indicative rate to push banks to lower their lending rates.
Investment in government securities, which grew by 17 percent to Sh151.5 billion, earned the bank Sh13.2 billion, helping to partly cover the hole left by the decline in earnings from loans.
“In an operating environment that remains largely complex, our profit after tax grew by 10 percent year-on-year to Sh22.9 billion, supporting sustainable returns on equity of 22.8 percent,” said Mr Mohammed.
“Revenue closed the year at Sh61.4 billion, a 2 percent decline from last year. This decline is attributed to a reduction in interest rates, although it was offset by better cost of funds management,” he added.
Absa Bank slashed its loan loss provisions by 31.8 percent to Sh6.2 billion following improved loan repayments lowering its operating expenses by Sh2.8 billion.
Other operating expenses fell by Sh1.68 billion with management citing increased reliance on system automation and renegotiations with service providers including software costs.
Customer deposits with the bank rose by a percentage point to Sh372.3 billion for which it paid Sh12.3 billion as interest. This was a 31 percent drop from Sh17.9 billion paid out to customers in 2024.
Absa is banking on new business lines such as fees from custodial business and assets management to grow revenues.
Its assets under custody business grew from Sh4 billion last year to Sh70 billion underscoring opportunities in diversification.
