A double-digit growth across all business segments has seen Absa Kenya declare Kes7.3 billion dividend party after posting Kes14.6 billion net profit, a 34 percent growth, in the period ended December 2022.
The dividend payout of Kes1.35 per share represents a 23 percent increase from the payout reported in December 2021.
Absa Bank Kenya saw an impressive organic revenue growth with a loan to deposit ratio of 93 percent indicating their optimal use of low-cost deposit to push credit to the private sector.
The lender which is in transition having named Abdi Mohamed as the new Ceo as it moves to implement the next strategic horizon from 2023 saw loans and advances to customers increase by 21 percent to Kes284 billion even as deposits rose by 13 percent to Kes304 billion further supporting balance sheet growth.
The lender said their growth was also supported by a well-diversified non-funded income with commissions and forex trading income which grew by Kes2.5 billion.
“We are pleased with this outstanding financial performance, which was achieved in the face of an unprecedented and complex operating environment characterized by significant events such as the General Elections, drought, and persistent Covid-19 pandemic impacts,” Absa Bank Kenya interim managing director Yusuf Omari said:
“This set of results is a clear demonstration of our remarkable success in executing our growth, transformation and returns strategy where we outperformed in all the core measures.”
The lender’s total revenues increased by 25 percent to Kes45.9 billion largely on account of a 28 percent jump in net interest income of Kes32.3 billion.
Absa said increased lending, including to the Small and Medium Sized Enterprises (SMEs) and to key economic sectors such as manufacturing, energy and agriculture in recognition of the critical role they play in the advancement of our economy and job creation paid off during the period.
Non-funded income went up by 17 percent to Kes13.7 billion, with the lender citing strong growth in their asset management business, forex income, bancassurance as well as card operations.
Last year, Absa launched a Digital Onboarding platform – an instant online account opening option – and rolled out of Cash Deposit Machines in key markets in the country.
Other transformation initiatives for the year included the expansion of the agency banking platform, with 668 Absa outlets commissioned. The lender also partnered with Visa to launch a domestic and cross-border remittance service.
In the period under focus, the bank’s total capital adequacy ratio closed the year at 18.5 percent and liquidity reserve position at 33.6 percent against the regulatory limits of 14.5 percent and 20 percent, respectively.