Absa Bank Kenya Reports Ksh 10.7 billion Profit in H1 2024

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Absa Bank Kenya recorded a profit after tax of Ksh 10.7 billion in H1 2024, marking a 28.9 percent rise from Ksh 8.3 billion recorded in the same period last year.

This was despite a challenging economic environment in the first six months of 2024, coupled with a depreciating shilling, nationwide floods, and protests by Gen Z.

Absa Bank Kenya Reports Ksh 10.7 billion Profits in H1 2024

“This commendable outcome, realized amidst a dynamic macroeconomic environment, reflects prudence in strategy execution and the resilience of our customers,” said Abdi Mohamed, Absa Bank Kenya Managing Director & CEO.

“It is a further demonstration of our unwavering dedication to providing relevant financial solutions that address the diverse needs of individuals, enterprises, and communities because we want to continue being a critical enabler to their growth stories,” Abdi Mohamed added.

The bank’s net interest income surged by 19.7 percent to Ksh 23.0 billion from Ksh 19.2 billion recorded in H1 2023, with non-interest income also experiencing a modest increase of 8.4 percent, reaching Ksh 8.8 billion.

Absa Bank’s total revenue for the period grew by 16.3 percent, rising to Ksh 31.8 billion from Ksh 27.4 billion in H1 2023. This strong revenue performance was accompanied by a slight improvement in the bank’s cost-to-income ratio, which improved to 35.8 percent from 37 percent last year.

Customer deposits increased by 6.2 percent to Ksh 353.3 billion from Ksh 332.6 billion in the previous year. However, the bank’s loan book experienced a slight contraction, with customer loans declining by 0.5 percent to Ksh 316.4 billion.

This was despite a challenging economic environment in the first six months of 2024, coupled with a depreciating shilling, nationwide floods, and protests by Gen Z.

The bank’s gross non-performing loans (NPLs) rose to Ksh39.4 billion. Despite this increase, the bank maintained its loan loss provisions at Ksh 5.2 billion, consistent with the previous year’s figure.

However, interest expense jumped to Ksh 9.6 billion, a Ksh 3.6 billion increase from the Ksh 6 billion recorded in the same period last year. Consequently, Absa’s total operating expenses rose by 8.3 percent to Ksh 16.6 billion.

Read: I&M Group Records Ksh 6.1bn Profit for H1 2024

Absa Bank’s total assets declined by 4.4 percent to Ksh 481.4 billion from Ksh 503.7 billion in H1 2023. Additionally, the bank’s cost-to-income ratio of 35.8 percent, down from 37 percent in H1 2023.

This was despite a challenging economic environment in the first six months of 2024, coupled with a depreciating shilling, nationwide floods, and protests by Gen Z.

Notably, Absa Kenya’s shareholders’ funds grew by 14.6 percent to Ksh 73.0 billion from Ksh 63.7 billion.

“Our strong performance on profitability and capital position allows for capital distribution,” noted Yusuf Omari, Absa Bank Kenya Chief Finance Officer.

“In line with our commitment to delivering value to our shareholders, the Board has approved a payment of an interim dividend of Ksh 0.2 per share, which is consistent with our overall strategy to provide attractive returns to our shareholders.” he added.

The Absa Bank Kenya dividend will be paid on or about Tuesday, 15 October 2024, to shareholders registered as of the close of business on Friday, 20 September 2024.