Bank of Africa (BoA) Kenya has reported a 53.7 percent drop in its net profit for the six months ended March 2025, owing to a decline in its forex income.
The bank posted a net profit of Sh62.7 million, down from Sh135.5 million in a similar period the previous year.
The drop followed a shrinking in its forex income to Sh150 million from Sh401 million a year earlier, at a time when the shilling volatility allowed for trading margins.
The bank, with thin capital headroom, cut its interest and operating expenses by more than Sh400 million to remain profitable.
BoA Kenya reduced its operating costs by 13.8 percent to Sh1.2 billion from Sh1.4 billion. The reduction included a 7.7 percent cut in staff cost, which the lender attributed to natural attrition.
“BoA Kenya has, over the years, been improving its operations and processes. This is bearing fruit through reduced staff costs over the year and a drop in operating expenses of nine percent, excluding cost of risk,” said the bank in email responses to Business Daily.
The bank’s cost of funds shrank 16.5 percent to Sh1.2 billion following a reduction of borrowed funds. Customer deposits rose six percent to Sh33.5 billion while its loan book remained flat at Sh18.7 billion.
BoA Kenya's core capital to total deposit liabilities ratio stood at 8.2 percent, 0.2 percentage points above the statutory required eight percent.
Its core capital to total risk-weighted assets was 11.4 percent, giving it a 0.9 percentage point headroom.
The thin margins follow accumulated losses of Sh4.6 billion, held since 2019, eating into their core capital position.
Management of the bank was confident its shareholders would back it with capital if called upon.
“The Bank is currently optimising its capital, which remains sufficient for its current operations and regulatory levels,” said the bank.
“BoA Kenya is part of a larger Pan-African banking Group with 18 Banking subsidiaries in Africa, and also operating in Europe, China, and Canada. The BoA Group is committed to offering any support BOA K may need to meet regulatory capital requirements should there be a need,” it added.
