Absa Bank Kenya has reported a Ksh. 7.5 Billion profit after tax for the period ended 31 December 2019.
The bank’s profit was affected by costs that were associated with the change from Barclays Kenya which included rebranding, separations costs paid to Barclays PLC and systems. These costs which came to Kshs. 1.5 Billion were reflected as exceptional items. As such, excluding these costs the bank’s normalized profit came to Ksh. 8.5 Billion which was a 15% growth from a similar period the previous year.
The rise in profitability was attributed to a 7% growth in total income to Ksh. 33 Billion. This growth driven mainly by the growth of non- interest income, which was up by 9% year on year. The main areas of growth were risk fees, fixed income trading and risk managed products (RMPs). Interest income grew by 5% from the previous year largely because of growth in the lending book.
Total assets grew by 15% year on year driven by growth in customer loans, government securities as well as other liquid assets. Net customer loans was up 10% to close at Kshs. 195 billion driven by key focus products namely; general lending, asset finance, mortgage and scheme loans that recorded strong growth year on year. Customer deposits grew by 15% to Kshs.238 billion with transactional accounts making up 70% of the total deposits.
The Bank was able to manage its costs well given that they rose by only 1% to Kshs. 17.3 billion reflecting a 1%, this was attributed to discipline and cost saves initiatives. The cost saves initiatives included automation of the processing centres, investment in alternative channels and branch rationalisation programmes. The savings derived were used to fund sustainable investments especially in automation and digitization.
Shareholders will be paid a dividend of 90 cents per ordinary share. This is an addition to an interim dividend of 20 cents paid out on 11th October 2019.