Absa Bank Kenya reported KES9.1 billion in non-funded income in the first half of the 2025 financial year as the lender’s move to diversify its business continue to bear fruit. 

Data from the lender’s latest earnings report indicates that earnings from new business lines including bancassurance, asset management, brokerage and custodial business now account for almost a third of the firm’s revenues. 

We continue to grow market share in the corporate banking side and we now have over KES40 billion of assets in our new custody business which we launched in the first quarter of 2025,” explained Abdi Mohamed, Absa Bank Kenya CEO. 

“We expect that this number will continue to grow going forward as it’s a business for which Absa has core capabilities; we’ve done it before and we do it in other parts of the group.” 

The lender’s strategy of personalising foreign exchange solutions for both corporate and retail customers has yielded growth in foreign exchange trading volumes by 13 times, with the bulk of the growth coming from SME and personal customers. 

“We have focussed on ensuring that we are improving overall and total turnover especially by providing FX solutions to not just the corporate clients, which has been our area of focus, but also looking at SMEs and personal customers,” explained Mohamed. 

Absa Bank Kenya also reported a 36 percent revenue growth year-on-year in its bancassurance division, currently the leading in the industry in profitability, as well as a doubling in revenue in its asset management and custody business. 

This comes even as commercial banks in the country reported an overall reduction in lending over the past year as a difficult operating climate saw depressed demand for credit across the various economic sectors.

According to data from the CBK, overall gross loans by the industry fell by KES113 billion in the year ended December 2024 compared to the previous year, with gross non-performing loans ratio increasing from 15.6 percent in 2023 to 17.1 percent last year.

Absa Bank Kenya is optimistic that its diversification strategy will serve to cushion the lender in the face of domestic and global shocks affecting other parts of its traditional business.

“We have seen a lot of preference not just on the corporate side but also on the consumer side for short term lending products such as overdrafts, trade facilities specifically for consumer payroll loans and our Timiza product doing well in this environment,” explained Yusuf Omari. 

“With the stability in the foreign exchange that has stayed at 129 for a year now, we are starting to see customers, especially on the wholesale side, having a preference for foreign currency facilities and nearly 30 percent of our book is in foreign currency,” he explained. 

Strategic partnerships have also helped boost the lender in bringing new products into the market and bolster its non-funded income. 

This includes a partnership with the Nairobi Securities Exchange (NSE) on the dual listing of the World ETF that has given investors access to trade in more than 1000 company shares in different parts of the world. 

“Through partnerships with remittance organizations in the US, Europe and other parts of the world, we are seeing a significant increase in the number of inward payments that we process and the share of that market for Absa Bank Kenya has grown to 6 percent in the first year of implementation,” explained Mr. Abdi.