Absa Kenya reports 846% jump in half year profit to US$51m

KENYAAbsa Bank Kenya has reported sharp jump in net profit for the first half of the year ended 30th June 2021 outperforming its peers to post 846% growth in Profit After Tax to Kshs 5.6 billion (US$51 million) compared to Kshs 600 million in the same in 2020.

The impressive performance was mainly driven by growth in interest income particularly in the small and medium enterprises segment as the Bank accelerated its efforts in supporting businesses to recover from the effects of the pandemic and reposition for growth.

Absa Bank Kenya’s total income grew by 6% to Kshs 17.8 billion (US$162 million) mainly driven by the growth of net interest income, which was up 6% year on year on the back of increased lending.

Customer assets increased by 8% to Kshs 219 billion (US$2 billion) with total assets at Kshs 398 billion (US$3.6 billion).

The 6% growth in customer deposits was attributed to transactional accounts which contributed 68% of the total deposits.

Absa Kenya CEO and Managing Director Jeremy Awori noted that the strong performance reflects an improving macro-economic environment, better quality of credit and resilience of the country’s economy.

The bank said it had offered loan relief and restructures totaling over Kshs 62 billion (US$565 million) to about 60,000 customers, equivalent to 30% of its loan portfolio with Kshs 103 billion (US$938 million) in gross lending during that period.

Non- funded income driven by the bank’s new innovations and digitization rose by 6% and costs were well managed, dropping by 3% year on year.

“The bank recently introduced WhatsApp banking as part of its commitment to invest over US$14.6 million in technology and innovation this year towards enhancing customer experience”

Net customer loans grew by 8% to close at Kshs 219 billion (US$2 billion) driven by key focus products; general lending, trade loans, mortgage and scheme loans that recorded strong growth year on year.

The bank’s return on equity increased to 22%, supported by the strong growth in profits, improved efficiency, and well managed capital.

In the period under review, the bank continued executing its growth strategy with introduction of some new exciting propositions including the Absa Asset Management Limited, Absa SHE Business account, digital loan top ups where customers can top up existing loans at the touch of a button.

More recently, the bank also recently introduced WhatsApp banking as part of its commitment to invest over Kshs1.6 billion (US$14.6 million) in technology and innovation this year towards enhancing customer experience.

Customers can now transact via WhatsApp including account-to Mpesa/Airtel Money transfers, inter-account transfers, bill payments and balance enquiry, among others.

Other new digital solutions introduced by Absa recently include digital loan top ups, debit card management and the business banking App.

 

 

 

 

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