Absa Kenya’s first-quarter profit up 51 percent to Sh4.5 billion
Absa Bank Kenya’s net earnings for the three months’ period ended March have increased by 51 percent to Kes4.5 billion on higher income.
In the quarter, loans and advances to customers went up by 28 percent to Kes310 billion with the bulk of the credit going to the small and medium enterprises (SMEs) segment. Absa has been positioning itself as a partner for powering SMEs growth in the country.
Absa has introduced China Desk to support a growing community of Chinese investors and business people operating across the region.
However, the bank’s provision for bad loans increased by Kes1.2 billion or 103 percent to Kes2.4 billion indicating the tough operating environment borrowers are facing in the economy.
Investments in government securities edged up by Kes203 million to Kes2.4 billion from Kes2.2 billion during the comparable quarter last year.
Customer deposits increased by 15 percent to Kes311 billion, supporting balance sheet expansion that saw the bank’s total assets rise by 17 percent to Kes515 billion.
Absa Bank Kenya CEO Abdi Mohamed, said: “We are pleased with this impressive financial performance which was delivered against a challenging business environment. It is a demonstration of the resilience of our business and serves as a good indication that our new strategy focused on building a bigger, better, and more inclusive financial institution that consistently meets the needs of its customers and creates shared value for all of its stakeholders is working.”
Read also: Abdi to SMEs: Absa is your partner in growth
Absa revenue increased by 40 percent to Kes13.9 billion, with net interest income increasing by 36 percent to Kes9.4 billion.
Further, the bank’s diversification and multi-year transformative investments are yielding the desired results, with non-funded income growing by 49 percent to Kes4.5 billion.
Additionally, new businesses have continued to diversify the pan-African lender’s revenue, with Absa Asset Management recording a 207 rise in revenue increase, Stock brokerage revenue increasing by 64 percent, and Bancassurance revenue increasing by 42 percent year on year.
Overall, the bank’s total capital adequacy ratio closed the quarter at 18.1 percent and liquidity reserve position at 28.6 percent against the regulatory limits of 14.5 percent and 20 percent, respectively.
CEO Mohamed added: “Our capital position remains strong, allowing us to support our customers while responding appropriately to the external environment.”
