Absa Bank first quarter net profit up 24 per cent to Sh2.4 billion
Absa Bank Kenya has posted a 24 per cent increase in this year’s first quarter earnings with net profit rising to KES2.4 billion from a flat KES2 billion during a similar period 2020.
The lender attributed the improved performance to growth in interest income in the small and medium enterprises segment as the bank continued supporting businesses to recover from the pandemic.
“In confronting the challenges posed by the COVID-19 pandemic, we have been greatly inspired by the ingenuity and undying determination espoused by our fellow Kenyans to rise above the storm and keep going,” said Jeremy Awori, Managing Director, Absa Bank Kenya.
Loan and advances went up by 8 per cent year-on-year to close at KES218 billion riding on rising uptake of trade loans, mortgages as well as scheme financing agreements.
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The bank’s net interest income also went up by 5.9 per cent to KES5.96 billion in the three months to March from KES5.6 billion in the corresponding quarter last year.
The lender, however, recorded muted growth in overhead costs with total operating expenses rising by 3.8 per cent to KES5.4 billion as the bank cools down on loan-loss provisioning.
Absa’s stock of gross non-performing loans remained unchanged in the period at KES17.3 billion.
In the quarter marked by a tough operating environment as businesses and individuals grappled with Covid-19 economic fallout, Absa saw loan loss provisioning surge by 25 per cent to KES1.4 billion from KES1.1 billion by March 2020.
At the same time, the bank’s total interest expense contracted by nearly 18 per cent to KES1.6 billion from KES2 billion recorded in the corresponding quarter, last year.
In the three months to March, however, the lender’s total operating expense decreased by one per cent year-on-year to close at KES4 billion.
In the period, customer deposits grew by 8 per cent to KES257 billion with transactional accounts making up 66 of the total inflow.
The bank, which saw total assets rise to KES384 billion, cut its total interest expenses in the period to KES1.6 billion from KES2 billion to grow its top line income margin even as non-interest funded income fell flat at KES2.9 billion from KES3 billion in March 2020.