Absa nine-month profit up 19pc to Sh14.8 billion

Absa Bank Kenya managing director Abdi Mohamed speaks during a past breakfast roundtable event. 

Photo credit: File | Nation Media Group

Absa Bank Kenya net profit grew 19.8 percent to Sh14.75 billion in the nine months ended September 2024 as interest and non-interest income rose.

The growth in net profit from Sh12.31 billion was helped by a 17.7 percent rise in interest income to Sh34.53 billion, partly on the back of increased interest rates, even as the loan book shrank to Sh311.5 billion from Sh330.9 billion.

Non-interest income rose by 13 percent to Sh12.2 billion, helped by increased fees and commissions on loans as well as a growth in foreign exchange trading income.

At Sh14.75 billion in nine months, Absa was Sh1.65 billion shy of matching the Sh16.4 billion net profit it posted in the financial ended December 2023, moving it closer to joining the club of banks posting at least Sh20 billion in annual profit. 

“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 micro-insurance,” said Abdi Mohamed, managing director at Absa Bank Kenya.

“This strong outcome demonstrates the effectiveness of the bank’s growth strategy and its dedication to providing both financial and non-financial solutions that address the diverse needs of individuals, businesses, and communities.”

Among the top banks that have so far published their results, Absa’s pace of growth in net profit is the fastest. That of Equity Group grew by 13.6 percent to Sh39.3 billion while that of Co-operative Bank of Kenya grew at 4.4 percent to Sh19.2 billion. KCB Group is expected to publish its results on Wednesday.

During the review period, Absa's operating expenses rose 15.2 percent to Sh25.7 billion from Sh22.3 billion, driven by increased provisioning for loan defaults and paying staff.

Loan loss provisions rose 18.7 percent to Sh8.03 billion while staff costs went up by 14 percent to Sh9.8 billion, contributing to the rise in operating costs.

Gross non-performing loans rose to Sh42.67 billion from Sh34.55 billion, pointing to the persisting loan defaults in the banking sector.

The lender mid-last month paid an interim dividend of Sh0.20 per share to its shareholders after half-year profits jumped by 28.9 percent to Sh10.7 billion. The nine-month performance raises prospects of a higher total dividend early next year.

“As we look ahead, we are confident that with prudent management, we can leverage these opportunities and continue to support our customers’ and other stakeholders’ ambitions, consequently driving our own growth,” said Mr Mohamed.

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