Absa Bank Kenya has released its financial results for the period ending 30th September, 2021. The bank reported a strong growth in net profit to Ksh. 8.2 billion.
The profit was attributed to growth in interest income, notably in the small and medium enterprise segment, as the bank assisted SMEs to recover amid the economic effects of the COVID-19 pandemic.
The bank’s total income increased by 7% to Ksh. 27.3 billion, due to higher interest income, which increased by 9% year on year due to increased lending. This was however partially offset by margin compression as a result of drops in Central Bank Rate (CBR) whose benefits the bank passed to customers as a responsible lender. Similarly, non-funded income grew by 5% as a result of our new innovations and digitization, while costs fell by 3% year over year.
Net customer loans increased by 9% to Ksh. 229 billion, owing to growth in key core products such as general lending, trade loans, mortgages, and scheme loans. Customer deposits also increased by 9% to Ksh. 269 billion, with transactional accounts accounting for 69% of the total deposit book.
Speaking at the financials update, Absa Bank Kenya MD and CEO Mr. Jeremy Awori said, “The pandemic and its negative effects continue to persist, but we have drawn inspiration from our customers to rise above the storm and continue working together to keep the wheels of our economy turning. We are optimistic that we shall make good our commitment to continue innovating and enhancing our customers’ banking experience.”
As part of its ongoing commitment to innovation, Absa has added a new feature to its internet and mobile banking platforms that allows customers to view and manage their frequently used debit card functionalities online. These include temporary card freezing and unfreezing, card replacement, PIN setting and resetting, and card withdrawal limit management.
The bank’s costs totaled to Ksh. 12 billion, a 3% decrease compared to a similar period in 2020. The decrease was attributed to improved spend discipline and cost initiatives which built on previous periods of underlying cost savings. Automation of the processing center and continuing movement of consumer transactions to alternative channels were also among the cost cutting strategies.
Absa has expressed confidence to resume payment of dividends at the end of the full financial year of 2021.