Absa Bank Kenya Reports Sh6.1 Billion Net Profit for Q1 2025
Read Time:2 Minute, 8 Second
Absa Bank Kenya has reported a net profit of Sh6.1 billion for the first quarter of 2025, representing a 3.6 percent increase from Sh5.9 billion in the same period last year.
The lender’s improved profitability was largely supported by a reduction in key operating costs, including interest expenses, staff costs, and loan loss provisions.
The bank, a subsidiary of South Africa’s Absa Group, posted a 4.2 percent drop in total operating income to Sh15.8 billion during the three months ended March 2025. This decline was attributed to lower interest rates and subdued forex trading activity.
However, cost containment measures enabled the bank to sustain profit growth despite revenue pressure.
Revenue closed the quarter at Sh15.8 billion, a four percent decline year-on-year. This was primarily due to lower interest rates, partially offset by an improved cost of funds.
Read: Absa Bank Kenya Declares Sh1.75 Dividend per Share for FY 2024
Absa’s total assets rose by 4.5 percent to Sh520.2 billion, while shareholders’ funds expanded by 23.4 percent to Sh92.6 billion. The bank maintained a cost-to-income ratio of 35 percent.
The lender’s loan book contracted by 5.5 percent to Sh308 billion, which contributed to a Sh2 billion drop in interest income from customer loans to Sh11.4 billion. Non-performing loans (NPLs) rose to Sh44 billion from Sh38 billion.
Nonetheless, the bank’s NPL ratio stood at 12.3 percent, below the industry average of 17.2 percent.
At the same time, Absa increased its investment in government securities to Sh144 billion, up from Sh85.7 billion a year earlier. This shift supported a Sh1 billion increase in interest income from government lending, which stood at Sh3.1 billion for the quarter.
Read: ABSA Kenya CEO Abdi Mohamed’s Salary Hits Sh109 Million After 39% Pay Rise
Customer deposits grew by 4.8 percent to Sh371 billion. Despite the deposit growth, interest paid to depositors fell by 21.4 percent to Sh3.3 billion.
Foreign exchange trading income dropped 28 percent to Sh1.5 billion, following reduced volatility in the local currency. Analysts pointed to the relatively stable shilling as limiting room for arbitrage opportunities, which previously boosted trading revenues.
Operating expenses were supported by a 41.6 percent cut in loan loss provisions, which declined to Sh1.4 billion from higher levels in the previous year.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0
Average Rating